Regulators reject using corroded pipeline

Saturday, May 8, 2010

A major oil company's request to continue using a corroded undersea pipeline at an offshore platform in Cook Inlet has been roundly rejected by federal regulators.

As a result, the company, Chevron Corp., said it shut down oil production at its Anna Platform last week. Before the shutdown, the platform on the west side of Cook Inlet had been producing roughly 900 barrels of oil per day.

Before the shutdown, Chevron sought a waiver from federal rules that require pipelines in sensitive locations to be repaired when corrosion has eaten away more than 50 percent of their wall thickness.

In one section of pipe near the seafloor, the line had lost more than 60 percent of its wall thickness. Instead of fixing it, Chevron asked for permission a year ago to keep using the corroded pipeline indefinitely.

Chevron proposed to inspect the pipeline periodically and inspect the area weekly by air to look for an oil sheen.

Federal regulators asked for public comment on the oil company's proposal this year and got just one: from the state's Petroleum Systems Integrity Office.

In the comment letter, state officials raised several concerns about Chevron's proposal. For example, weekly air patrols to look for oil sheen were "both impractical and dangerous," the letter said.

"Aside from the regulatory matters, the political and environmental ramifications of a spill in Cook Inlet are grave and if oil is released the consequences will impact our entire oil and gas industry," the state's letter said.

On April 27, while the nation was roiling from news of a massive offshore oil spill in the Gulf of Mexico, the federal Pipeline and Hazardous Materials Safety Administration rejected Chevron's request for a special permit.

The federal agency didn't order Chevron to shut down the Anna Platform but it said that if Chevron continued to operate the corroded line it would be "potentially subject to enforcement action."

Chevron said it shut down Anna as soon as it received the letter.

The loss of Anna's oil production is another blow for Chevron business in the Inlet, which has been producing less oil since the Redoubt volcano eruption prompted the shutdown last spring of one of its Cook Inlet oil storage terminals.


The corrosion attacked a 134-foot pipeline called a riser.

Chevron filings show the riser was installed in 1967, as Anna, the nearby Bruce Platform and other oil platforms were installed amid Cook Inlet's oil boom.

Offshore oil and gas operators use risers to link a platform to a subsea pipeline. The riser that became corroded carries oil from Anna up through one of Bruce's steel platform legs, where it connects to another pipeline that sends oil from both platforms to production facilities at nearby Granite Point.

Chevron spokeswoman Margaret Cooper said the company's Unocal subsidiary is working with federal regulators on how to repair the corroded pipeline so that oil production at Anna can resume.

Anna produced less than 1 percent of Cook Inlet's oil -- 846 out of 6,771 barrels per day -- in the first three months of this year, state records show.

Last spring, Chevron told federal regulators that it could not meet a 180-day repair requirement for the riser because it was in "an inaccessible location" inside the bottom of a platform leg. In asking for the waiver, the company argued that the fluid pressure in the pipeline was low enough that it wouldn't put sufficient stress on the line to cause a leak.

Dennis Hinnah, the federal pipeline administration's western regional deputy director, said he didn't believe a leak was imminent but he believed the data collected by Chevron showed corrosion in the line was getting worse.

"Part of it is their interpretation versus our interpretation of the data," he said.

He said his agency has not determined if Chevron is liable for penalties.

Federal rules require operators to schedule evaluation and repair of pipelines that have lost more than 50 percent of their wall thickness within 180 days of detection. According to Chevron's filings with the pipeline administration, the company detected the corrosion in October 2008 and requested the waiver in March 2009.

Cooper, the Chevron spokeswoman, said she had no details on how the company plans to fix the corroded line.


No regulators interviewed for this story said they have a handle on exactly how much corrosion exists in Cook Inlet oil and gas infrastructure and how it compares to the corrosion that has been causing leaks in the North Slope pipelines in recent years.

For one thing, a variety of state and federal agencies regulate corrosion in Alaska pipelines and they don't keep corrosion statistics all in one place.

State regulators have no authority over corrosion in equipment on offshore platforms -- even though the Bruce Platform is located in state waters -- but they said this week they are monitoring the situation. They regulate any spills that happen in the Inlet.

"This is an area where the state is learning more and more," said Allison Iverson, who runs the Petroleum Systems Integrity Office.

"I personally couldn't tell you wall-loss statistics for Cook Inlet versus the North Slope," she said.

One thing is clear: There have been fewer major oil spills from Cook Inlet pipelines than there have been on the North Slope in recent years, even though the Cook Inlet lines are older.

Hinnah, of the federal pipeline administration, said corrosion problems like the one inside the Bruce leg are "a rare event" in Cook Inlet.

Lois Epstein, a petroleum engineer who advises environmental groups, compiled a report based on state records in 2002 showing that corrosion was the most commonly listed cause for Cook Inlet onshore and offshore pipeline spills between 1997 and 2001.

"When she did this report, it was unbelievable -- we were having a spill a month," said Bob Shavelson of Cook Inletkeeper, a conservation group.

But in the ensuing years, "we had a dramatic decrease in spills," he said.

Epstein's report says that pipeline regulators wrote a letter of concern to Union Oil in 1998 about corrosion involving a line or lines between the Bruce and Anna platforms in 1998. But the report did note any corrosion-related spills at either platforms.

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