Oil companies ran Alaska pipeline unsupervised for 12 years, GAO charges

August 05, 1991|By Casey Bukro | Casey Bukro,Chicago Tribune

Government agencies allowed the company that operates the 800-mile Alaska oil pipeline and tanker terminal to operate largely unregulated for years although the system produces 25 percent of the nation's domestic oil supply, according to a federal report being released today.

After an 18-month investigation of the Alyeska Pipeline Service Co. of Anchorage, the General Accounting Office concluded that the five principal federal and state regulatory agencies "have not had the systematic, disciplined and coordinated approach needed to regulate" the oil pipeline system.

"Instead, these agencies relied on Alyeska to police itself" from shortly before the pipeline was finished in 1977 until 1989, the GAO said.

Government agencies relied onAlyeska, a consortium of seven oil companies, to identify and correct problems until the 1989 Exxon Valdez oil spill and the discovery that year of serious rust problems in the pipeline, which was designed to resist corrosion for 30 years.

Alyeska is spending $600 million to correct corrosion problems on the pipeline system, built at a cost of $8 billion.

The report by the GAO, the investigative arm of Congress, was compiled at the request of Representative George Miller, D-Calif., chairman ofthe House Interior and Insular Affairs Committee.

"Congress authorized the pipeline in 1973 only after assurances from the oil industry and the Nixon administration that it would meet the toughest standards for the protection of the public and the environment," Mr. Miller said. "Now we have learned that the government turned its responsibility over to the industry, and the industry betrayed its promises to the public."

Continuing safety and environmental problems with the pipelinethreaten the nation's domestic oil supply, Mr. Miller said.

But George Wuerch, Alyeska's vice president of corporate affairs, said the lack of independent governmental oversight outlined by the GAO report was largely corrected with the creation of a federal-state pipeline office in Anchorage in January 1990.

"There is very close oversight of the federal and state agencies here in Alaska," Mr. Wuerch insisted, adding that he favors GAO recommendations for central leadership and

more federal funding for governmental inspection of the pipeline and the tanker terminal.

Alyeska supplies about $2 million a year for the federal-state inspection program and another $2 million for citizen reviews.

The GAO said five federal and state regulatory agencies are responsible for monitoring and assessing trans-Alaska pipeline operations and maintenance procedures.

They are the Department of Interior's Bureau of Land Management, the Department of Transportation'sOffice of Pipeline Safety, the U.S. Environmental Protection Agency and Alaska's Natural Resources and Environmental Conservation departments.

The pipeline covers 800 miles from Prudhoe Bay to the tanker terminal in Valdez.

The GAO noted continuing air pollution problems with the pipeline system and said Alyeska's ability to respond to a major oil spill "remains unknown" despite improvements in staff levels, equipment and planning in response to the 1989 spill.

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