OIL: A Pipeline To Nowhere?

The great Alaska pipeline appears to be jinxed. In its first month of operation, the $10 billion project has been beset by both mechanical breakdowns and an embarrassing dispute over what to do with the oil when it begins pouring out of the 800-mile line.

In a 28-day period, the line has suffered five physical mishaps, three of which caused shutdowns lasting a total of 13 days. The latest accident occurred last week when an earthmover burying part of the 48-in. pipeline struck a valve. That set off a gusher that spewed hot black goo over 15 acres of surrounding tundra and two ponds before technicians could shut down the line and begin repairs. As it happened, the line had just resumed limited operation after a ten-day shutdown caused by the most serious of its start-up accidents. At Pumping Station 8, 38 miles from Fairbanks, a pipeline leak led to an explosion that killed one worker and injured five others. Interior Department officials last week concluded that poor training and a mixed-up chain of command were the causes of the PS 8 tragedy. Said an investigator: "Three or four people did some really dumb things."

The Alyeska Pipeline Service Co., a consortium of eight oil companies, hopes to rebuild the station by mid-September, after which cold weather will make repairs virtually impossible. Otherwise, it would have to delay for another ten months the goal of increasing the pipeline's flow to its initial capacity of 1.2 million bbl. per day. That could cause financial problems for the state of Alaska; it has been counting on taxes from the pipeline, which are determined by the amount of oil actually moved, to finance 60% of its $1 billion current budget.

But the biggest problem looming over the project is what to do with the oil when it begins pouring into storage tanks at the Alaskan port of Valdez. The first tankers loaded with the oil are due to be on their way to Long Beach, Calif., by the end of August. About 30% of the oil is to be transshipped to refineries on the West Coast. Standard Oil Co. of Ohio (Sohio), which is owned by British Petroleum, wants to pump the rest of the oil, which is not needed in the Pacific Coast area, to refineries in Texas through an existing natural-gas pipeline that would be modified for the purpose.

Opponents of the Long Beach plan, including California Governor Jerry Brown, say the pipeline that Sohio wants to use is needed to bring in natural gas from Mexico. They also protest that the use of Long Beach as a transfer terminal for Alaskan oil would add to the already bad air and water pollution problem in the Los Angeles basin. Although no refining will take place in the area, critics of the Long Beach plan say that just shipping the oil through there will add to pollution: tankers continually emit fumes, sometimes spill oil, and will inevitably have accidents.

Citing Sohio's own figures, the California Air Resources Board says that even under "best case" circumstances, the Long Beach operation would add to the air about 1,140 lbs. of emissions per day—the equivalent of the exhaust from 38,000 cars. The "most probable" forecast is even darker: nearly 81,000 lbs. of added emissions per day, equivalent to the exhaust from 2.7 million autos.