Energy & Mining

A project is underway to replace the power line across Turnagain Pass on the Kenai Peninsula.  Skiers and snowmachiners between Turnagain Arm and the Johnson Pass campground are advised to be on the lookout for stockpiles of materials placed there by the Chugach Electric Association, which may be covered with snow as the winter wears on.

At its heart it was yet another episode of extreme weather. In this case it happened in the winter of 2010 and 2011. It was extreme snowfall, avalanches and icing, and power lines were wiped out.  It took weeks to restore them.

The Chugach Electric Association spent at least a couple of million dollars to get the intertie between Anchorage and the Kenai Peninsula working again. Spokesman Phil Steyer says the line, built in 1962, has seen better days, and is very much in need of replacement:

A $15-million appropriation from the Legislature will pay for replacing the highest priority section of the line, through the mountains above Turnagain Arm along the Seward Highway, where the damage caused by the storm can easily be seen in all the trees that simply broke, at the upper parts of their trunks, due to heavy snow and ice load.

The new power line will be capable of doubling the capacity of the intertie, and will be elevated higher above the ground, so it can more easily shed ice:

In all, 21 spans of the transmission line sagged to the ground during that storm.  The fifteen miles being replaced this winter will add to the amount of the 90-mile line that was replaced after the 2011 avalanches.

Steyer says after Turnagain Pass the next part of the intertie they’re looking at is the section between Powerline Pass and Indian Creek. That’s where a lot of trees fell during last fall’s windstorm, and knocked out the power up Turnagain Arm.

State lawmakers today heard an update on a proposal to get natural gas from the North Slope to Southcentral Alaska. The project concentrates on in-state delivery, and involves a slightly larger gas line than previous plans. House Speaker Mike Chenault and Representative Mike Hawker have been pushing a pipeline in recent years and say they plan to reintroduce a gas pipeline bill this session.

The Joint In-State Gas Caucus met in Anchorage to get an update from the Alaska Gasline Development Corporation. Frank Richards is the Pipeline and Government Affairs Manager with the agency. He presented an update on the Alaska stand alone pipeline. He says the project still runs a pipeline from Prudhoe Bay to Beluga/Point McKenzie, but it has a new design premise – the main feature being a slightly larger pipeline with lower pressure.

“What this also means is that we will be able to provide that gas to Fairbanks and the other communities along the way at a significantly lower cost,” Richards said.

Previous plans included a 24 inch pipeline, plus costly processing facilities and compressor stations along the way to handle higher pressure. Richards says the plan still calls for moving 500 million cubic feet of gas per day, the AGIA limitation. But Richards says the changes have many benefits.

“We’re going to eliminate costly facilities along the line. We’re gonna have industry standard pipes fittings and equipment. And we’ll have a lean gas case that will still allow for the inclusion of propane if there are propane needs along the line to meet interior Alaska’s needs. And then the lean gas means greater access for Alaskan communities along the way. No need for expensive straddling facilities, greater access, lower operating costs,” Richards said.

Richards also reported that the environmental impact statement for the more than 700-mile long pipeline is complete and that his agency has acquired the necessary state rights of way. Federal rights of way are still being sought. The legislature created the Alaska Gasline Development Corporation to advance a stand alone pipeline in 2010.

State Representative Mike Chenault pushed for the gas line along with Representative Hawker last year in the legislature. It passed the House but died in the Senate. Hawker says its an important measure.

“We have to look at getting natural gas into the hands of Alaskans as a public works project. Just like highways and sewers, water and sewer systems are public works projects. Right now, with the cost of energy in the interior and the looming natural gas shortage here in Cook Inlet. I can insure every one of as elected officials that the first time that you flip the switch and the lights don’t go on that the public is going to be asking, ‘why didn’t you make this a sufficient priority,’” Hawker said.

Hawker says legislators are trying to get a jump on the session preparing new pipeline legislation and already have a new 42-page bill.

Officials estimate the project will cost $7.7 billion. The AGDC is asking for 400-million dollars from the legislature in 2013 to fund the pipeline.

 

The Deepwater Horizon blowout of 2010 marked the first time that chemical dispersants were injected into an oil spill underwater. Now a report from government scientists finds remarkably few ill effects from these chemicals. That has heightened concerns of several Native groups, and others who have been pushing for tighter regulation of dispersants.

Lead author of the report, Doctor Jane Lubchenko, the head of the National Oceanic and Atmospheric Administration, was a key advisor to Environmental Protection Agency head Lisa Jackson when she made the decision, shortly after the blowout, to allow them to use dispersants underwater.

“It was our judgment that use of dispersants would help the oil be naturally biodegraded more naturally, and that certainly seems to have been the case” Lubchenko said.

Nearly two million gallons of dispersants, mostly Corexit, were used on the spill, close to half of it underwater while the oil and gas was gushing out of the wellhead and the broken pipe a mile deep in the waters of the Gulf of Mexico.

The result was a sort of undersea fog of droplets of oil mixed with Corexit. Just months later, scientists couldn’t find the fog, and there is some evidence that oil eating micro-organisms ate it. Depending on which scientist you talk to, it’s either gone or it made its way to the bottom and is still percolating through the food chain. The report says the location of the fog has yet to be determined.

But what if a spill happened in cold arctic waters? Would dispersants do the same thing? That’s a question everybody wants the answer to. The industry and government laboratories have just begun research to try to get answers. Cheryl Rosa is deputy director of the Arctic Research Commission, which recently issued a set of recommendations for what needs to be done to improve arctic oil spill response capability:

“The amount of dispersant that was applied in Deepwater Horizon was unprecedented,” Rosa said. “It was basically the world’s supply, from what I understand. And we need to be extremely well informed with respect to the Arctic about how that’s going to work. If they get applied, what the toxicity issues are, what the community concerns should be and hopefully this new research will start to get at some of those some of those questions.”

Jane Lubchenko and the co-authors of the Deepwater Horizon science report talk about a public perception problem about the safety of seafood from the Gulf of Mexico. The government had a series of fisheries closures near the spill site and within a year re-opened all the fisheries. Lubchenko says the evidence for contamination just never showed up.

“We did learn a lot about that and discovered that in fact the fishes in particular, we were not able to find levels of dispersants in them after they had been swimming around in the ocean for awhile.”

She was quick to add that shellfish would not metabolize the chemicals as fast as finfish. She went on to say that any adverse effects that might have been found would not have been included in her report — because such damages are still the subject of litigation.

“Our papers don’t talk about consequences of dispersants because we don’t know that yet and the information that may be in hand, may be part of the legal proceedings,” Lubchenko said.

There is evidence on the record that oil mixed with dispersants is more toxic than oil on its own, particularly to larvae of marine life. And along the northern shores of Alaska, with their biologically rich lagoons, Cheryl Rosa says the questions about what such mixes could do are critically in need of answers.

“Basically dispersants get applied, drive oil into the water column where it is broken down to parts and pieces,” Rosa said. “They’re trying to figure out what the consequences of wide scale use of dispersants are. And that’s a work in progress as far as I can tell. And as far as the arctic goes, that question is still very open. It’s something in need of research.”

In August, Earthjustice and other environmental organizations sued EPA to force tighter regulation of dispersants. Then last month, a number of scientists and doctors joined several Alaska Native organizations in petitioning the EPA to ban Corexit or any other dispersant of undisclosed composition.

There’s buzz in Washington that a recent report commissioned by the Department of Energy could speed up approval of export terminals for liquefied natural gas in the Lower 48. Some energy experts say the effect will be minimal on Alaska. But that doesn’t mean there isn’t a market for Alaska’s gas.

The report says that overall, exporting LNG will result in a net-benefit for the economy. The country has a glut of natural gas, a supply that Deloitte’s Tom Choi says Americans underestimate.

That supply could help meet the growing global demand.

“There could be enough of a market for Lower 48 and Alaskan LNG,” Choi said.

Some advocates for exporting LNG hope the Department of Energy will take the report’s findings into consideration when it weighs the pending fifteen permit applications.

Choi said the Department of Energy’s delays could hurt the chances of U.S. LNG making it to foreign markets because Australia is developing its own pipeline.

“Well I think part of it depends on what the DOE does. If DOE delays further, then it makes Australia more attractive,” Choi said.

And more attractive to Asian markets in Japan, Korea and India. The same markets Alaska producers might eventually sell to if producers on the North Slope opt to plunk down the tens of billions of dollars required to build a pipeline.

Charles Ebinger from the Brookings Institution says the state should skip the pipeline and build an export terminal in Prudhoe Bay.

“A very reasonable question would be: Has anybody seriously looked at an LNG project’s cost compared to a pipeline route down to tidewater,” Ebinger said. “I think it would be cheaper.”

Ebinger says a terminal off of the North Slope would take significantly less time to build than a pipeline, meaning the gas could get to market sooner.

Governor Sean Parnell has proposed spending some $300 million for a liquefaction plant on the North Slope.

A three ring binder the size of a toaster oven sits on a small table in Cathy Foerster’s office in downtown Anchorage. The chair of the Alaska Oil and Gas Conservation Commission wants easy access to information on each of the Bureau of Land Managment’s so-called legacy wells. There are 126 of them:

 “What the notebook contains, for every well it contains a picture of what the surface looks like. And most of them are not very pretty.”

Foerster is from Texas, a fact she is quick to point out. And in Texas, orphan wells- where companies drill for oil, go bankrupt and then leave the well without cleaning up- are a big problem. So when she first joined the commission in 2005, she wondered if there were many orphan wells in Alaska.

“I was quickly able to determine that the only problem we have in this state, other than the three or four wells that don’t have an operator we can go back on, the only problem in this state is the one created by the federal government.”

That problem is mostly in the National Petroleum Reserve- Alaska, which is managed by the Bureau of Land Management. The exploratory wells were drilled by federal agencies from 1944 to 1982 to assess the oil and gas potential in the area. Alaska is the only state where federal legacy wells exist. Most of the wells have been left untouched for decades. One near Barrow is nicknamed the “whistling well” because it still occasionally releases gas. And Foerster says even the surface of many of the drill sites are an environmental mess:

“One well site has hundreds of drums, barrels that were left at one time filled with something, drilling mud, chemicals, who knows what. But all of those hundreds of drums have corroded and are empty, and whatever was there has leached into the tundra, and the drums are still out there rusting away.”

In seven years since Foerster first approached BLM about the problem, the two agencies haven’t even come to terms on which wells need acute attention, and which ones can be left alone. She says it has been difficult to get basic information from BLM on the status of the wells. Foerster was hopeful a U-S Senate Hearing on the issue this July would speed up the process. But that hasn’t happened.

“The attitude was, they’re out of sight, out of mind. Nobody knows. Nobody cares. They’re expensive to clean up, so we’re not going to do it.”

But the BLM is working to address the problem wells, although the pace of work is slow. Since 2004, the agency has cleaned up six of the highest priority wells for $60 million dollars. The state has questions about whether the work was completed to industry standards.

Ted Murphy is the associate state director of BLM. He says the state is exaggerating the environmental threat the wells pose:

“Honestly I think there’s been some misrepresentation on the status of the wells.”

Murphy acknowledges many of the wells look bad. They have an “optics problem,” as he puts it. But he says:

 “It’s not a big environmental risk.”

Murphy says BLM is monitoring the wells to make sure they do not deteriorate to the point where they do become an environmental risk. And this month, the agency is planning to release a strategy for properly plugging and abandoning the remaining legacy wells. The agency hopes to address 13 wells in the next four years, if they can find funding:

“The BLM and the Department of Interior are taking this very seriously. And We’re also moving with a pragmatic approach to the completion of this.”

When the Interior Department makes NPR-A available for oil leasing, it can require companies clean up the legacy wells as a condition of the leases. But under the proposed plan for developing NPR-A, only about a quarter of the wells are on land available for leasing.

Foerster was infuriated when Interior Secretary Ken Salazar, who likes wearing cowboy hats, announced that so much of the reserve would be set aside for wilderness protection:

 ”Excuse me, if you’re going to get on your high horse with your pretty hat and say that you’ve got to protect this iconic piece of wilderness, then you need to clean up the messes you’re responsible for first.”

At the rate the BLM is working, Foerster is not optimistic those legacy well “messes” will be cleaned up any time soon. She suspects that hefty three ring binder will be sitting on her office table as long as she is commissioner.

Plans for a 29-mile pipeline underneath Cook Inlet were announced Wednesday.  Cook Inlet Energy, one of many new players in the area, is the company applying for a right-of-way lease from the Department of Natural Resources.  An underwater pipeline would solve several problems for Cook Inlet oil producers, but other concerns remain.

What it is: a 29-mile, horseshoe-shaped, eight-inch line from Cook Inlet Energy’s Kustatan production facility on West Foreland Point, directly across the Inlet from Nikiski.  The line will travel south for several miles to avoid deep trenches and fast currents, and finally connect at the Tesoro Refinery in Nikiski.  The line’s maximum depth will be 200 feet, according to CIE’s project description, which also describes the project’s purpose as necessary to “bypass the aging infrastructure on the west side of Cook Inlet to eliminate risk of volcanic activity and ice movements to oil shipments.”

That has been the main reason people have been pushing for a pipeline since Mt. Redoubt erupted last in 2009, exposing the risks associated with the nearby Drift River Storage Terminal.  With its storage capacity compromised after that eruption, tanker traffic in the Inlet increased to keep production moving from one side of the Inlet to the other.

This summer, the Cook Inlet Regional Citizens Advisory Council, or CIRCAC, released a position paper in support of a pipeline, which CIRCAC Executive Director Michael Munger said at the time would be much easier to manage in the event of a disaster or spill.

“If there is going to be an accident in Cook Inlet marine vessel traffic, the highest environmental risk is tanker traffic,” Munger said, referring to an assessment study put out by CIRCAC.  ”Ultimately what we’d like to see is the pipeline installed,” Munger said.

Construction is scheduled for April through August of 2014.  The line will have the capacity to carry up to 90,000 barrels per day.  Cook Inlet oil production was about 10,000 barrels per day in 2011.  Hilcorp, who operates the Drift River Storage Terminal, could be one of the companies to benefit from the lowered costs of production anticipated to come with the new pipeline. Hilcorp spokesperson Lori Nelson told the Peninsula Clarion Wednesday that there are too many ‘ifs’ right now to speculate on any agreement, but that they encouraged CIE’s success on the project.

While a pipeline mitigates the potential for oil spills in an increasingly busy production center, environmentalists and others still have plenty of concerns.  Bob Shavelson is the Director of Advocacy for the Cook Inlet Keeper.  A pipeline has been on their wish list for some time.  Despite what a pipeline might mean for tanker travel in the Inlet, he says regulations here still lag behind other parts of the state.

“We’re really in sort of a regulatory backwater here and if there is a serious problem with a vessel that loses power or runs aground, we don’t have the capacity to really deal with that,” Shavelson said.

Cook Inlet Energy estimates cost of the pipeline at $50 million.  The public has until February 4th to submit comments to the state pipeline coordinators office at spco.records@alaska.gov.