Current weather

  • Clear sky
  • 18°
    Clear sky
  • Comment

CIE files paperwork for trans-Foreland pipe

CIRCAC says pipeline safer, Hilcorp plans to 'watch closely'

Posted: December 5, 2012 - 10:01pm  |  Updated: December 6, 2012 - 11:19am
The proposed route of the 29-mile pipeline would link west side oil production facilities with east side processing facilities. The horseshoe route would avoid a deep trench and strong tidal currents between the East and West Forelands.  Clarion graphic
Clarion graphic
The proposed route of the 29-mile pipeline would link west side oil production facilities with east side processing facilities. The horseshoe route would avoid a deep trench and strong tidal currents between the East and West Forelands.

State officials on Wednesday published Cook Inlet Energy’s recently-submitted plans and right-of-way application to build a 29-mile pipeline across Cook Inlet to connect west side oil production with east side processing facilities.

The Anchorage-based oil and gas company, a subsidiary of Miller Energy, has proposed building the pipe from its Kustatan production facility to the Nikiski – Kenai Pipeline Company Tank Farm. Construction on the 8.625-inch pipe that could transport up to 90,000 barrels of oil per day is scheduled to begin in April 2014 with the project completed by August of that same year. About 26 miles of the pipe’s path — one shaped like a horseshoe to avoid a deep underwater trench and high tidal currents between the east and west Forelands area — goes through state lands, according to a public notice.

Comments on the company’s plan are being taken by the State Pipeline Coordinator’s Office through Feb. 4, 2013.

Cook Inlet Energy CEO David Hall said last week his company has made other area producers aware of the plan and he hopes they will want to use the pipeline. Hall said he expects the line will reduce the cost of getting oil to production.

“We are excited about it,” he said. “We are hopeful as time goes on and people get more familiar with the project and comfortable with it they’ll offer more support and participate in using the line.”

Currently, Hilcorp’s and Cook Inlet Energy’s oil arrives at east side processing facilities through tankers making laps between longstanding west side infrastructure. Specifically, the Drift River tank facility, along with the Christy Lee loading platform, allow those two producers to store crude oil in tanks and pump it into tankers that haul it across the inlet to the Tesoro refinery.

However, shipping oil across the inlet has risks because of tides, currents and ice conditions. According to a recent Cook Inlet Regional Citizens Advisory Council study, it poses the greatest risk to the inlet due to tankers’ great oil capacity and concentrated operations.

A July position paper penned by CIRCAC recommended Hilcorp replace use of Drift River and its tanker system with a trans-Foreland pipeline to reduce the risk of an oil spill at the terminal location. Concerns about Drift River’s safety stem from its proximity to Mount Redoubt, an active volcano.

Over the summer, Hilcorp spent $18.5 million to reinforce a berm designed to protect the facility against mud flows caused by volcanic activity, such as what occurred during the 2009 eruption.

Cook Inlet Energy estimated the cost of the pipeline in its application at $50 million — $15 million for materials, $35 million for construction and installation. It estimated the annual cost of operating and maintaining the line at $5.2 million per year. Construction would generate 130 part time jobs in addition to the 12 positions created to operate and maintain the pipe with an estimate life of 30 years, the company wrote.

Hall said the pipeline would be a safer alternative to meet industry goals of increasing oil production from Cook Inlet fields than Drift River.

CIRCAC Director of Public Outreach Lynda Giguere agreed, adding the group “whole-heartedly” supports Cook Inlet Energy’s proposal.

“We are supportive of their plans and we don’t prefer one over the other,” she said of Hilcorp’s Drift River facility to Cook Inlet Energy’s pipe. “We just think (a pipeline) is a safer way to go. We would support any responsible owners’ or operators’ plans to build a sub-sea pipeline.”

Cook Inletkeeper’s Bob Shavelson said he “applauded” the company for their initiative on the project.

“Hopefully it will lead away from the crazy idea of storing oil at the base of an active volcano,” he said. “... I think if there is going to be additional production in Cook Inlet, I think most people agree the smartest way to get it from the west side is by pipeline not by storage at the base of a volcano and increased tanker traffic.”

In recent years, numerous smaller oil and gas companies have moved into the area with hopes of reviving production from inlet fields and tapping smaller, undiscovered oil and gas pockets through exploratory drilling.

Cook Inlet oil production peaked at just over 200,000 barrels of oil per day in the 1970s. Production bottomed out at 7,000 barrels a day in 2009 but increased to about 10,000 barrels per day in 2011, according to the Alaska Department of Natural Resources.

“I know that there has been some concern that (the pipe) might be too small,” Hall said. “We look at it as, well, if it is, that’s kind of a good problem to have because you can always add a second line.”

Hilcorp External Affairs Manager Lori Nelson said the two companies have not talked about a partnership on the pipeline and there are still “too many ifs” to speculate on an agreement. However, Nelson said pipeline transmission would likely be a cheaper option as opposed to the current system if production significantly increased and is an idea “that we would take serious consideration for.”

“Clearly their developments will be something that we watch closely, and door open or door closed? I don’t know at this point,” Nelson said. “But, we’ll see where this takes us and we’ll certainly encourage their success.”

During the state’s public notice period, if no request is made for a public hearing and no objections are received about the proposal from a entity with significant financial interest, the office, at the earliest, could issue a right-of-way lease by mid to late February, said Graham Smith, public information officer for the state pipeline coordinator’s office.

The state’s process includes a commissioner’s analysis and proposed decision. In that document, Smith said, the commissioner of the Department of Natural Resources would likely look closely at the company to make sure it is “fit, willing and able” to “construct, operate and maintain a pipeline in the best interest” of the state.

“For big companies, Exxon, BP and these other folks, these are generally a matter of some extra paperwork because clearly they have the assets to take care of any spills or anything that would come along,” he said. “For smaller companies like Cook Inlet Energy, it can be a more involved process.”

In an email, Smith said public comments the commissioner deems relevant can be incorporated into the lease stipulations and “in many cases result in additional protections outside of the statute requirements.”

Comments may be submitted my mail to 411 W. 4th Ave., Suite 2, Anchorage, AK, 99501, or by email to spco.records@alaska.gov, or by fax to 907-269-6880.

Brian Smith can be reached at brian.smith@peninsulaclarion.com.

  • Comment

Comments (10) Add comment
ADVISORY: Users are solely responsible for opinions they post here and for following agreed-upon rules of civility. Posts and comments do not reflect the views of this site. Posts and comments are automatically checked for inappropriate language, but readers might find some comments offensive or inaccurate. If you believe a comment violates our rules, click the "Flag as offensive" link below the comment.
Watchman on the Wall
2893
Points
Watchman on the Wall 12/06/12 - 12:49 pm
0
0
This is one

This is one with many other Plans to come out of the dried up Cook Inlet area if i was a guesser. As i said before with all the massive construction of oil & gas related buildings and upgrades to plants out along the North road, they have a plan and it's all about to start up again from the supposed dry holes with no oil or gas in Cook Inlet that have had a MIRACLE happen and Now we have both OIL & GAS AGAIN.
Can i get a Thank You Jesus here for this Miracle?
Yes it will take a few yrs to get started they say, but i would say that they have already started and it ain't gonna take as long as they say. Time always reveals things to come, no matter what men may say, does it not?

beaverlooper
3198
Points
beaverlooper 12/06/12 - 02:42 pm
0
0
Can i get a Thank You Jesus here for this Miracle?

No. Thank money and new technology.

Watchman on the Wall
2893
Points
Watchman on the Wall 12/06/12 - 07:42 pm
0
0
Why the loop?

I wonder why the picture shows quit a loop down that far, rather than straight across? Does this thing hook into some offshore platforms as well?

Sam Von Pufendorf
1088
Points
Sam Von Pufendorf 12/06/12 - 08:00 pm
0
0
HELP for WoW

From paragraph two, sentence three of the above story: "About 26 miles of the pipe’s path — one shaped like a horseshoe to avoid a deep underwater trench and high tidal currents between the east and west Forelands area — goes through state lands, according to a public notice."

Watchman on the Wall
2893
Points
Watchman on the Wall 12/06/12 - 09:51 pm
0
0
Thanks SVP, WOTW

My little peabrain missed that part as i was speed reading and i was actually wondering about tidal actions.
Thanks for pointing that out.
Also did you see my responce to your question in the killer whales post in answer to where are all the dinasaurs?
I answered your question and wondered why no reply to my answer.

You of course know that with your post above that you are setting some up to post that there is no help for WOW, and thats called baiting of Trolls, or Trolling & it might be illegal to go fishing for them like that, don't ya?

5akman
60
Points
5akman 12/07/12 - 10:54 am
0
0
Under water rupture potential?

So is the thought that a pipe rupturing underwater is going to dump a fraction of crude into the inlet vs a tanker that runs aground? I suppose that if you looked into the volume of an 8" pipe 26 miles long (about 1100 gallons per mile), that it would be less of a potential environmental hazard than the west side storage facility or a tanker? just wondering about potential spill/rupture.....

Sam Von Pufendorf
1088
Points
Sam Von Pufendorf 12/07/12 - 11:34 am
0
0
5akman

Using your calculation, that means the entire pipeline, in a static state, holds roughly 700 bbls of oil. One oil tanker of moderate to small size holds tens of thousands of barrels of oil.
Now, consider one catastrophic eruption of Mt Redoubt and the Drift River Terminal at even 1/3 capacity (thousands of barrels) being in the path of it's pyroclastic flow and a torrential river of mud.
I, for one, am glad they are taking this step to avert a larger disaster. Is there a potential for a spill? Yes! Is there a potential for a rupture? Sure! But I believe CIE sees a greater liability in the Drift River terminal than a well constructed and well maintained pipeline.

beaverlooper
3198
Points
beaverlooper 12/08/12 - 02:09 pm
0
0
Hilcorp isn't going to want

Hilcorp isn't going to want to shut down Drift, because when it's done it has to be cleaned up (there's a lot of oil in the ground there from spills over the years)and everything removed , the pipeline that goes there has to be taken up and the ship loading platform removed. That will be some good work for someone but it will cost a LOT of money. Plus they just invested 18.5 million more to keep the place going.These guys don't have the deep pockets of an EXXON.

Sam Von Pufendorf
1088
Points
Sam Von Pufendorf 12/08/12 - 03:34 pm
0
0
Hillcorp

While Hillcorp doesn't have the deep pockets of EXXON, BP, Conoco or Chevron, they aren't exactly hurting for cash. "Hilcorp is the third-largest, privately-held exploration and production company in the United States." (http://www.hilcorp.com/default.aspx)
Companies such as Hillcorp will often make an investment today only to find out tomorrow there was a better way. While $18.5 million sounds like a great deal of money, what do you believe the liability would be if Drift River were to release 1/3 of its capacity into Cook Inlet in the event of a major eruption? Not to mention the possible loss of life at the terminal. It would be different than most other spills as the risk was a) known and b) avoidable and the defense they would pose??? It was not economically feasible to avoid and environmental catastrophe. In your opinion, would that be an acceptable defense?
As for cleanup after abandonment, I am sure the terminal could still be used as an emergency storage facility and could tie into the new pipeline. Any number of events could utilize the facility and warrant keeping it stand-by active.

beaverlooper
3198
Points
beaverlooper 12/08/12 - 06:07 pm
0
0
I'm not giving any kind of

I'm not giving any kind of opinion on whether the place should stay open or close,my point is companies don't like to spend money if they don't have to.
I will say Drift river terminal has been there for nearly 50 years during which time there have been at least 2 major eruptions. The engineered defenses have worked perfectly in that regard and there has been no loss of life or oil.$18.5 is a drop in the bucket compared to what it will cost to clean that place up.
If that loading platform isn't going to be used there's not really much point in keeping the facility there.It sits off by it's self ,20 miles away from Trading Bay with 15 or so miles of swampy wetlands (a major area for waterfowl) , 3 large rivers and many smaller salmon streams between there and the only place it ties into ,Trading bay. In my personal opinion the most likely environmental danger comes from that old pipeline which has been in bad shape for a long time and has a lot of sand and water running through it making it more suspect all the time. It crosses all those wetlands,rivers and streams,so there's still liability there.

Back to Top

Spotted

Please Note: You may have disabled JavaScript and/or CSS. Although this news content will be accessible, certain functionality is unavailable.

Skip to News

« back

next »

  • title http://spotted.peninsulaclarion.com/galleries/321268/ http://spotted.peninsulaclarion.com/galleries/321253/ http://spotted.peninsulaclarion.com/galleries/321248/
  • title http://spotted.peninsulaclarion.com/galleries/321243/ http://spotted.peninsulaclarion.com/galleries/321208/ http://spotted.peninsulaclarion.com/galleries/320593/
  • title http://spotted.peninsulaclarion.com/galleries/321173/ http://spotted.peninsulaclarion.com/galleries/321163/
My Gallery

CONTACT US

  • 150 Trading Bay Rd, Kenai, AK 99611
  • Switchboard: 907-283-7551
  • Circulation and Delivery: 907-283-3584
  • Newsroom Fax: 907-283-3299
  • Business Fax: 907-283-3299
  • Accounts Receivable: 907-335-1257
  • View the Staff Directory
  • or Send feedback

ADVERTISING

SUBSCRIBER SERVICES

SOCIAL NETWORKING

MORRIS ALASKA NEWS