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Alyeska, Federal Regulators Probing Employee's "Cover-Up" Claims Related to May Oil Spill

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Reprinted from Truthout


Tank 190 is surrounded by a containment area that
has an impermeable liner.
(Photo: Alyeska Pipeline Service Company)

An Alyeska Pipeline Service Company engineer sent a letter to federal regulators and BP's Office of the Ombudsman claiming internal company documents were altered following a 4,500-barrel oil spill May 25 to cover up the fact that Alyeska allegedly failed to perform maintenance on a key piece of equipment.

Additionally, the concern letter, obtained exclusively by Truthout, also contained numerous other allegations about the overall safety and integrity of the 800-mile Trans-Alaska Pipeline System (TAPS) and the way in which Alyeska has been operating it.

For example, the employee's letter said the pipeline has been shut down numerous times over the past four years because equipment is neglected and routinely breaks and repairs are not being addressed in a timely manner due to a personnel shortage. And electrical technicians have not been properly trained to work on electrical equipment, but are expected to do so regardless.

Alyeska is majority owned by BP. TAPS moves anywhere from 600,000 to 700,000 barrels of oil per day and accounts for 15 percent of the country's oil supply.

Alyeska spokeswoman Michelle Egan said the company is investigating the anonymous employee's claims as well as others the employee raised about the overall integrity of TAPS.

The letter of concern was filed about a month after an attorney hired by Alyeska wrapped up an investigation into a separate set of employee concerns that alleged Alyeska, under pressure by BP, implemented deep budget cuts which resulted in a "large 'bow wave' of deferred projects and program work" and threatened the safety of TAPS. The investigation, conducted by Alyeska confidante Charles Thebaud of the Washington, DC-based law firm Morgan, Lewis & Bockius, substantiated the employee's concerns about budget cuts, the deferral of maintenance and low morale, but he concluded those issues did not have an immediate impact on the safety or integrity of the pipeline.

The employee's letter was also sent to Melvin Jessee, Alyeska's Employee Concerns Program coordinator, before the company's Senior Vice President, Greg Jones, testified before the House Transportation and Infrastructure Committee's Subcommittee on Railroads, Pipelines and Hazardous Materials about the circumstances behind the May oil spill and safety and integrity concerns related to the operation of TAPS in general. Neither Jones nor any other Alyeska officials disclosed to committee members the allegations in the employee's letter or that the company was investigating the charges, several committee staffers told Truthout.

Lawmakers have stepped up their scrutiny of oil companies and their corporate practices ever since the explosion aboard the BP-operated Deepwater Horizon drilling rig in April, which killed 11 workers and ruptured a deep sea well that spewed hundreds of millions of gallons of oil across the Gulf of Mexico.

Last month, Sen. Lisa Murkowski (R-Alaska), a member of the Senate Energy and Natural Resources Committee, called on Alyeska to conduct an internal review of the pipeline to ensure its operating safely.

Alyeska said the company would hire a third party to conduct an independent review of TAPS, but the company would still maintain control of the review. Alaska State Rep. David Guttenberg (D-Fairbanks), who has been critical of the company's cost-cutting measures, said Alyeska could not be trusted to investigate itself.

The fact that Alyeska is run by a consortium of oil companies led by BP and, like the British oil company, has a reputation for placing profits ahead of safety and integrity has made Alyeska a target of criticism.

During a closed-door meeting in mid-June with staffers who work for Rep. Bart Stupak (D-Michigan), the chairman of the House Energy Committee's Subcommittee on Oversight and Investigations, Alyeska Chief Executive Officer and President Kevin Hostler was grilled about his management style, of which Thebaud's report was harshly critical, and the oil spill at pump station 9, located about 100 miles southwest of Fairbanks, Alaska, and the site of four other serious accidents, including a fire in January 2007.

Hostler announced his retirement from Alyeska one day after Truthout published an expose on the company.

The May 25 spill resulted when oil started to flow back into a storage tank after a backup battery system failed during a planned shutdown of the facility to test the fire-and-gas and valve leak systems. During one of the tests, which required disconnecting the pump station from the electrical grid, a battery powered uninterrupted power supply system (UPS) that is supposed to provide backup power failed and caused critical station control systems to shut down as well.

Because the power was out and the facility was not manned with trained operators, no one recognized that the relief valves, which open during a power outage, discharged oil into the on-site relief tank. The oil pouring into the tank, eventually overflowed and spilled and forced Alyeska to shut TAPS down for more than three days, which led to a spike in oil prices.

The employee who wrote the letter told Truthout there have been 15 separate documented incidents involving UPS failures at pump stations 1, 3 and 4 since 2006 that no one at Alyeska ever looked into. At pump station 9, UPS failures were a common occurrence and were the catalyst behind pipeline shutdowns, but Alyeska failed to take action to correct the issue even though the company was informed about it, the employee said.

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Jason Leopold is Deputy Managing Editor of Truthout.org and the founding editor of the online investigative news magazine The Public Record, http://www.pubrecord.org. He is the author of the National Bestseller, "News Junkie," a memoir. Visit (more...)
 
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