ANCHORAGE, Alaska - The Trans-Alaska Pipeline System has functioned well enough since it began shipping oil in 1977 that its owners deserve to operate the 800-mile energy artery for another 30 years, federal and state regulators say.
Despite growing concerns among environmentalists over the line's safety, and criticism of spending cutbacks on maintenance, a draft environmental report by the U.S. Bureau of Land Management earlier this month recommended extending the current operators' lease. That conclusion was echoed in a report issued by the State of Alaska, which said there is enough North Slope oil yet to be pumped to support pipeline operations for the next three decades.
The studies are part of the process for renewing the lease and right-of-way agreements that allow the pipeline to operate over federal and state land stretching from Prudhoe Bay in Alaska's Arctic to the port of Valdez on the Gulf of Alaska coast.
Due to expire in 2004 are the leases are held by the pipeline's owners - BP , Phillips Petroleum , Exxon Mobil , Williams , Unocal and Amerada Hess . The system is operated by Alyeska Pipeline Service Co., a consortium owned by the six oil companies.
So far, the pipeline has shipped over 13.5 billion barrels of oil, and it is the crucial link between North Slope oil fields and their markets.
The Bush administration and the state of Alaska have called for speedy renewal of the leases, which the BLM estimates will allow the pipeline to ship another 8.9 billion barrels of oil worth $374 billion over the next 30 years.
But critics say any renewal should include new stipulations to improve safety along the aging line. They fear that Alyeska is cutting costs just as the maintenance needs along the pipeline are growing.
"It's not getting any shorter. It's not getting any younger," said Walt Parker, a former state regulator and longtime member of watchdog groups that investigate Alaska oil operations.
THREE MAJOR PROBLEMS
Parker identified three major problems that he said result from aging - corrosion, safety-valve malfunctions and shifts in the vertical supports that suspend the pipeline over Alaskan tundra.
Problems with the vertical supports, he said, have emerged with climate warming. Melting permafrost appears to be tipping the supports, so future pipeline operations should be adjusted "to the climate as it is now, not as it was 40 years ago," he said.
The right-of-way renewal should be used to do a thorough examination of pipeline safety and an opportunity to make sweeping reforms, he said.
"The thing's got to be treated like a 30-year extension and not just a minor matter of paper shuffling," he said.
One change that environmentalists want is the establishment of a citizens' oversight group, similar to citizens' councils that oversee oil transportation in Prince William Sound and Cook Inlet.
That would create "a cadre of informed citizens" to offset the cost-cutting pressures that owner-companies place on Alyeska, said Richard Fineberg, a Fairbanks economist and frequent critic of pipeline practices.
"That sort of decision-making should not be left to an owners' committee without some oversight by citizens," Fineberg said.
Federal and state regulators' draft recommendations did not include addition of a citizens' committee.
There is no legal requirement for such citizen oversight of the pipeline, said Rhea DoBosh, a spokeswoman for the Joint Pipeline Office, the consortium of federal and state agencies that regulate the oil line and its Valdez terminal.
When it comes to regulating the pipeline, the Joint Pipeline Office is considered the public's advocate, DoBosh said. Periodic reviews by such authorities as the General Accounting Office have declared the Joint Pipeline Office to be effective, she said.
LOWER FLOW
For Alyeska, one of the challenges is to operate in a time of lowered oil flow. North Slope production is now down to about half the peak level of 2 million barrels a day achieved in 1988.
Alyeska President David Wight has said he hopes to trim $100 million in operating costs within the next three to five years.
The savings will come from management efficiencies, such as an ongoing reorganization, and not from maintenance or safety programs, said Alyeska spokesman Mike Heatwole. "Maintenance is a day-to-day function for this pipeline," Heatwole said.
Wight, in a speech to an Anchorage business group, said Alyeska hopes the lease renewals will be completed by the end of this year, a full year ahead of the deadline.
Environmentalists have asked for an extended public-comment period and for an upcoming series of public hearings to include West Coast sites that are outside Alaska but still affected by Trans-Alaska Pipeline operations.
The environmental study "is a chance to look at the big picture and look at the cumulative impacts of oil transportation and development," said Bob Randall of Trustees for Alaska, an Anchorage-based environmental law firm.
To government regulators, the prospect of not renewing the pipeline's leases would create cascading problems.
It would mean the dismantling of the line, a 40 percent drop in Alaska's gross state product, evaporation of jobs, state revenues and state services and the loss of nearly a fifth of domestic U.S. oil production.
Environmentalists say they do not relish the idea of a pipeline shutdown, either. "I think we'll continue to produce oil for a long time, hopefully shipping it through a good, well-maintained pipeline," Parker said.:
