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Hilcorp Gas Leak in Cook Inlet

Posted by Bob Shavelson at Mar 08, 2017 05:55 PM |
Hilcorp Alaska gas pipeline leak in Cook Inlet, Alaska. Methane pollution. Beluga whales. Endangered species. Jeff Hildebrand.
Hilcorp Gas Leak in Cook Inlet

Hilcorp CEO Jeff Hildebrand after a tough game of polo. He's worth more than $4 billion but Hilcorp continues to violate state and federal laws.

UPDATED March 9, 2017

See Timeline Below

Background:

On February 8, Alaskans learned Texas-based Hilcorp Alaska had “discovered” a large leak from a natural gas fuel line supplying power to platforms on Middle Ground Shoal in Cook Inlet.  Several weeks later, we learned Hilcorp knew – or should have known – about the leak months earlier, in December 2016 or earlier.

While ongoing pollution and lax environment enforcement remain unsettling concerns as the weeks pass by, perhaps the most glaring issue is Hilcorp’s inability to control a leaking pipeline in Alaska’s renowned winter conditions.  If Hilcorp cannot or will not stop polluting our public resources, then it should have no right to operate in our waters in the first place.

Hilcorp has put forth various excuses why it cannot shut down the leaking pipeline in Cook Inlet’s icy conditions– including that water would infiltrate the gas line and other reasons – but the fact remains Hilcorp simply wants to maintain production and profits without interruption.

“Hilcorp’s obligation right now must be to Cook Inlet, not to continued profits,” said Inletkeeper Bob Shavelson. “Hilcorp has reaped sizable tax credits and enjoyed considerable profits during a time of fiscal crisis in Alaska, and it has a responsibility to do the right thing and shut-down the pipeline until it can operate safely without polluting Cook Inlet.”

Hilcorp's CEO Jeff Hildebrand is reportedly worth more than $4.2 BILLION (as of March 9, 2017), and Hilcorp’s business philosophy is to buy-up aging oil fields and wring out any remaining profits. That means cutting corners and not investing in antiquated pipelines and other infrastructure. The Alaska Oil & Gas Conservation Commission has cited Hilcorp for over two dozen violations since 2012, including a 2015 violation that nearly killed 3 workers, and has gone so far as to say “[t]he disregard for regulatory compliance is endemic to Hilcorp’s approach to its Alaska operations….”

In addition to worker safety violations, Hilcorp annually dumps more than 2 billion gallons of toxic produced water into Cook Inlet fisheries each year from its Trading Bay facility under a loophole in the Clean Water Act, and in August 2016, it reported a “14 gallon crude spill” at its Drift River facility which has blossomed into a much larger – thought still unknown – spill volume.

And of course, Hilcorp’s ongoing pollution lies in the heart of some of the most important habitat for the endangered Cook Inlet beluga whale and its prey species.

ADEC is periodically updating its spill response “Situation Reports” online.

Inletkeeper obtained a video of Hilcorp’s illegal natural gas discharge taken on or about February 8, 2017.  Since that time, Hilcorp has apparently reduced flow through the gas line, but considerable discharges from the leaking pipeline continue. In response, the FAA closed all airspace over the leaking pipe except to Hilcorp and its contractors.

Abbreviated Timeline:

February 10, 2017: Inletkeeper wrote to ADEC calling for an immediate shut-down on Hilcorp’s leaking gas line.

February 10, 2017: ADEC issued a “State Interest Letter,” which defined methane as “hazardous substance” under state law due to its known detrimental impacts to aquatic species and fish,  and which notes the discharge of a hazardous substance is illegal unless authorized by ADEC.  The letter fails, however, to require Hilcorp to stop the illegal discharge.

February 15, 2017: ADEC responded to Inletkeeper’s letter, promising to keep information pathways open but refusing to take stronger enforcement action against Hilcorp.

February 15, 2017: Inletkeeper sent Hilcorp a Notice of Intent to Sue under the federal Clean Water Act for illegal discharges to Cook Inlet which threaten water quality, fish and Beluga whales. Inletkeeper’s Notice of Intent to Sue is meant to provide a back-stop in the event Hilcorp opts to continue to put profits over fish, wildlife and water quality in Cook Inlet, and to press Hilcorp to address the larger issue of relying on antiquated infrastructure as part of its Cook Inlet business model.

February 20, 2017: Hilcorp responds to ADEC’s February 10 letter, and says: it discovered the leak on February 7 (later contradicted by PHMSA March 3, 2017 letter, below); it cannot shut-in the pipeline due to (unsubstantiated) risks of spills and pipes freezing; concedes it is doing nothing to monitor and sample around the leak other than conduct fly overs; presents modeling scenarios of methane dilution that are fanciful and not grounded in the realities of chemistry or oceanography; holds up studies for the Georgia Straits pipeline project which controvert Hilcorp’s position and actually reveal the deleterious effects of methane on marine life; falsely states Beluga whales tend to avoid ice.

February 24, 2017: ADEC Notice of Violation to Hilcorp, stating it continues to "unlawfully fail to comply" with a variety of state laws and rules regarding hazardous substances, and water and air pollution.  ADEC ordered Hilcorp to respond by March 1 with a comprehensive plan to "mitigate" the discharge of methane into Cook Inlet.

February 24, 2017: The National Marine Fisheries Service sent a letter to the Pipeline & Hazardous Materials Safety Administration, which: identifies methane as an “asphyxiant  toxicant” (displaces air), but recognizes no sampling has occurred to identify impacts; states that Cook Inlet Beluga whales are expected to be present in the vicinity of the pollution discharge, “especially at this time of year” (with maps showing tagged whales in years past transiting over and around the location of Hilcorp’s leaking pipe).  Then, NMFS states, in a classic double negative: “NMFS is not aware of any evidence that this ongoing gas release is not negatively impacting marine species in Cook Inlet.” Despite strong federal laws to protect the endangered Cook Inlet Beluga whale, NMFS makes no effort to press Hilcorp to stop polluting the critical habitat area.

February 27, 2017: ADEC responds to Hilcorp’s February 20 letter, and calls for Hilcorp to implement a sampling and monitoring plan by March 8, and plans to shut-in the pipeline by March 13.

March 1, 2017: Hilcorp responds to ADEC's Notice of Violation with leak repair plans and a dive plan, saying it cannot address the leak until ice clears sometime in mid-to-late March or afterward.

March 3, 2017:  PHMSA, the federal agency with lead jurisdiction over the leaking gas line, finally sends a Notice of Proposed Safety Order to Hilcorp, which: suggests Hilcorp knew or should have known about the gas leak prior to Feb. 7; recognizes significant concerns from state and federal regulators; relies on Hilcorp’s unsupported assertions to find a crude spill could occur if the gas pipeline is shut-in;  states that the very same pipeline leaked twice in 2014; ordering a permanent repair of the leaking section by May 1, 2017; and requires various other inspections and actions contingent on the issuance of a final safety order, the date of which is highly uncertain due to the potential for Hilcorp appeals or challenges.