Monday, March 20, 2017


With one Cook Inlet pipeline leaking, feds want Hilcorp to inspect another

Author: Alex DeMarban
Updated: 21 hours ago

Federal pipeline regulators on Friday put Hilcorp Alaska on notice that a crude oil pipeline of the same vintage and size as the company's leaking gas line in Cook Inlet could be threatened by the same forces that ruptured the gas line and cause a far more dangerous leak.

The Pipeline and Hazardous Materials Safety Administration had already issued a proposed order that Hilcorp fix the gas leak by May 1 or shut down the leaking gas pipeline.

On Friday, the agency sent a second proposed order to Hilcorp. Now, it also wants the company to conduct internal and external inspections of the "substantially similar" underwater pipeline that carries crude oil to shore from two offshore production platforms located in Cook Inlet northwest of Nikiski.

That crude oil pipeline is operating as it should, the company said Friday.

The crude oil line runs beside the leaking gas line, according to the agency's proposed safety order, sent Friday and signed by Chris Hoidal, PHMSA's western region director.

Both of the 8-inch steel pipelines were installed in the mid-1960s as the Cook Inlet oil boom was building.

PHMSA said the gas line leaked twice in 2014 in summer, but repairs were made before Hilcorp acquired the facilities from the previous operator. The leaks were caused by abrasion from rocks in areas where the pipeline is not supported by the seabed, the agency said.

"Although the cause of the ongoing leak on the (gas pipeline) is unknown, past leaks on the pipeline have occurred due to outside forces," such as pipe vibration or rock damage, the notice said.

It's reasonable to conclude that "similar conditions" are also present for the crude-oil line, the notice said.

Hilcorp detected the gas leak Feb. 7 when a helicopter flying above the pipeline route spotted roiling waters. Hilcorp has indicated the leak began in December, according to PHMSA.

Hilcorp has said pan ice and strong tides in Cook Inlet present dangers for repair divers. The company doesn't expect to begin finding and fixing the leak — about 80 feet underwater — until the ice clears. That is not expected to happen until at least late March, the agency said.

The notice said environmental harm from an oil leak could be "significantly greater" than from the gas leak, while Hilcorp's ability to respond could be severely hampered in winter. Estimates show only 340 endangered Cook Inlet beluga whales remain, so deaths of individual whales could have "population-level effects," the notice said.

Data collected from satellite-tagged belugas in 2002 and 2003 show they spent a lot of time near the pipelines in March, the agency said. While hazards to birds and ducks are currently low, those risks will increase once more birds arrive in seasonal migrations starting late this month. Migrations of hooligan and salmon smelt will also begin about mid-April, presenting more concerns, the agency said.

PHMSA said the annual side-scan sonar or multibeam echo-sounder surveys currently performed by Hilcorp don't provide enough information to notice corrosion, dents, gouges and other problems with the pipes. The agency noted that Hilcorp conducts diver inspections.

As it did in its March 3 notice, PHMSA calls for more thorough external inspections of the pipe, as well as internal inspections by Sept. 30, which currently aren't conducted.

Internal inspections would involve an upgrade to the pipeline to allow reviews by a "smart pig," a device that moves through the line to detect dents, wall thinning and other problems, said Lois Epstein, an Alaska-licensed engineer and Arctic program director for The Wilderness Society.

"Given that the breached gas pipeline has had three failures since 2014, it's clear that Hilcorp has not adequately addressed known risks to pipelines in Cook Inlet," she said.

PHMSA's order is not final, and can be challenged by Hilcorp.

After a final order is issued, Hilcorp will have 21 days to externally inspect the pipeline or shut it down and purge it, the agency said. It might also need to be shut down if it's deemed unsafe.

Hilcorp said it will work with PHMSA and other agencies "to ensure a thorough and timely response" to the proposed order's concerns.

Hilcorp acquired the pipeline in September 2015 and completed a successful pressure test on the line, said a statement provided by Lori Nelson, external affairs manager at Hilcorp Alaska.

"Hilcorp continues to focus on addressing the natural gas pipeline leak and en

suring the safety of our responders in the field," the statement said.


Cook Inlet gas line leak is a hazard and must be repaired, feds say

Author: Alex DeMarban
Updated: March 7

Hilcorp Alaska Platform A was built in the mid-1960’s and was owned by Shell at that time. The leaking pipeline delivers natural gas used as fuel for this platform and three others. (2010 archive photo Curtis Smith / Shell)

A federal regulatory agency has concluded that a leaking natural gas line in Cook Inlet poses a risk to public safety and the environment, and says it should be shut down if not repaired by May.

In its 11-page notice of a proposed order, the U.S. Pipeline and Hazardous Materials Safety Administration also provides new information about the leak, including that pipeline owner Hilcorp Alaska learned it began in December. The company didn't publicly disclose the leak until Feb. 7, when it said a helicopter overflight detected gas bubbles.

A Homer environmental leader, in his own overflight, said it looked more like a "cauldron" and took a video to prove it. The video showed a massive, roiling leak.

The federal agency said the company's current inspections of the 8-inch steel pipeline aren't adequate to detect damage, such as from corrosion or gouges by rocks.

Hilcorp Alaska didn't respond to requests for comment.

The pipeline, built in 1965, delivers gas for fuel from shore for four aging offshore platforms in Cook Inlet. Two of those platforms produce small amounts of oil and two are unmanned with no active production, yet still require electricity for such things as lights for navigational aids.

Hilcorp Alaska has 30 days to challenge the proposed safety order, comply with it or work with PHMSA to address the problem, according to the notice issued Friday by Chris Hoidal, director of PHMSA's western region in Lakewood, Colorado.

The Alaska Department of Environmental Conservation has also said it wants a plan from Hilcorp. The DEC said Hilcorp needs to explain by Monday, March 13, how the company would shut down the oil wells on the platforms and evacuate gas from the line to control the release, should such a step be required.

By Wednesday, the state agency said, Hilcorp should present a monitoring and sampling plan to assess risks to fish, wildlife and the environment, including endangered Cook Inlet beluga whales. The agency could call for the pipeline and platforms to be shut down if an analysis showed the benefits of doing so outweighed the risks, said Geoff Merrell, Central Alaska region manager for DEC.

PHMSA has jurisdiction over the pipe and its operation, and could make its own decision to shut down the pipeline, he said. DEC has jurisdiction over the leaking gas, which the state agency considers a hazardous substance.

The PHMSA letter also indicates repairs may not come as early as originally hoped. Hilcorp has said repairs by divers cannot begin until at least mid-March, in part because of a combination of large ice pans and extreme tides that would put personnel and boats in danger.

Hoidal, however, says Hilcorp has indicated late March will be the earliest start date. The sea ice is expected to clear sometime between then and the end of April, allowing divers to safely access and fix the leak.

"The serviceability of the pipeline will remain impaired until at least this time," Hoidal wrote.

Hilcorp appears to be "shooting straight" about its assertion that the Inlet is too dangerous now for divers, said Dan Magone, who has overseen commercial repair dives out of Dutch Harbor for decades.

Magone said on Monday that he had not heard of the leak in Cook Inlet, having just returned from three weeks spent removing a beached vessel in Akutan in the Aleutian Islands.

But Magone, general manager at Resolve Magone Marine, said diving anyway is dangerous; add large pans of ice moving with the Inlet's strong tides and the danger increases substantially.

"If ice was the only hazard, you might figure out a plan, but it's not," said Magone, who has led commercial diving projects in Cook Inlet in the summer but not in winter. "It is a challenging place to work."

According to PHMSA's notice, Hilcorp had observed an increase in gas line flow in late January, leading it to launch helicopter "surveillances." The aerial searches led to the discovery of the leak after a helicopter spotted roiling waters on Feb. 7 above a section of the pipe.

Later, Hilcorp's analysis of gas flow showed that the line began leaking in "late December," Hoidal said.

Hoidal said that Hilcorp's inspections of the pipeline's condition are inadequate.

"The annual side-scan sonar or multi-beam echo-sounder survey, or both, that Hilcorp currently performs, do not provide sufficient information to determine whether there are external loads on the pipe, eroded pipe, rock impingements, metal loss, dents, gouges, dielectric coating deterioration, and/or missing 1-inch thick concrete weight coating," he wrote.

The leaking portion of the gas line carried oil until it was converted to carry gas in 2005. The leak is located about 3 ½ miles from shore, northwest of Kenai.

Initial reports put the leak at 225,000 to 325,000 cubic feet of gas per day, enough to fuel about 390 homes a day in Southcentral Alaska in December, a cold month when gas use was high.

Later, Hilcorp Alaska on Feb. 15 pegged the leak at 210,000 to 310,000 cubic feet a day, after steps were taken to reduce gas flowing through the line by reducing activity on the platforms. PHMSA's letter is based on that lower amount.

Hoidal says the federal agency accepts Hilcorp's assertions that "immediate repair" of the leak poses an "extreme risk" to divers and other repair personnel. He says that option is "not viable."

The agency also agrees with Hilcorp that the risk of shutting down the gas line includes a crude oil leak. Seawater might enter the pipeline and flush out residual oil. Also, without fuel gas to help power oil production on two of the platforms, a separate pipeline carrying crude oil might freeze, causing a rupture in that line.

But Hoidal also lists potential dangers, including a leak that could worsen and increase the threats to wildlife such as beluga whales. The federal notice to Hilcorp says that continued operation without "corrective measures" presents a risk to "public safety, property and the environment."

The agency made that decision after accounting for such factors as the pipeline's age, the hazardous material that's leaking, the Inlet's wildlife and the geographical characteristics around the pipeline.

The agency notes the same line leaked twice in 2014, in June and August. The leaks were 40 yards apart, about two-thirds of a mile from the current leak, Hoidal said.

The previous gas line owner, XTO Energy, found that the leaks were caused by rock abrasion in areas where the pipeline is not continuously supported by the seabed. XTO Energy sold the pipeline and other facilities to Hilcorp Alaska in 2015.

Pipelines in the Inlet are threatened by vibrations from turbulent water when they aren't supported by the seabed, allowing them to potentially strike rocks.

In calling for permanent repairs to the pipeline by May 1, PHMSA wants a plan from Hilcorp on how it would shut down the pipeline, including purging gas from the line but maintaining enough pressure with a "non-hazardous" substance to prevent saltwater from entering.

The agency also calls for long-term steps to improve inspections and make other repairs to the aging line, if needed, after the sea ice has melted.

That includes using "high-resolution" sonar or related technology to inspect the line to find sections that aren't supported by the seabed and may be subject to vibration or "excessive bending."

Unsupported sections at least 10 feet long must be visually inspected to look for corrosion and damage, the letter said.

Lois Epstein, a licensed engineer who served for several years on a federal advisory committee addressing pipeline issues, said it's clear from the proposed order that Hilcorp could have done more to prevent the leak.

That attitude won't help the company's effort to get federal permitting approval for a much more remote oil project known as Liberty that it has proposed in the Beaufort Sea, she said.

"People are going to remember this," said Epstein, Arctic program director for The Wilderness Society.