Alaska spill site was fire scene 3 years ago

By DAN JOLING Associated Press Writer

ANCHORAGE, Alaska (AP) - A storage tank that spilled crude oil from the trans-Alaska pipeline Tuesday, shutting down the line, was the site of a fire three years ago for which Alyeska Pipeline Service Co. faces fines of $506,000.

Alyeska continues to contest the proposed fines for safety violations connected to the fire at Pump Station 9 near Fort Greely, about 100 miles south of Fairbanks.

Up to several thousand barrels of crude spilled from the pipeline Tuesday into a 2.3 million-gallon storage tank, which overflowed into a containment area. The containment area, a yard lined with an impermeable barrier and surrounded by a berm, apparently captured all the oil.

Alyeska has proceeded cautiously with cleanup. However, spokeswoman Michelle Egan said late Wednesday night that crews were ready to begin recovery of the spilled oil.

The plan was to open a drain in the containment area and start suctioning the oil into tanker trucks overnight, Egan said.

"We don't know how long it will take," she said. Crews also planned to draw down the oil in the storage tank sufficiently that its vents are clear.

Alyeska also hoped to restore full power to the pump station by early Thursday, she said.

"Once we clear these hurdles, then we're very close to being able to pump oil," Egan said, adding it might be possible to restart the pipeline by midday Friday "or possibly do better."

Secondary power was restored earlier Wednesday at the pump station.

Oil companies operating on Alaska's North Slope were ordered Wednesday afternoon to further reduce production, from 16 percent of their regular output to 8 percent. Alyeska has storage capacity for that production until Friday noon, Egan said.

The 800-mile trans-Alaska pipeline carries crude oil from Prudhoe Bay to Valdez, where tankers pick it up and deliver it to refineries.

The Jan. 6, 2007, fire occurred while an electrician was performing maintenance work on a valve at the pump station in temperatures around minus 25 degrees Fahrenheit. A portable heater about the size of a small pickup was placed 15 feet from the 55,000-barrel tank.

Rod Hanson - Alyeska's health, safety, environment and quality director - told The Associated Press in 2008 that as the electrician checked wiring, a false signal generated 200 miles to the south during the testing of a new pipeline control system triggered an automated shutdown and diverted crude oil into the storage tank without warning.

The fire started nearly 90 seconds later, as oil displaced fumes in the storage tank.

The electrician did not hear a radio call to evacuate the tank farm and continued working. Seconds after the call, he felt the heat, ran to his truck and drove off.

The fire was extinguished in about seven minutes.

The federal Pipeline and Hazardous Materials Safety Administration concluded the fire was a high-risk event that warranted a steep fine.

Among the probable violations: Alyeska failed to follow its written procedures by allowing a portable industrial heater and a running vehicle near a tank and in an area with the potential for flammable vapors. The agency also said Alyeska failed to provide effective communication between the electrician and the control room operator and that the worker was serving as his own fire watchman.

Alyeska contested the findings.

Tuesday's spill occurred when backup power failed during a planned shutdown and a vent in the main pipeline opened to prevent pressure from building too high.

As in 2007, oil flowed to the partially filled tank, this time filling it and spilling over into the containment area.

Tom DeRuyter, on-scene spill coordinator for the Alaska Department of Environmental Conservation, said Wednesday the tank was damaged and deformities could be seen near its top.

Pipeline watchdogs say the spill shows the lack of oversight of the industry that provides upward of 90 percent of Alaska government income.

Pam Miller, Arctic program director for the Northern Alaska Environmental Center, said she has a lot of questions about the integrity of the aging pipeline. And she said state and federal oversight has not tightened as the pipeline has gotten older.

Richard Fineberg, an independent economic and environmental consultant, said prevention is key.

"Little things either can add up chronologically to be a big thing, (or) little things are a tip-off that something may be wrong," he said.

Analysts expected the temporary shutdown to have a minimal effect on oil prices and gasoline supplies.

The shutdown may have been a "supportive factor" in the 4 percent rise in crude oil prices Wednesday, but "I don't think it was an overwhelming factor," said Phil Flynn, PFGBest senior market analyst. "The market is pretty well supplied right now, and we probably could miss it for a short time."

Last month, the 48-inch diameter pipeline moved an average of 645,113 barrels per day - about 12 percent of the estimated 5.5 million barrels a day that are produced domestically.

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Associated Press Writer Becky Bohrer in Juneau, Alaska, contributed to this report.