# ALYESKA PIPELINE SERVICE CO — Safety Order

- **operation:** document
- **citation:** CPF 520115001S
- **title:** ALYESKA PIPELINE SERVICE CO — Safety Order
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2011-02-01
- **effective on:** Not available
- **summary:** CLOSED safety order.
- **machine formats:** - **json:** https://regulus.evalyn.ai/document/phmsa-enforcement-520115001s.json
- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-520115001s.md
- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-520115001s
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/520115001S
**body:**

Safety Order involving ALYESKA PIPELINE SERVICE CO. The dataset does not identify a cited regulation for this case. The case was opened on 2011-02-01 and is reported as closed as of 2018-05-03. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

520115001S_Closure Letter_05032018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520115001S/520115001S_Closure%20Letter_05032018.pdf

520115001S_Closure Letter_05032018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520115001S/520115001S_Closure%20Letter_05032018_text.pdf

520115001S_Consent Agreement_08172011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520115001S/520115001S_Consent%20Agreement_08172011.pdf

520115001S_Consent Agreement_08172011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520115001S/520115001S_Consent%20Agreement_08172011_text.pdf

520115001S_Consent Order_08172011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520115001S/520115001S_Consent%20Order_08172011.pdf

520115001S_Consent Order_08172011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520115001S/520115001S_Consent%20Order_08172011_text.pdf

520115001S_operator response and request for Informal Consultation_02152011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520115001S/520115001S_operator%20response%20and%20request%20for%20Informal%20Consultation_02152011.pdf

520115001S_proposed safety order_02012011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520115001S/520115001S_proposed%20safety%20order_02012011.pdf

520115001S_proposed safety order_02012011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520115001S/520115001S_proposed%20safety%20order_02012011_text.pdf

520115001S_proposed safety order_02012011_text.pdf

CERTIFIED MAIL - RETURN RECEIPT REQUESTED
February 1, 2011
Mr. Thomas Barrett
President
Alyeska Pipeline Service Company
900 E. Benson Blvd.
P.O. Box 196660
Anchorage, AK 99519
CPF 5-2011-5001S
Dear Mr. Barrett:
Enclosed is a Notice of Proposed Safety Order (Notice) issued in the above-referenced case. The
Notice proposes that Alyeska Pipeline Service Company (Alyeska) take certain measures with
respect to the Trans-Alaska Pipeline System to ensure pipeline safety and protection of the
environment. Your options for responding are set forth in the Notice. Your receipt of the Notice
constitutes service of that document under 49 C.F.R. § 190.5.
We look forward to a successful resolution to ensure pipeline safety. Please direct any questions
on this matter to Dennis Hinnah at 907-271-6517 or me at 720-963-3160.
Sincerely,
Chris Hoidal
Director, Western Region
Pipeline and Hazardous Materials Safety Administration
Enclosure: Notice of Proposed Safety Order
49 C.F.R. § 190.239
cc: Dennis Hinnah, Deputy Region Director, Western Region, PHMSA Office of
Pipeline Safety, 188 West Northern Lights Blvd., Suite 520, Anchorage, AK 99503



DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
____________________________________
In the Matter of )
Alyeska Pipeline Service Company, ) CPF No. 5-2011-5001S
)
)
)
Respondent )
____________________________________)
NOTICE OF PROPOSED SAFETY ORDER
Background and Purpose
Pursuant to Chapter 601 of title 49, United States Code, the Pipeline and Hazardous Materials Safety
Administration (PHMSA) has initiated an investigation of the safe operation of the Trans-Alaska
Pipeline System (TAPS), including the investigation of a pipeline leak at Pump Station 1 (PS-1) that
began on January 8, 2011. The TAPS is operated by Alyeska Pipeline Service Company (Alyeska)
and transports crude oil from the production fields in Prudhoe Bay, Alaska, to their marine transfer
facilities in Valdez, Alaska.
As a result of the investigation, it appears that multiple conditions exist on your pipeline facility that
pose a pipeline integrity risk to public safety, property or the environment. Pursuant to 49 U.S.C.
§ 60117(l), PHMSA issues this Notice of Proposed Safety Order, notifying you of the preliminary
findings of the investigation, and proposing that you take measures to ensure that the public,
property, and the environment are protected from the potential risk.
Preliminary Findings
• The affected pipeline is the 800-mile long, 48-inch diameter TAPS which transports crude oil
from PS-1 in Prudhoe Bay, Alaska, to the Valdez Marine Terminal in Valdez, Alaska. PS-1
receives crude oil from production oil fields on the North Slope of Alaska.
• The TAPS was constructed between 1975 and 1977, and began transport of oil on June 20,
1977. During that period, average daily oil throughput increased until it peaked at 2.033
million barrels per day (bpd) in 1988. At the end of December 2010, it was averaging



between 600,000 and 700,000 bpd, and averages a throughput decline of approximately 6%
per year.
• The reduced throughput has resulted in numerous integrity challenges that have not been
fully addressed by Alyeska’s operational and maintenance activities. Significant challenges
for TAPS future operations include decreasing crude oil temperatures, water freezing due to
these decreased temperatures, increased wax precipitation and deposition on the pipe wall,
slack line conditions at multiple locations, and changing oil composition. Two issues in
particular need to be addressed to ensure the long-term integrity of TAPS: water in the TAPS
stream and deposition of crude oil solids (i.e., wax) on the pipeline wall.
o The present pipeline specification allowing crude oil containing up to 0.35% Basic
Sediment and Water (BS&W) to enter TAPS is based on an average and does not
prevent free water and water slugs from entering the TAPS crude stream. This water
can create a corrosion-susceptible environment. During a TAPS shut down in
extreme cold temperatures, there is a risk of water accumulation in low points
freezing and creating ice plugs which could impede restart of TAPS and damage
valves, instrumentation, and other pipeline components. If flowing crude temperature
drops below freezing, ice crystals may form in the crude stream, potentially adversely
affecting equipment and instrumentation.
o At lower crude temperatures, increased wax precipitation from the crude stream
adheres to the pipeline wall creating a corrosion-conducive environment. Soft wax in
the crude stream clogs inline inspection tool (smart pig) sensors. Increased wax
from lower crude temperatures creates wax management issues during maintenance
pigging.
• There is a history of both internal and external corrosion problems on pipelines upstream of
PS-1. This has prompted replacement of several pipelines including the OT501 pipeline and
the Oil Transit line system transporting sales oil crude from Gathering Center 2 and Flow
Station 2 by the owner of those pipelines.
• In 2008, Alyeska identified several locations with internal corrosion, two locations with over
80% wall loss and three locations with over 50% wall loss, in the above ground piping in the
PS-1 Tank Farm that required mitigation. Alyeska installed full encirclement metal sleeves
to mitigate the wall loss. The locations that required sleeves are on piping that connects the
PS-1 tanks to the suction side of the booster pumps and the meter building.
• Significant changes have been implemented on the TAPS during the last 15 years to address
this reduced throughput, including taking Pump Stations 2, 6, 8, and 10, out of service (the
breakout storage tanks associated with these stations were also decommissioned) and placing
PS-7 and the tank at PS-12 on standby status.
• The U.S. Environmental Protection Agency notified the Director, Western Region, PHMSA
(Director), of the leak on Saturday, January 8, 2011. Shortly after this notification, Alyeska
reported the spill and subsequent shutdown of the pipeline system to PHMSA. Alyeska
reported the leak to the National Response Center (NRC) (incident report # 964075).
• The area around PS-1 has been deemed a High Consequence Area per 49 CFR Part 195.



• The leak appears to be located in the below-ground station piping and headers between the
PS-1 booster pumps and the mainline pumps. The pipe was manufactured and installed in
the 1970s and encased in concrete in the early 1990s.
• The leak occurred in piping connected to or in low-flow, dead leg piping. Such locations are
susceptible to corrosion because they cannot be cleaned with cleaning pigs and because
sediment accumulates and prevents corrosion inhibitors and biocides from reaching the pipe
wall. TAPS has other locations within PS-1 and other facilities where low flow and dead leg
piping exists. Dead legs in underground piping cannot be assessed by smart pigs (ILI) or
external ultrasonic transducer (UT) testing measurements.
• The failed pipe has not yet been excavated to determine the cause of the leak; however it is
believed to be the result of external or internal corrosion. Internal sampling of fluids and
internal pipe wall sediment and materials occurred on January 21, 2011, and testing is
underway by Alyeska contractors.
• After the leak was discovered, it took approximately ten (10) days for temporary above-
ground bypass piping at PS-1 to be constructed to allow TAPS to return to full service and to
seal off the leaking pipe. The bypass piping began service on January 17, 2011.
• The minimum pipeline oil temperature recorded at a TAPS pump station during the
shutdown as reported by Alyeska was 25.7 degrees Fahrenheit.
• Since this pipeline was encased in concrete, the exact leak site could not be easily identified
or be repaired before TAPS would need to be restarted due to the lack of sufficient storage at
PS-1 and the cold temperature conditions. To prevent potential freezing conditions on the
remaining portions of TAPS, which could have caused additional pipeline damage and leaks,
Alyeska operated the pipeline with containment and recovery from January 11, 2011, to
January 15, 2011, while repairs were ongoing.
• Alyeska has a Cold Restart Plan that was created as early as 2001 to address the possibility of
needing to restart the pipeline after a prolonged shutdown of TAPS during cold temperature
conditions. This plan was revised in December 2005 and further revised in December 2010.
Alyeska indicated that this Cold Restart Plan had never been used in operation or tested
under cold weather conditions. Alyeska did indicate that the equipment and piping was
deployed in 2006 during a response plan exercise according to the version of the Plan that
was in place at the time.
• During the leak at PS-1, Alyeska had difficultly implementing the latest version of the Cold
Restart procedures, partially due to the inability to quickly move equipment to the necessary
locations along the pipeline. In addition, the Cold Restart Plan required that certain
regulatory requirements be disregarded in order to be implemented.
• At the current flow rate through TAPS, Alyeska has two cleaning pigs in the pipeline at any
given time. A cleaning pig could cause a plug in the pipeline if the line is shut down and
there is a need to implement the Cold Restart Plan. Two scraper cleaning pigs were in transit
when the pipeline was shutdown as a result of the leak. One was near MP 424 and the other
was close to the southern end of TAPS. The only permanent pig receiver that could have



been used to remove the pigs from the pipeline was located at the Valdez Marine Terminal.
At the current average rate of 630,000 bpd, it takes approximately two weeks for a cleaning
pig to transverse the pipeline from PS-1 to Valdez. As throughput in TAPS changes, the
number of pigs in the pipeline at any given time may need to be increased.
• If tank storage at PS-1 reaches capacity when TAPS is shut down, production on the North
Slope must be halted, which can cause damage to the production facilities upstream from PS-
1. At the current approximate production rate of 630,000 bpd, tank storage at PS-1 is filled
to capacity in about half a day. If production is prorated to 5% of the current approximate
production rate of 630,000 bpd, tank storage at PS-1 is filled to capacity in about 10 days.
• To prevent tank storage at PS-1 from reaching full capacity, the North Slope production rate
was adjusted throughout the incident, based upon the changing situation, from the time the
leak was discovered on January 8, 2011, until the bypass was completed on January 17,
2011. Production was prorated to as low as 5% for several days.
• Based on these preliminary findings, the alleged risk conditions on TAPS that pose a pipeline
integrity risk are:
1) The loss of system integrity that resulted in a hazardous liquid leak at PS-1. The
location of the leak could not be assessed because it is not accessible by smart pigs
(ILI) or external UT measurements. Other buried station piping and buried deadlegs
exist on other portions of TAPS and they similarly cannot be assessed to ensure that
there are no pipe integrity threats.
2) The inability to capture or launch cleaning or inline inspection (ILI) devices at interim
locations between Pump Station 4 and Valdez Marine Terminal despite the fact that this
is where the coldest operating conditions exist and the potential for waxing and freezing
is higher than on other portions of TAPS.
3) The feasibility of and the time it takes to implement the Cold Restart Plan.
4) The lack of sufficient storage facilities at key locations along the pipeline, particularly
immediately upstream of PS1, causes integrity challenges during TAPS shutdowns or
lengthy production prorations and increases the risk of an additional release during cold
weather, thus making prompt response and repair essential.
Proposed Issuance of Safety Order
Section 60117(l) of Title 49, United States Code, provides for the issuance of a safety order, after
reasonable notice and the opportunity for a hearing, requiring corrective measures, which may
include physical inspection, testing, repair, or other action, as appropriate. The basis for making the
determination that a pipeline facility has a condition or conditions that pose a pipeline integrity risk
to public safety, property, or the environment is set forth both in the above-referenced statute and 49
C.F.R. § 190.239, a copy of which is enclosed.
After evaluating the foregoing preliminary findings of fact and considering the undetermined cause
of the pipeline leak, the age of the pipe involved, the method of construction, including encasement,
the inability of Alyeska to perform internal inspections or external UT measurements of piping, the
inability to capture or launch cleaning or ILI devices at interim locations, the feasibility of and the
time it takes to implement the Cold Restart Plan, the lack of sufficient storage facilities at PS-1 and
other key locations, the hazardous nature of the product transported, the pressure required for



transporting such product, the characteristics of the geographical areas where the pipeline facility is
located, and the likelihood that the conditions could worsen or develop on other areas of the pipeline
and potentially impact its serviceability, it appears that the continued operation of the affected
pipeline without corrective measures would pose a pipeline integrity risk to public safety, property,
or the environment.
Accordingly, PHMSA issues this Notice of Proposed Safety Order to notify Respondent of the
proposed issuance of a safety order and to propose that Respondent take measures specified herein to
address the potential risk.
Response to this Notice
In accordance with § 190.239, you have 30 days following receipt of this Notice to submit a written
response to the official who issued the Notice. If you do not respond within 30 days, this constitutes
a waiver of your right to contest this Notice and authorizes the Associate Administrator for Pipeline
Safety to find facts as alleged in this Notice without further notice to you and to issue a Safety Order.
In your response, you may notify that official that you intend to comply with the terms of the Notice
as proposed, or you may request that an informal consultation be scheduled. Informal consultation
provides you with the opportunity to explain the circumstances associated with the risk conditions
alleged in the notice and, as appropriate, to present a proposal for a work plan or other remedial
measures, without prejudice to your position in any subsequent hearing.
If you and PHMSA agree within 30 days of informal consultation on a plan and schedule for you to
address each identified risk condition, we may enter into a written consent agreement (PHMSA
would then issue an administrative consent order incorporating the terms of the agreement). If a
consent agreement is not reached, or if you have elected not to request informal consultation, you
may request an administrative hearing in writing within 30 days following receipt of the Notice or
within 10 days following the conclusion of an informal consultation that did not result in a consent
agreement, as applicable. Following a hearing, if the Associate Administrator finds the facility to
have a condition that poses a pipeline integrity risk to the public, property, or the environment in
accordance with § 190.239, the Associate Administrator may issue a safety order.
Be advised that all material you submit in response to this enforcement action is subject to being
made publicly available. If you believe that any portion of your responsive material qualifies for
confidential treatment under 5 U.S.C. 552(b), along with the complete original document you must
provide a second copy of the document with the portions you believe qualify for confidential
treatment redacted and an explanation of why you believe the redacted information qualifies for
confidential treatment under 5 U.S.C. 552(b).
In your correspondence on this matter, please refer to CPF 5-2011-5001S and for each document you
submit, please provide a copy in electronic format whenever possible.
Proposed Corrective Measures
Pursuant to 49 U.S.C. § 60117(l) and 49 C.F.R. § 190.239, PHMSA proposes to issue a safety order
to Alyeska requiring the following:



1. Submit to PHMSA by February 15, 2011, a written plan for a third-party investigation of the
leak site at PS-1 that will include conducting appropriate tests, analyses, and evaluations to
establish the probable cause of the leak. The Director must approve the selection of the third
party contractor. The investigation plan must include collecting samples of sediments,
deposits, bacteria, and preserving the pipe for forensic analysis. Ship any removed samples
and the removed pipe to a laboratory approved by PHMSA for analysis. Complete the work
required by this plan, including the third party analysis regarding leak cause, and provide the
results to PHMSA by July 1, 2011.
2. Replace any piping along TAPS that cannot be assessed using ILI tools or other assessment
technologies as approved by the Director which upon failure would interrupt the safe
operation of TAPS. The safe operation of TAPS requires that there be no extended shutdown
of TAPS that would put other portions of the pipeline at risk due to reduced flow or low
temperatures. Submit for approval by the Director a listing of such piping being replaced and
a written plan and timeline for replacement by June 15, 2011.
3. Submit an assessment of the need for additional permanent pig launchers and receivers,
taking into account the anticipated continued reduction in TAPS throughput. Submit for
approval by the Director a recommendation from a third-party regarding the need for
additional permanent pig launchers and receivers and a plan for installing the additional
recommended equipment by May 15, 2011.
4. Submit a written plan and proposed timeline for installing at least one additional permanent
pig launcher and permanent pig receiver between PS-5 and PS-10 for approval by May 15,
2011, and complete installation according to the approved timeline. This launcher and
receiver must be equipped to handle both routine maintenance pigs and ILI tools.
5. Perform a documented evaluation of the need for increased tank capacity at pump stations to
assist during prolonged outages and the implementation of a cold restart, submit this written
documented evaluation to PHMSA by September 30, 2011, and complete any identified
increase in tank capacity by September 30, 2012. Alyeska will use best efforts to perform
project actions, and obtain necessary regulatory approvals.
6. Pre-position all Cold Restart Equipment at the facility where it would need to be utilized,
according to the company’s current version of the Cold Restart Plan, immediately. The cold
restart equipment should be assembled and protected so that the time to implement cold
restart is minimized.
a. Apply for the applicable regulatory permits and request expedited consideration by
March 15, 2011.
b. Demonstrate to the Director that all equipment is configured onsite and Cold Restart
can be implemented in less than 72 hours within 7 days of receipt of regulatory
permits.
7. Submit to PHMSA a revised “Cold Restart Plan” to address the possibility of a prolonged
shutdown of the pipeline by July 15, 2011.
a. Utilize lessons learned and data collected during the January 2011 incident and any
other research or lessons learned to date to support revisions to the Cold Restart plan.



b. Ensure that all key pressure transducers at Remote Gate Valves 36, 65, 98, and 121
remain functioning at all times, including during freezing conditions and restricted or
reduced flow.
c. Pre-position all cold restart equipment according to the revised Cold Restart Plan and
provide predesignated flange connection points for all cold restart equipment by
October 31 of each year. This equipment and connection points are to remain in
place through May 1 of the following year.
d. Conduct an engineering review of all restart components to ensure they meet the
PHMSA pipeline safety regulations. Submit this engineering review to PHMSA for
review by August 1, 2011.
8. Demonstrate to the Director the implementation and operational status of the revised Cold
Restart Plan equipment, but not the engines, by August 31, 2011. Tying the engines into the
Cold Restart equipment and demonstrating their operational status will occur within 7 days
of receipt of regulatory permits.
9. Submit quarterly reports to the Director and Deputy Region Director that: (1) include
available data and results of the testing and evaluations required by the safety order; and (2)
describe the progress of the repairs and other remedial actions being undertaken to comply
with the safety order.
10. The Director or Deputy Region Director may grant an extension of time for compliance with
any of the terms of the safety order upon a written request timely submitted demonstrating
good cause for an extension.
11. Respondent may appeal any decision of the Director or Deputy Region Director to the
Associate Administrator for Pipeline Safety. Decisions of the Associate Administrator shall
be final.
12. It is requested that Alyeska maintain documentation of the safety improvement costs
associated with fulfilling this Safety Order and report such costs in its quarterly reports as
required in item 8. It is requested that these costs be reported in two categories:
a. Total cost associated with preparation/revision of plans, procedures, studies, and
analyses, and
b. Total cost associated with replacements, additions, and other changes to pipeline
infrastructure.
13. Submit information, reports, and notifications required by this safety order to:
a. Director, Western Region, PHMSA Office of Pipeline Safety, 12300 West Dakota
Avenue, Suite 110, Lakewood, CO 80228, and
b. Deputy Region Director, Western Region, PHMSA Office of Pipeline Safety, 188
West Northern Lights Blvd., Suite 520, Anchorage, AK 99503.
The actions proposed by this Notice of Proposed Safety Order are in addition to and do not waive
any requirements that apply to Respondent’s pipeline system under 49 C.F.R. Parts 190 through 199,
under any other order issued to Respondent under authority of 49 U.S.C. § 60101 et seq., or under
any other provision of Federal or state law.



After receiving and analyzing additional data in the course of this proceeding and implementation of
the work plan, PHMSA may identify other safety measures that need to be taken. In that event,
Respondent will be notified of any proposed additional measures and, if necessary, amendments to
the work plan or safety order.
___________________________________ __________________
Chris Hoidal Date issued
Director, Western Region
Pipeline and Hazardous Materials Safety Administration

520115001S_Closure Letter_05032018_text.pdf

CERTIFIED MAIL - RETURN RECEIPT REQUESTED
May 3, 2018
Mr. Rod Hanson
Senior Vice President, Operations and Maintenance
Alyeska Pipeline Service Company
3700 Centerpoint Drive
Anchorage, Alaska 99503
CPF 5-2011-5001S
Closure Letter
Dear Mr. Hanson:
On August 17, 2011, the Pipeline and Hazardous Materials Safety Administration (PHMSA)
issued to Alyeska Pipeline Service Company (Alyeska) a Consent Order (Order) in the above-
referenced case. The Order approved and incorporated by reference a Consent Agreement
(Agreement), signed on August 12, 2011, and dated August 17, 2011. Based on our review of
documentation you provided and confirmation of work you have accomplished under the
Agreement, it has been determined that you have complied with the terms of the Order.
On January 8, 2011, a hazardous liquid leak was discovered at Alyeska’s Pump Station 1
facility, a part of the Trans Alaska Pipeline System. As a result of the hazardous liquid leak,
PHMSA issued a Notice of Proposed Safety Order (Notice) to the operator on February 1,
2011. The Notice alleged multiple conditions existing on TAPS that would, without
corrective measures, pose a pipeline integrity risk to public safety, property, or the
environment. In response to the Notice, pursuant to 49 CFR 190.239(b)(2), Alyeska
requested informal consultation. PHMSA and Alyeska engaged in good faith discussions
regarding the Notice and agreed to enter into the above-mentioned August 17, 2011 Consent
Agreement to resolve the Notice without further administrative proceedings or litigation.
Since January 2011, work progressed across TAPS to address pipeline integrity risks by
performing actions identified in Section II of the Agreement (Work to be performed). Plans
required by Section II were revised as new information was received in accordance with
Paragraph 11 of the Agreement. Work performed and revisions in plans and schedules have
been found to be acceptable by PHMSA and appear to be complete.



This case is now closed and no further action is contemplated with respect to the matters
involved in this case.
Thank you for your cooperation in this matter.
Sincerely,
Kim West
Director, Western Region
Pipeline and Hazardous Materials Safety Administration
cc: PHP-Compliance Registry
PHP-500 Adelheid Marlowe / Robert Guisinger (#138252)

520115001S_Consent Order_08172011_text.pdf

AUG 17 2011
Mr. Michael W. Joynor
Senior Vice President of Operations
Alyeska Pipeline Service Company
900 E. Benson Blvd.
P.O. Box 196660
Anchorage, AK 99519
Re: CPF No. 5-2011-5001S
Dear Mr. Joynor:
Enclosed please find a Consent Order incorporating the terms of the Consent Agreement that you
signed on August 12, 2011. Service of the Consent Order and Consent Agreement by certified
mail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R.
§ 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Jeffrey D. Wiese
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. Alan Mayberry, Deputy Associate Administrator for Field Operations, Pipeline Safety
Mr. Chris Hoidal, Director, Western Region, PHMSA
Mr. Dennis Hinnah, Deputy Director, Western Region, PHMSA
CERTIFIED MAIL - RETURN RECEIPT REQUESTED [7005 1160 0001 0070 4183]



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
)
In the Matter of )
)
Alyeska Pipeline Service Company, ) CPF No. 5-2011-5001S
)
Respondent. )
____________________________________)
CONSENT ORDER
By letter dated February 1, 2011, the Pipeline and Hazardous Materials Safety Administration
(PHMSA) Office of Pipeline Safety issued a Notice of Proposed Safety Order (Notice) to
Alyeska Pipeline Service Company (Respondent) in this case.
In accordance with 49 C.F.R. § 190.239, the Notice alleged that multiple conditions exist on the
Trans-Alaska Pipeline System (TAPS) that, without corrective measures, would pose a pipeline
integrity risk to public safety, property, or the environment. Specifically, the Notice alleged that
such conditions caused a loss of system integrity and a hazardous liquid leak that began on
January 8, 2011, at the company’s Pump Station 1 facility, demonstrating the presence of
integrity risks on TAPS.
In response to the Notice, Respondent requested an informal consultation. Respondent and
PHMSA engaged in good-faith settlement discussions resulting in the Consent Agreement,
attached to this Order, that settles all of the allegations in the Notice.
Accordingly, the foregoing Consent Agreement is hereby approved and incorporated by
reference into this Order. The Respondent is hereby ordered to comply with the terms of the
Consent Agreement, effective immediately.
Pursuant to 49 U.S.C. 60101 et seq. and 49 C.F.R § 190.221, failure to comply with this Consent
Order may result in the assessment of civil penalties of up to $100,000 per violation per day, or
in the referral of the case for judicial enforcement. The terms and conditions of this Consent
Order are effective upon service in accordance with 49 C.F.R. § 190.5.
___________________________________ __________________________
Jeffrey D. Wiese Date Issued
Associate Administrator
for Pipeline Safety

520115001S_Consent Agreement_08172011_text.pdf

AUG 17 2011
U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, DC 20590
____________________________________
In the Matter of )
Alyeska Pipeline Service Company, ) CPF No. 5-2011-5001S
)
)
)
Respondent. )
____________________________________)
CONSENT AGREEMENT
On February 1, 2011, the Pipeline and Hazardous Materials Safety Administration (PHMSA),
Office of Pipeline Safety (OPS), issued a Notice of Proposed Safety Order (Notice) to Alyeska
Pipeline Service Company (Alyeska or Respondent). Alyeska operates a transmission pipeline
known as the Trans-Alaska Pipeline System (TAPS) that transports crude oil from production
fields in Prudhoe Bay, Alaska, to the company’s marine transfer facilities in Valdez, Alaska.
The Notice alleged that multiple conditions exist on TAPS that, without corrective measures,
would pose a pipeline integrity risk to public safety, property, or the environment. Specifically,
the Notice alleged that such conditions caused a loss of system integrity and a hazardous liquid
leak that began on January 8, 2011, at the company’s Pump Station 1 facility, demonstrating the
presence of integrity risks on TAPS.
On February 15, 2011, pursuant to 49 C.F.R. § 190.239(b)(2), Alyeska submitted a request for
informal consultation in response to the Notice. On February 17, 2011, a meeting was held in
Lakewood, Colorado, to begin the process, which has continued to date. Alyeska and PHMSA
(Parties) have engaged in good-faith discussions regarding the Notice and have agreed that
settlement of this proceeding will avoid further administrative proceedings or litigation and that
entry of this Consent Agreement (Agreement) is the most appropriate means of resolving the
Notice without adjudication of any issue of fact or law. While Alyeska disputes some of the
Preliminary Findings in the Notice, the Parties agree that the Preliminary Findings in the Notice
will be used to construe the terms of this Consent Agreement. The Parties agree as follows:
I. General Provisions
1. Alyeska acknowledges, as operator of TAPS, that Alyeska and its pipeline system are
subject to the jurisdiction of the Federal pipeline safety laws, 49 U.S.C. §§ 60101, et seq., and
the regulations and administrative orders issued thereunder. For purposes of this Agreement,
Alyeska acknowledges that it received proper notice of PHMSA’s action in this proceeding and
that the Notice states claims upon which relief may be granted pursuant to 49 U.S.C. §§ 60101,
et seq., and the regulations and orders issued thereunder.



2. Alyeska agrees, for purposes of this Agreement, to address the integrity risks identified in
the Notice by completing the actions specified in Section II of this Agreement (Work to be
Performed). These actions, including any work plans and schedules, shall automatically be
incorporated into this Agreement upon approval by PHMSA. This Agreement does not
constitute a finding of violation of any Federal law or regulation and may not be used in any civil
proceeding of any kind as evidence or proof of any fact, fault or liability, or as evidence of the
violation of any law, rule, regulation or requirement, except in a proceeding to enforce the
provisions of this Agreement.
3. After Alyeska returns a signed original of this Agreement, PHMSA’s representative will
present it to the Associate Administrator for Pipeline Safety (Associate Administrator),
recommending that he adopt the terms of this Agreement by issuing an administrative order
(Consent Order) incorporating the terms of this Agreement. The terms of this Agreement
constitute an offer of settlement until accepted by Alyeska and the Associate Administrator.
Upon the date on which this Consent Order is issued, any request for a hearing submitted by
Alyeska shall be automatically withdrawn.
4. Alyeska consents to the issuance of the Consent Order, and hereby waives any further
procedural requirements with respect to its issuance. Alyeska waives all rights to contest the
adequacy of notice, or the validity of the Consent Order or this Agreement, including all rights to
administrative or judicial hearings or appeals.
5. This Agreement shall apply to and be binding upon PHMSA and its successors and upon
Alyeska, its officers, directors, and employees, and its successors, assigns, owners, or other
entities or persons otherwise bound by law. Alyeska agrees to provide a copy of this Agreement
and any incorporated work plans and schedules to all of Alyeska’s officers, employees, owners
and agents whose duties might reasonably include compliance with this Agreement.
6. All references to “Director” in this Consent Agreement shall refer to the persons named
below. Approval from either of the persons named below will satisfy any requirement for
approval by the Director. Information, reports, and notifications required by this Agreement
shall be submitted to the following persons:
a. Director, Western Region, PHMSA Office of Pipeline Safety, 12300 West Dakota
Avenue, Suite 110, Lakewood, CO 80228; and
b. Deputy Director, Western Region, PHMSA Office of Pipeline Safety, 188 West
Northern Lights Blvd., Suite 520, Anchorage, AK 99503.
7. For all transfers of ownership interests or operating responsibility of TAPS, Alyeska shall
provide a copy of this Agreement to the prospective transferee at least 30 days prior to such
transfer and simultaneously provide written notice of the prospective transfer to the Director.
8. Nothing in this Agreement affects or relieves Alyeska of its responsibility to comply with
all applicable requirements of the Federal pipeline safety laws, 49 U.S.C. §§ 60101, et seq., and
2



the regulations and orders issued thereunder. Nothing in this Agreement alters PHMSA’s right
of access, entry, inspection, and information gathering or its authority to bring enforcement
actions against Alyeska pursuant to the Federal pipeline safety laws, the regulations and orders
issued thereunder, or any other provision of Federal or State law.
9. This Agreement does not waive or modify any Federal, State, or local laws or regulations
that are applicable to Alyeska’s pipeline systems. This Agreement is not a permit, or a
modification of any permit, under any Federal, State, or local laws or regulations. Alyeska
remains responsible for achieving and maintaining compliance with all applicable Federal, State,
and local laws, regulations and permits.
10. This Agreement does not create rights in, or grant any cause of action to, any third
person not a party to this Agreement. The U.S. Department of Transportation (DOT) is not
liable for any injuries or damages to persons or property arising from acts or omissions of
Alyeska or its officers, employees, or agents carrying out the work required by this Agreement.
Alyeska agrees to indemnify and hold harmless DOT, its agencies, officers, employees, agents,
and representatives from any and all causes of action arising from any acts or omissions of
Alyeska or its contractors in carrying out the work required by this Agreement.
II. Work to be Performed
11. Alyeska agrees to perform all actions set forth below in paragraphs 12-21. The plans
required below shall be revised as necessary to incorporate new information obtained during the
evaluations and remedial activities performed under the plans. Alyeska will submit any such
plan revisions to the Director for prior approval, who may approve plan elements incrementally.
12. On February 15, 2011, Alyeska submitted to PHMSA a written plan for a third-party
investigation of the leak site at PS-1 that included conducting appropriate tests, analyses, and
evaluations to establish the probable cause of the leak. The Director approved the selection of
the third-party contractor by letter dated February 22, 2011. The investigation plan called for
collection of samples of sediments, deposits, bacteria, and preservation of the pipe for forensic
analysis, the shipment of any removed samples and pipe to a laboratory approved by PHMSA for
analysis, and a third-party analysis regarding leak cause. Alyeska agreed to complete the work
required by this investigation plan and to provide the results to PHMSA by July 15, 2011.
Alyeska submitted Government Letter #23939 on July 15, 2011, and the submission is currently
being reviewed by the Director.
13. Alyeska will replace or remove any hazardous liquid piping along TAPS which cannot
be assessed using in-line inspection tools (or other suitable assessment methods approved by the
Director) and which would compromise the safe operation of TAPS upon failure. The Director
will approve assessment methods that provide an assessment of 100% of the length and
circumference of the pipeline and that are capable of detecting internal and external corrosion
features and other damage and determining the percentage metal loss, areal extent, and geometry
of any damage. Alyeska performed a documented evaluation to determine the piping to be
replaced. Alyeska agreed to submit a listing of such piping being replaced or removed and a
written plan and timeline for replacement by July 15, 2011, to the Director for approval.3



Alyeska submitted Government Letter #23939 on July 15, 2011, and the submission is currently
being reviewed by the Director.
14. The Low Flow Study Team is an independent team composed of external consultants
and Alyeska engineers that recently produced a report on the impacts of reduced throughput on
TAPS. On June 15, 2011, Alyeska submitted to the Director the Low Flow Study Team’s
assessment of the need for additional permanent pig launchers and receivers. This report takes
into account the anticipated continued reduction in TAPS throughput and includes a
recommendati
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