Terminal Operations

Contingency plan for terminal under review

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The oil spill contingency plan for the Valdez Marine Terminal is undergoing its five year renewal. During a public comment period in December, the Council voiced concern over a “prevention credit” that reduces the amount of oil that the industry must be ready to clean up if a spill were to occur.

One of the Council’s primary duties is reviewing spill contingency plans for the oil industry in Prince William Sound. The Council has been reviewing these plans since 1990.

“Over 30 volunteers, staff, and contractors spent hours reviewing documents and coordinating these comments,” noted Linda Swiss, the Council’s project manager for contingency planning. The three volumes that make up the oil spill contingency plan for the Valdez Marine Terminal contain over 1,000 pages in total.

What’s in a contingency plan?

Oil spill contingency plans contain details about the steps to be taken before, during, and after an oil spill.

  • Before: what’s being done to prevent an oil spill
  • During: how the industry will respond to an oil spill, including where the equipment and personnel would come from
  • After: plans are updated to reflect lessons learned from previous spills

“These plans are a good way for stakeholders to understand how their resources and livelihoods are protected,” Swiss says.

Oil spill contingency plans are prepared by the operators of Alyeska’s marine terminal and oil tankers and are subject to state approval.
There are separate plans for spills from the Valdez Marine Terminal and from the tankers that load crude oil at the terminal. Plans undergo an update, review, and approval process approximately every five years.

Liners under crude oil storage tanks still of concern

This image shows the giant crude oil storage tanks at the Valdez Marine Terminal. The walls of the massive asphalt-lined cells can be seen surrounding the tanks in this photo.
The crude oil storage tanks at the Valdez Marine Terminal are surrounded by massive asphalt-lined cells that are designed to contain oil in case of a spill from a tank. The cell walls can be seen in this photo. Photo by Linda Robinson.

One of the central issues the Council is concerned about is an asphalt liner surrounding the large oil storage tanks.

Each tank holds approximately 23 million gallons of oil. If a tank were to leak oil, the liners act as a backup system that is supposed to contain the oil until it can be cleaned up and before it can contaminate ground water or Port Valdez. The backup or “secondary containment” system consists of a huge bowl-shaped area around the tank. The area is lined with asphalt, which is buried under several feet of gravel.

Why does the Council care about this liner?

The Exxon Valdez oil spill taught the lesson that a certain amount of equipment and trained personnel must be on hand to respond quickly.

The amount of response equipment and personnel varies according to the storage capacity. At the terminal, this is based on the maximum amount one of the oil storage tanks can hold, which is approximately 23 million gallons.

Alyeska receives a 60% “prevention credit” for various prevention measures. Most of that 60% is for having the asphalt liner around the tanks. This means they plan for a spill of 40% of the total volume of one tank, which is 8.5 million gallons. If more than 8.5 million gallons is spilled, they would still be responsible for cleaning it up, however, more equipment would be needed than is currently listed in the plan.

Is the liner still intact?

This liner was installed when the terminal was built and is approaching 50 years old. From time to time, sections of the gravel layer over the liner have been removed when work is done for other projects. When this is done, cracks and holes are often found in the liner.

“There are crude oil storage tanks holding half a million barrels of oil sitting on a steep slope above Port Valdez within a secondary containment system with known integrity issues,” the Council noted in their comments.

Testing the liner

Because the liner is buried under gravel, it is expensive and time-consuming to dig it up for a visual examination. Excavation could also damage the liner. In 2022, the Council conducted a study of methods to evaluate the liner without removing the gravel. Alyeska is planning to conduct a pilot test this summer using an approach similar to the method recommended in that report.

What is a prevention credit? Spilled oil can never be completely recovered, so regulations are designed to encourage companies to prevent spills from happening in the first place. One way to do this is to give “credit” for prioritizing spill prevention.
In Alaska, the amount of equipment and personnel that an oil company must keep on hand to respond to a spill depends on the potential size of a spill. If a company takes actions to prevent or reduce the risks of a spill, they can qualify for such a credit. This allows the company to keep less equipment and personnel on hand to respond, because a spill is less likely.

Additional issues

The Council noted several issues aside from the liner, including:

  • The length of time between internal inspections of the storage tanks.
  • A lack of detail about the training to prevent oil spills.
  • Documents containing plan information that were not made available as part of the public review.

More information

The Council’s comments: PWSRCAC comments on 2024 VMT Contingency Plan Renewal

Annual Report now available

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Front cover of the report. Image is of a rocky beach in Prince William Sound covered with mussels and other tidal critters. Mountains and ocean in the background. Clicking on the image will download a PDF of the report.The Council’s annual report, Year in Review 2022/2023, is now available. This report covers the many programs and projects we’ve been working on over the past year, such as oil spill prevention and response, environmental monitoring, oil spill contingency plans, operations at the Valdez Marine Terminal, invasive species monitoring, our outreach efforts, and much more. Highlights from this year include:

  • An assessment of risks and safety culture at the Valdez Marine Terminal
  • Ensuring the adequacy of secondary containment liners for the terminal’s crude oil storage tanks
  • Supporting solutions for sustainable funding for state spill
    prevention and response
  • Improvements to how the Council monitors weather and sea currents in our region
  • Monitoring oil spill drills and exercises
  • Reexamining the Council’s position on use of dispersants in our region

Download: 2022-2023 Annual Report

Report raises concerns about safety at the Valdez Marine Terminal

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In April 2023, the Council released an assessment of risks and safety culture at the Valdez Marine Terminal. This report was initiated in June 2022, in response to safety concerns brought to Council staff by current and former Alyeska employees.

The Council worked with Billie Pirner Garde, a national expert on safety culture for work environments in energy industries. Garde previously worked as a consultant for both Alyeska and BP on numerous issues such as open work environments, safety cultures, and employee concerns programs.

Garde interviewed the concerned individuals, allowing them to remain anonymous. They reported inadequate staffing, equipment, and safety and reporting systems. Pressure to reduce budgets was a common theme.

One person quoted in the report noted, “we are as safe as the budget allows.”

According to the interviews, the availability of resources, quality and audit functions, maintenance and system upgrades, and operational integrity and compliance have all suffered significantly under recent corporate management.

“Virtually every serious accident investigation confirms that the tension between cost on the one hand, and compliance and safety on the other hand, contributed to the event.”
– Billie Pirner Garde

Alyeska employees

Garde notes in the report that the interviewees all cared deeply about the safe operation of the terminal, and the safety of their colleagues, the community, and Prince William Sound. She credits the integrity, knowledge, and skill of the Alyeska workforce for holding together an aging infrastructure.

Regulatory oversight diminished

Government budget pressures have also contributed to the problems. Over the past several years, the Council has voiced concerns about cuts and reductions in staffing at oversight agencies, including the Bureau of Land Management and the Alaska Department of Environmental Conservation.

“The consequences of reduced oversight have, generally, never been favorable for the Alaska public and its environment,” Garde notes in the report.

Report recommendations

At a special meeting of the Council’s Board of Directors in April, the Council endorsed all recommendations in the report, including that Congress initiate a Government Accountability Office audit to determine the adequacy of the present regulatory oversight of terminal operations by federal and state agencies.

Other recommendations include:

  • The State of Alaska initiate an assessment, or audit, of the present regulatory oversight of terminal operations by state agencies;
  • The federal Occupational Safety and Health Administration conduct or commission a full independent audit of applicable terminal systems for compliance with Process Safety Management;
  • Alyeska and the Trans Alaska Pipeline System owners commission an independent full assessment of the company’s safety management systems and determine a specific timeline for actual completion of the necessary changes to ensure safe operations; that they commission an immediate independent audit to be conducted of all deferred maintenance at the terminal; and provide mandatory training for all supervisory and management personnel on their duty to promote a strong safety culture, uphold a compliance culture, and not tolerate harassment, intimidation, retaliation, or discrimination.

Response from Alyeska

The Council has been encouraged by Alyeska’s response.

John Kurz, the new president of Alyeska, joined the Council’s Board of Directors at the May meeting. He told the Board that he and Alyeska’s executive team are taking the report seriously. He noted that they have formed a team to look into issues identified to determine what is going well, what areas they may be falling short, and what actions they are going to take to address them.

“There is nothing more important than life and family,” Kurz said, when explaining his views on safety in the workplace. “Because I care about everyone that works for us, I also want everyone to experience everything life has to offer, and therefore we will be injury free.”

Schantz says she knows that the staff at Alyeska and the regulatory agencies are dedicated to operating as safely as possible with the resources they are given. “The Council agrees with the sentiment expressed by Alyeska executives that this report provides an opportunity for improvement,” she said. “We stand ready to support Alyeska, and state and federal regulatory agencies, in our role as an advisor.”

“The greatest successes result from citizens, industry, and regulators working together to maintain and improve safeguards to prevent and prepare for future oil spills,” Schantz added.
The full report, including more detail on the resulting recommendations, is available on the Council’s website: 

Council report assesses risks and safety culture at Alyeska’s Valdez Marine Terminal

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View full report (PDF 4.1MB): “Assessment of Risks and Safety Culture at Alyeska’s Valdez Marine Terminal”*

New report: “Assessment of Risks and Safety Culture at Alyeska’s Valdez Marine Terminal”

Prepared by Ms. Billie Pirner Garde, contractor to the Prince William Sound Regional Citizens’ Advisory Council.

This report was initiated in June 2022, in response to safety concerns at the Valdez Marine Terminal (VMT) brought to PWSRCAC by current and former Alyeska employees.

Key finding from the report

The purpose of the assessment documented in the report was to reach a determination, based on the information provided to PWSRCAC, on whether there is a current level of unacceptable safety risk to the VMT, its workforce, the community of Valdez, and the environment. After reviewing all information available through the assessment, it is Ms. Garde’s conclusion that there currently is an unacceptable safety risk to the VMT, and consequently no reasonable assurance that the VMT is operating safely and in compliance with its regulatory requirements.

Inadequate resources (e.g., staffing, equipment, adequate safety and reporting systems) and budget pressures are a common theme in all the issues addressed throughout the report. There is no substantive information in this report regarding safety or process safety issues that is not already available to Alyeska. The failure of the company to act on the information it has is one of the primary weaknesses identified by the assessment.

The Exxon Valdez oil spill in 1989, and Alyeska’s failure to perform effective response capability, changed the industry and Alaska forever. It should have permanently changed Alyeska’s respect for the dangers inherent in its operations as well. Unfortunately, the current situation reveals that due to changes in the organization, availability of resources, quality and audit functions, maintenance and system upgrades, and operational integrity and compliance have suffered significantly under recent corporate management. At the same time, regulatory oversight at the VMT has also diminished.

Report recommendations

Over the past several years, PWSRCAC has become increasingly concerned with budget cuts and reductions in staffing levels at agencies with key oversight responsibilities at the VMT, including the Bureau of Land Management (BLM) and the Alaska Department of Environmental Conservation. The consequences of reduced oversight have, generally, never been favorable for the Alaska public and its environment.

The PWSRCAC Board of Directors endorses all recommendations contained in Ms. Garde’s report. This includes PWSRCAC recommending that Congress initiate a Government Accountability Office (GAO) audit to determine the adequacy of the present regulatory oversight of Alyeska’s VMT operations by federal and state agencies with responsibility over the VMT, including compliance with the Federal Grant of Right-of-Way and Stipulations, and the State Lease.

In line with the recommendation for Congress, the Council is requesting that the State of Alaska initiate an assessment, or audit, of the present regulatory oversight of Alyeska’s VMT operations by state agencies with responsibilities over the VMT.

Per the report recommendations, PWSRCAC is also requesting that the federal Occupational Safety and Health Administration (OSHA) conduct or commission a full independent audit of applicable VMT systems for compliance with Process Safety Management.

The importance of the operational integrity of the VMT cannot be overstated because an incident or accident could interrupt the flow of oil from the Alaska North Slope, thus endangering U.S. energy supplies and energy security. With new oil development on the horizon, every effort must be made to ensure the integrity of systems and infrastructure within the Trans Alaska Pipeline System (TAPS).

The main recommendations include specific requests for Alyeska and the TAPS Owners to:

  • Commission an independent full assessment of the Alyeska safety management systems and determine a specific timeline for actual completion of the necessary changes to ensure safe operations;
  • Commission an immediate independent audit to be conducted of all deferred maintenance at the VMT; and
  • Provide mandatory training for all supervisory and management personnel on their responsibilities to manage in a manner that promotes a strong safety culture, upholds a compliance culture, and does not tolerate harassment, intimidation, retaliation, or discrimination.

These recommendations and requests include more details, which can be found in the Recommendations section of the report. The Council acknowledges that there are recommendations directed internally to PWSRCAC and we will be considering appropriate actions in an effort to address these.

Next steps

The issues and recommendations covered by this assessment and report will take some time to address, possibly years. The Board and staff will now be following up with Alyeska, the Delegation, Governor, Legislature, and regulatory agencies to collect any input and thoughts on the path forward. Discussions need to take place with all parties, once they have had an opportunity to review the information contained in the report, to hopefully outline a process to ensure these matters are addressed in a timely manner.

Conclusions

OPA 90 mandates for the Council include developing long-term partnerships with government and industry, while also directing it to take steps to eliminate the previous complacency of those groups that led up to the 1989 Exxon Valdez oil spill. This is a challenging mission to achieve. It can be difficult to maintain productive relationships with those to whom you must also provide critical feedback, especially during times of serious reductions in staffing and budgets for those entities. While PWSRCAC recognizes this report could generate tension with Alyeska and some of the state and federal regulatory agencies with oversight responsibilities at the VMT, we hope to work with all parties to address these issues in a manner that will lead to a constructive and productive path forward.

Alyeska, state and federal regulators, and the Council all do their best to work with all parties in a highly professional manner, seeking results that will help prevent further oil spills or accidents. This mature, collegial, and cooperative approach has helped protect Alaska from another Exxon Valdez-type of oil spill or other devastating accident over the past three plus decades. But, as the report findings indicate, it takes constant vigilance, training, and monitoring to help ensure that Alaska will be spared another major oil spill.

We know that Alyeska and the associated regulatory agencies have dedicated staff working daily on the Trans Alaska Pipeline System, doing their best to ensure it is operated as safely as possible with the resources they are given. We also recognize that Alyeska and the associated regulatory agencies all have full plates in fulfilling their missions which benefit our nation in terms of safe transport and storage of Alaska North Slope crude oil. And, considering the events taking place in global affairs, the importance of those missions continues to grow.

PWSRCAC recognizes that while zero defects in such missions is the clear intended goal, we also acknowledge there will be times when issues, problems, and deficiencies arise that must be dealt with and resolved once identified. The view of the PWSRCAC, as authorized by Congress, is that the work of this Council should be carried out in a collegial, cooperative, and constructive manner to be of substantial assistance to the mission of Alyeska, and the associated state and federal regulatory agencies, in transport and storage of oil safely through the VMT and associated tankers.

PWSRCAC sincerely appreciates the spirit of cooperation present at its March meeting with Alyeska and hopes to continue to support their work to address the issues raised in the report in the long term. The Council’s Board of Directors and staff agree with the sentiment expressed by Alyeska executives after their receipt of the draft report, that this report provides an opportunity to make Alyeska better by looking into these issues, addressing problems, and making sure employees are heard. It is the Council’s hope that Alaska Congressional Delegation, Governor, Legislature, and regulatory agencies with oversight of the VMT also view the findings and recommendations in the report as an opportunity for improvements to the system.

The Council stands ready to support Alyeska, and state and federal regulatory agencies, in our role as an advisor. We believe firmly that the greatest successes result from citizens, industry, and regulators working together to maintain and improve safeguards designed to prevent and prepare for future oil spills.

Full report: 

Assessment of Risks and Safety Culture at Alyeska’s Valdez Marine Terminal  (4.1 MB)

Transmittal letters: 

Transmittal letter to the Alaska Congressional Delegation  (0.4 MB)

Transmittal letter to Alaska Senate President and Speaker Of The House  (0.3 MB)

Transmittal letter to Alyeska Pipeline Service Company  (0.3 MB)

Transmittal letter to Governor Dunleavy  (0.3 MB)

Transmittal letter to Joint Pipeline Office  (0.3 MB)

Transmittal letter to OSHA  (0.3 MB)

* Correction: Please note the file name was corrected 4/24/2023 at 1:50 p.m. New direct link: https://www.pwsrcac.org/wp-content/uploads/filebase/programs/terminal_operations/Assessment-of-Risks-and-Safety-Culture-at-Alyeskas-Valdez-Marine-Terminal.pdf

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