Hilcorp's recent announcement that it plans to reopen the Drift River oil storage facility comes with concerns about operating a tank farm in an environmentally sensitive area that also happens to be at the foot of an active volcano.
They are legitimate concerns, as was evidenced in 2009 when the facility was shut down due to mudflows from Mount Redoubt's eruption. However, while there was some flooding and damage to other parts of the facility, containment measures at the time proved adequate to prevent flooding, damage or spills in the tank farm.
Following the 2009 eruptions, Drift River was mothballed and oil production never ramped back up to pre-eruption levels.
But there are a number of new players in the inlet, including Hilcorp, which bought Chevron's assets in the region. They're all interested in increasing production, and Drift River's tank farm is an important component in making that happen. Indeed, Hilcorp has determined that utilizing two of the facility's seven tanks is the only viable way to meet its goal of doubling production from the inlet.
The facility's primary defense against volcanic mudflows and flooding coming down the Drift River Valley is a 20-foot protective dike surrounding the tank farm. Because of sediment built up from the 2009 mudflows, Hilcorp intends to raise the dike another 15 feet.
State regulators also have a number of other items for Hilcorp to address, including a revised oil discharge prevention and contingency plan, re-inspection of the tanks and an in-depth volcano response plan.
The entire region is prone to earthquakes, floods and other forces of nature. And Mount Redoubt is just one of four active volcanoes on the west side of the inlet.
The fact of the matter is, that's where the infrastructure is located. We've been hoping for an increase in oil production for years, and utilizing a key piece of infrastructure is the most reasonable way to do it. What's more, not using Drift River's storage capacity comes with its own risks, including doubling the amount of tanker traffic.
Balancing exploration and development with environmental concerns in Cook Inlet is no easy task. The inlet supports a wide range of sea life, including some of the most productive salmon runs in the world. Industry and regulators must be constantly vigilant to ensure those resources are not put at risk. There is no place for complacency when it comes to transporting oil in Cook Inlet.
We are optimistic Hilcorp, as well other inlet explorers and producers, take that responsibility seriously. Under the best of conditions, Cook Inlet is a challenging environment in which to operate.