Tag Archives: Prudhoe Bay

Warding off Corrosion Alaska’s Aging Pipelines – A New Growth Industry

On Tuesday, the University of Alaska-Anchorage held a grand opening for its new BP Asset Integrity and Corrosion Lab. The new facility, made possible by a $1 million gift from BP, expands the university’s mechanical engineering program.

The lab’s birth comes as Alaska’s oil pipeline and the corrosion experts who know how to diagnose and manage it are both aging. It holds promise for both technological innovation and developing a home-grown workforce to keep pipelines in good working order for decades to come.

“Having well-trained engineers on staff that are very familiar with the fundamentals of corrosion is a great step in the right direction,” said Matt Cullin, a mechanical engineer and assistant professor at UAA, who will serve as the lab’s director.

Costly corrosion

The grand opening comes one day after BP’s court-ordered deadline to pay the state of Alaska $255 million for money the state lost in revenue when more than 5,000 barrels of crude oil spilled on the North Slope in 2006, forcing a pipeline shutdown.  The company’s Alaska and national reputation has been tarnished by spills, ensuing lawsuits, and criminal charges – all evidence of greater scrutiny by federal regulatory agencies.

Corrosion-weakened pipes caused the North Slope pipeline failure. The company also had to pay a $20 million criminal judgment and a separate $25 million civil judgment in connection with the spills. When the civil judgment was ordered in May 2011, it was the largest per barrel penalty levied by the Department of Justice to date.

In the years since, BP has spent even more money on its Alaska operations at Prudhoe Bay, the nation’s largest oil field. Replacing the old system that leaked and caused the spills cost upwards of $500 million. The company has tripled the amount it spends each year on corrosion prevention and maintenance – up to $120 million in 2011. It’s renovated other lines and doubled its pipeline inspections to 160,000 per year, 110,000 of which specifically look for corrosion.

“BP has spent the last several years systematically strengthening safety and risk management based on lessons learned from 2006. We have made significant improvements in safety and reliability on the North Slope,” said Dawn Patience, spokesperson for BP.

The $1 million gift to UAA for an Alaska-based corrosion lab offers another investment in the long-term maintenance and management of Alaska’s pipelines.

“This will dramatically increase the capability of integrity testing in Alaska — providing results in a timely manner (and) providing students with the opportunity of hands-on research and internships in multiple industries in Alaska – not just oil and gas,” Patience said.

‘Driving a Pinto’ 

”Corrosion is going to be the biggest single threat to flow assurance in the next century,” according to Cullin, who likens the condition of Alaska’s pipeline infrastructure to an old car. “We’re driving a Pinto around.”

To keep the old car going, you could rebuild it each month to keep everything in working order. But that’s not financially viable. Pipeline management, as with the car, is about striking the right balance, Cullin said.

Preventing corrosion isn’t as simple as replacing a bad alternator. “Every day,” Cullin said, “corrosion is trying to outwit you.”

The trans-Alaska pipeline and the pipelines of Prudhoe Bay that feed it have been in place more than three decades, moving the oil that for decades has largely paid for Alaska’s state government. New pipeline-integrity engineers will continue to be in demand.

In addition to oil and gas, corrosion experts are needed in the aviation, military, shipping, fisheries and water-wastewater industries.

Alaska’s ‘corrosion crime lab’ 

The crown jewel of Cullin’s program is a $250,000 scanning electron microscope capable of making tiny details visible to the human eye. It will be able to detect minute surface changes in sections of pipe, and also identify particles.

“I kind of think of this as the corrosion crime lab for the state of Alaska. It’s kind of like CSI Sherlock Holmes style. We want to track down the root cause of the failure,” Cullin said.

Answering those mysteries could determine if a corrosion problem was due to not enough inhibitor injected into the pipeline, or to a surface film that may have prevented the inhibitor from working, or if the pipeline’s main material was faulty from the start.

The exciting part for Cullin is that it will give all levels of academics the opportunity to get involved – undergraduates, graduates and faculty. The idea is to create a lab where industry-funded research projects take place, and also where state and government entities turn for new information and ideas. Through a “corrosion track” – a series of two courses broken up by field experience over the summer – students in engineering and other relevant disciplines should be able to hit the ground running after graduation, Cullin said.

Cullin expects the corrosion classes will have a lasting impact on his students, something he calls the “corrosion glasses” effect. Regardless of what discipline they enter, he’d like to see them always have an eye out for whether designs or other new ideas adequately account for corrosion control. “I absolutely feel that they will match up to anybody from any other school with their fundamental knowledge about corrosion,” he said.

In addition to cultivating a home-grown work force, there’s another upside for industry: a quicker turnaround on failure analysis when something goes wrong. Instead of packing up parts and sending them to Houston, the material could head to UAA.

“It’s really going to be an all-purpose facility,” Cullin said. His goal is for the lab to become self-sustainable within five years, paying for itself through private or government research projects and possibly renting out time on the new microscope, which other departments have already expressed interest in.

SOURCE: http://www.alaskadispatch.com/article/warding-corrosion-alaskas-aging-pipelines-new-growth-industry

Judge: 2009 BP oil spill in Alaska did not violate probation

A federal judge ruled in Anchorage that BP was not negligent in its handling of a 2009 oil spill and therefore did not violate the terms of its probation.

U.S. District Court Judge Ralph Beistline found that the spill was not caused by corrosion or improper maintenance, as federal prosecutors in Alaska alleged.

At issue was whether the company should continue to be on federal probation, which it had been on intermittently since 2001. The latest term was due to end in November 2010, but BP’s federal probation officer asked that it be revoked before then because of the 2009 spill that dumped 13,500 gallons of oil onto the tundra.

The line that ruptured at the company’s Lisburne field on Alaska’s North Slope near Prudhoe Bay had been completely or partially frozen as long as six months as the ice inside expanded. Assistant U.S. Attorney Aunnie Steward alleged the company should have known the pipe was frozen and that cost-cutting measures resulted in improper maintenance and monitoring.

The judge agreed with BP’s lawyer Jeff Feldman. Beistline found that the circumstances surrounding the spill were unique and that BP “was following accepted industry practices at all relevant times and could not have reasonably expected a blowout similar to the one that occurred.”

A majority of the crude ended up under and near the pipeline, with the consistency of a “semi-solid surface,” a “stiff Slurpee” or a “snow cone,” according to an EPA agent on the scene at the time. But at least some of the oil ended up spreading across the Arctic tundra, in what was consistently described during the hearing as a “plume.”

In addition to probation revocation, the government charged that BP violated the Clean Water Act because some oil found its way into U.S. waters. Beistline ruled that had the company acted negligently it would have violated the act, but he concluded that “BP’s conduct at the time of the 2009 incident was not negligent given the state of knowledge that existed” at the time of the spill.

BP spokesman Steve Rinehart said the company is “pleased with the decision and appreciate the court’s attention.” He said BP knows “that the privilege of working in Alaska comes with a responsibility to maintain high standards. We will continue our commitment to running safe and compliant operations.”

Beistline wrote that although the week-long hearing was “costly to all,” it was in the end “worthwhile if only to demonstrate the high regard society places on the environment as the nation’s natural resources are harvested.”

Had the judge ruled against BP, the company could have faced additional fines, and the government might have brought felony charges stemming from the spill.

SOURCE: http://www.alaskadispatch.com/article/judge-2009-bp-oil-spill-alaska-did-not-violate-probation

Third North Slope oil spill in a week

Small oil spills on the North Slope are continuing to keep BP Alaska crews and state environmental officials busy this summer.

The company has had to deal with three small spills in just the last week, events that appear to be related to maintenance and testing activities.

BP Exploration Alaska spokesman Steve Rinehart said Monday all three are still under investigation by company experts so it’s not clear whether corrosion — a major issue for the aging oil field — is to blame.

But summer is typically the time oil field maintenance and associated testing of facilities is at its height. “It’s a big busy season and while we don’t know the exact mechanism or cause of these three events, they happened at a time when pressures are going up and coming down,” Rinehart said. “And we’re in the middle of maintenance.”

On July 16, an underground section of pipe ruptured at the Lisburne field, dumping as many as 100 barrels of fluid — mostly methanol and water and a small amount of crude — onto a gravel pad and into a nearly tundra pond. The leak occurred while work crews were testing newly installed valves in that area.

Then on Thursday, July 21, BP discovered a new spill, this one in a flare pit at Flow Station 2 in the Prudhoe Bay unit. BP and state Department of Environmental Conservation officials said about 200 gallons of fluid — a mix of briny water, gas and crude oil — spilled into the flare pit at the production facility, creating an oil ring around the pit.

Rinehart said the oil is being cleaned up. “It was a minor event and there will be virtually no environmental impact,” he said, noting that the flare pit is designed as a place to burn oil and gas mixtures.

Flow Station 2 has been shut down while BP technicians look into what caused the leak. Rinehart said the company doesn’t anticipate any major problems due to the shutdown of the facility, which is where oil is separated from gas and water before the crude is sent to another processing facility before shipment down the trans-Alaska pipeline.

Also on Saturday, BP workers found another leak, this one less than a barrel in size, coming from a flow line called N-74 next to the N Pad. Rinehart said the spill was discovered while crews were testing an emergency shutdown system at the pad. The line was not in service at the time.

Again, Rinehart said, the company still isn’t know what caused the leak.

But corrosion is a serious issue on the North Slope and BP as well as other oil field operators spend tens of millions of dollars a year on maintenance and repair programs aimed at fighting the problem in facilities that are more than 30 years old. There are hundreds of miles of pipeline on the North Slope and thousands of valves and other pieces of equipment subject to corrosion.

Last year, after a years-long examination of oil spill records and reports, DEC officials found that flow lines in particular are susceptible to corrosion because the material they carry — the mix of water, gas and oil — is especially corrosive.

BP, in part due to major corrosion-related leaks in 2006 at Prudhoe Bay, has substantially beefed up its corrosion detection, maintenance and repair program. The 200,000-gallon spill prompted criminal charges against the company and lawsuits by the state and federal governments. In May, BP and the federal government reached a settlement of that case in which BP, in addition to steps it had already taken, agreed to independent monitoring of its facilities and to research new leak detection systems.

SOURCE: http://www.alaskadispatch.com/article/third-north-slope-oil-spill-week

BP Ducks Investor Suit for Prudhoe Bay Spill

(CN) – The 9th Circuit on Wednesday dismissed a securities-fraud complaint against BP Exploration related to the oil company’s 2007 conviction for negligently discharging oil into Alaska’s Prudhoe Bay.

This decision from the federal appeals court in Seattle unanimously reverses a federal judge’s finding that BP’s contractual filings with the U.S. Securities and Exchange Commission laid adequate foundation for securities fraud.

BP Exploration pleaded guilty in 2007 to violating the Clean Water Act after some 200,000 gallons of oil befouled Prudhoe Bay on Alaska’s North Slope. The company admitted that the spill resulted from internal corrosion in its pipelines. In its plea agreement, BP said it knew about accumulated sediment had caused the corrosion, but it had neglected to fix the problem.

Claude Reese led a federal class action, claiming that BP’s negligence amounted to securities fraud, as the spill had caused the company to temporarily shut down its operations in the bay and costing investors billions of dollars.

Despite knowledge of the corrosion, BP failed to take action or notify investors, Reese argued. He also claimed that the oil company’s executives had made misleading statements about the operation, and that BP continued to mislead investors though its SEC filings.

U.S. District Judge Marsha Pechman in Seattle tossed most of Reese’s claims for failure to meet the heightened standards of the Private Securities Litigation Reform Act of 1995. But the judge said Reese could move ahead with the claim that accused BP of defrauding investors through SEC filings.

On appeal, a three-judge panel of the 9th Circuit reversed, finding that the filings were forward-looking contractual promises, the breaking of which did not amount to fraud.

“The breach of a contractual promise of future performance typically does not constitute a misrepresentation that will support an action for fraud,” Judge Ronald Gould wrote for the panel. “BPXA’s contractual promise to act as a prudent operator did not expressly or implicitly assert that BPXA was in full compliance with its obligations thereunder, and we do not view the public filing of the ORC Agreement as the sort of traditional fraudulent misrepresentation of fact that could induce investors mistakenly to buy securities. We hold that, in this case, the public filing of a contract containing a promise of future compliance did not, upon the contract’s breach at a time after execution, provide an actionable misrepresentation for the purposes of a private damages action for securities fraud.

SOURCE: http://www.courthousenews.com/2011/06/29/37791.htm