Legislature(2017 - 2018)BARNES 124

05/12/2017 01:00 PM RESOURCES

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01:04:30 PM Start
01:06:20 PM Presentation: Oil & Gas Well & Pipeline Safety
02:16:36 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: Oil & Gas Well & Pipeline Safety TELECONFERENCED
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
**Streamed live on AKL.tv**
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                          May 12, 2017                                                                                          
                           1:04 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Andy Josephson, Co-Chair                                                                                         
Representative Geran Tarr, Co-Chair                                                                                             
Representative Dean Westlake, Vice Chair                                                                                        
Representative Harriet Drummond                                                                                                 
Representative Justin Parish                                                                                                    
Representative Chris Birch                                                                                                      
Representative DeLena Johnson                                                                                                   
Representative George Rauscher                                                                                                  
Representative David Talerico                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mike Chenault (alternate)                                                                                        
Representative Chris Tuck (alternate)                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION: OIL & GAS WELL & PIPELINE SAFETY                                                                                  
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
KRISTIN RYAN, Director                                                                                                          
Division of Spill Prevention & Response                                                                                         
Department of Environmental Conservation                                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Provided an update on recent pipeline                                                                    
spills and answered questions.                                                                                                  
                                                                                                                                
FRANK RICHARDS, PE, Senior Vice President, Program Management                                                                   
Alaska Gasline Development Corporation                                                                                          
Department of Commerce, Community & Economic Development                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Provided information related  to the Alaska                                                             
Gasline  Development  Corporation's   ongoing  work  on  pipeline                                                               
design.                                                                                                                         
                                                                                                                                
KEITH MEYER, PhD, Pipeline Engineering Manager                                                                                  
Alaska Gasline Development Corporation                                                                                          
Department of Commerce, Community & Economic Development                                                                        
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:   Provided information  related to  pipeline                                                             
safety and response.                                                                                                            
                                                                                                                                
GENE THERRIAULT, Director, Government Relations                                                                                 
Alaska Gasline Development Corporation; Team Lead                                                                               
Interior Energy Project                                                                                                         
Alaska Industrial Development and Export Authority                                                                              
Department of Commerce, Community & Economic Development                                                                        
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:   Provided  information  on future  business                                                             
opportunities for the Alaska Gasline Development Corporation.                                                                   
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:04:30 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  GERAN   TARR  called   the  House   Resources  Standing                                                             
Committee meeting  to order at  1:04 p.m.   Representatives Tarr,                                                               
Parish, Talerico, Westlake, Drummond,  and Josephson were present                                                               
at  the call  to  order.   Representatives  Rauscher, Birch,  and                                                               
Johnson arrived as the meeting was in progress.                                                                                 
                                                                                                                                
^PRESENTATION: OIL & GAS WELL & PIPELINE SAFETY                                                                                 
         PRESENTATION: OIL & GAS WELL & PIPELINE SAFETY                                                                     
                                                                                                                              
1:06:20 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR announced that the  only order of business would be                                                               
a presentation  detailing oil and  gas well and  pipeline safety,                                                               
which was requested by Representative Parish.                                                                                   
                                                                                                                                
1:06:39 PM                                                                                                                    
                                                                                                                                
KRISTIN RYAN, director, Division  of Spill Prevention & Response,                                                               
Department of Environmental  Conservation (DEC), provided updated                                                               
information on recent pipeline spills  reported by Hilcorp Alaska                                                               
(Hilcorp) and BP.   In Cook Inlet, three  incidents were reported                                                               
by Hilcorp.   The first was a natural gas  pipeline that ruptured                                                               
and leaked  natural gas into  Cook Inlet at  a depth of  about 75                                                               
feet for  several weeks; the  pipeline has now been  repaired and                                                               
the cause  of the rupture was  found to be scouring  of the ocean                                                               
floor as  a section of the  pipeline rubbed on the  subsurface of                                                               
the ocean.   Before the repair, the amount of  gas flowing in the                                                               
pipeline  was  reduced by  one-half,  and  now the  pipeline  and                                                               
affected  platforms  are in  operation  at  full capacity.    The                                                               
second  release  of  oil  was   believed  to  be  in  a  pipeline                                                               
connecting the  Anna platform to  the Bruce platform on  the west                                                               
side of Cook  Inlet.  However, DEC has concluded  a large boulder                                                               
hit the legs  of the Anna platform and oil  condensate burning in                                                               
a flare mechanism was released  into the environment and observed                                                               
as  sheen.   Hilcorp drained  the  feeder tube  connected to  the                                                               
flare and provided evidence that  three gallons of oil condensate                                                               
were  released  into the  environment.    After approval  by  the                                                               
Pipeline and  Hazardous Materials Safety  Administration (PHMSA),                                                               
U.S. Department of Transportation,  and DEC, Hilcorp reopened the                                                               
pipeline in the presence of PHMSA,  DEC, and the U.S. Coast Guard                                                               
(USCG) without  further incident.   The third leak in  Cook Inlet                                                               
was an anomaly in a  natural gas pipeline within the jurisdiction                                                               
of  PHMSA, and  she said  she had  no further  information except                                                               
that the problem has been resolved.                                                                                             
                                                                                                                                
1:11:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PARISH asked  for  the approximate  dates of  the                                                               
first incident in Cook Inlet.                                                                                                   
                                                                                                                                
MS. RYAN  said the leak  continued from December [2016]  to April                                                               
[2017] and offered to provide the specific dates.                                                                               
                                                                                                                                
REPRESENTATIVE PARISH  related Hilcorp  stated the leak  ended in                                                               
the second week of April, and  inquired as to how many cubic feet                                                               
of natural gas were wasted.                                                                                                     
                                                                                                                                
MS. RYAN said she would provide that information.                                                                               
                                                                                                                                
REPRESENTATIVE  PARISH  said  Hilcorp  estimated  a  loss  of  26                                                               
million [cubic feet  of natural gas], and inquired as  to the age                                                               
of the pipelines.                                                                                                               
                                                                                                                                
MS.  RYAN advised  the original  infrastructure was  installed in                                                               
the early  '60s; however,  there have  been upgrades  and changes                                                               
made to the  pipelines, so she was unsure of  the age of specific                                                               
areas of the pipelines.                                                                                                         
                                                                                                                                
REPRESENTATIVE  PARISH  asked  Ms.   Ryan  if  her  division  had                                                               
accurate information on which sections  of pipeline are original,                                                               
which have been replaced, and when.                                                                                             
                                                                                                                                
MS. RYAN said  no.  Her division has an  assessment and inventory                                                               
underway  in  conjunction with  PHMSA,  the  Cook Inlet  Regional                                                               
Citizens Advisory  Council, and  certain other state  and federal                                                               
agencies "to  get a better  picture of the infrastructure  from a                                                               
holistic perspective  ...."   Companies provide  information when                                                               
contingency plans are submitted to  DEC for approval that include                                                               
preventing spills  and their capacity  to respond if  one occurs,                                                               
but  the plans  do  not provide  details related  to  the age  of                                                               
pipelines.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  PARISH asked  for the  anticipated lifespan  of a                                                               
pipeline in the bottom of Cook Inlet before it fails.                                                                           
                                                                                                                                
MS.  RYAN explained  the technology  for  building pipelines  has                                                               
changed  and  pipelines  are  different now.    She  related  the                                                               
pipelines in  Cook Inlet were  not expected to operate  for "this                                                               
long  a period  of time  ...  this is  beyond the  life that  was                                                               
originally anticipated."                                                                                                        
                                                                                                                                
1:15:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAUSCHER recalled  after  the  [Exxon Valdez  Oil                                                               
Spill on  3/24/89] double-hulled  oil tankers were  required, and                                                               
suggested the use  of double-hulled pipelines may  be possible in                                                               
the future.                                                                                                                     
                                                                                                                                
MS. RYAN further  explained that the pipelines  being built today                                                               
are often  encased in materials  such as concrete.   Although not                                                               
the  same as  a double-hulled  tanker, pipelines  today meet  the                                                               
standards nationally  recognized as the "best  standards."  [DEC]                                                               
has a  best available technology  requirement that  asks industry                                                               
to  consider using  the  best equipment  and  technology for  new                                                               
construction.  She remarked:                                                                                                    
                                                                                                                                
     The  best available  technology process  is sort  of an                                                                    
     iterative   process  where   they   evaluate  all   the                                                                    
     different  options that  they could  use to  build that                                                                    
     pipeline and we work with  them to figure out the right                                                                    
     and safest method ... that is economically feasible.                                                                       
                                                                                                                                
REPRESENTATIVE  RAUSCHER surmised  pipelines  in  Cook Inlet  are                                                               
built to new and improved regulations.                                                                                          
                                                                                                                                
MS.  RYAN added  the best  available technology  contingencies in                                                               
DEC statute and regulations are "state  of the art" and in common                                                               
use  today  from  a  regulatory  perspective,  "to  try  to  push                                                               
industry  to   use  the  best  technology   available  to  them."                                                               
Further,  it  allows  some  flexibility  to  determine  the  best                                                               
methods.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  PARISH  expressed  his concern  that  because  of                                                               
aging  infrastructure  other  pipelines   may  be  in  a  similar                                                               
condition as those that have failed.   He posited this may be the                                                               
indication  of   the  beginning   of  a  systemic   failure,  and                                                               
questioned how DEC would respond.                                                                                               
                                                                                                                                
MS. RYAN pointed  out the state has very  different standards for                                                               
oil pipelines than for natural  gas pipelines; in fact, there are                                                               
no  standards  for  natural  gas   pipelines.    There  are  many                                                               
standards for pipelines  and infrastructure related to  oil.  For                                                               
example,  in addition  to the  best  available technology  clause                                                               
[oil  producers] are  required  to have  cathodic protection  and                                                               
leak protection technology, so industry  monitors pipelines on an                                                               
ongoing  basis  to  seek  leaks before  they  occur  and  perform                                                               
prevention measures.  She said  aging infrastructure is not a new                                                               
problem in Cook  Inlet or on the North Slope  thus DEC is focused                                                               
on preventing spills from aging  infrastructure by leak detection                                                               
technologies.                                                                                                                   
                                                                                                                                
1:20:51 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOSEPHSON  asked  whether  Ms. Ryan  could  inform  the                                                               
committee on the  history of why the state  regulates the quality                                                               
and care of oil pipelines but not that of gas pipelines.                                                                        
                                                                                                                                
MS.  RYAN  read   from  AS  46.03.020,  DEC   generic  powers  of                                                               
department authority, as follows [in part]:                                                                                     
                                                                                                                                
        ... allows the department to adopt standards for                                                                        
        petroleum and natural gas pipeline construction,                                                                        
     operation, modification, or alternation.                                                                                   
                                                                                                                                
MS. RYAN advised the aforementioned  clause creates authority for                                                               
DEC  to  set  standards  for  the  construction  of  natural  gas                                                               
pipelines;  however,  AS  46.04.050 exempts  DEC  from  requiring                                                               
contingency plans for  natural gas pipelines.   She explained the                                                               
logic behind  the exemption  was that  if there  is a  release of                                                               
natural gas  there is  no method  to clean  it up,  and therefore                                                               
there is  no need to document  through a contingency plan  that a                                                               
company has the  capacity to clean up a spill.   Ms. Ryan related                                                               
several  years ago  "it  was looked  at to  decide  if the  state                                                               
wanted   to  pursue   regulations   for   natural  gas   pipeline                                                               
construction and operation,  and it was determined  that that was                                                               
not in the best interest for  the state, because it would require                                                               
getting  primacy  from  PHMSA,   the  federal  organization  that                                                               
regulates all  these lines, and  it's sort  of an all  or nothing                                                               
opportunity:   you either take  all the natural gas  pipelines in                                                               
the state from  PHMSA and do what they're doing,  or you do none.                                                               
... I was told at that point the  state decided that was a lot of                                                               
work ...  that the work  that PHMSA  was doing was  adequate, and                                                               
that the  state wouldn't be  doing it, probably,  any differently                                                               
than  PHMSA  is   doing  it  now,  and  declined   to,  to  adopt                                                               
regulations."                                                                                                                   
                                                                                                                                
1:23:52 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOSEPHSON questioned  whether  the Alaska  Oil and  Gas                                                               
Conservation Commission  (AOGCC), or another agency,  could go to                                                               
Hilcorp or another  company and demand that it make  an effort to                                                               
stop a natural gas leak.                                                                                                        
                                                                                                                                
MS. RYAN explained AOGCC has authority  if a company is wasting a                                                               
state resource.   However, in  the aforementioned  situation, the                                                               
resource was not being extracted  but was transiting from land to                                                               
fuel an  oil platform,  thus AOGCC  did not  have a  role.   In a                                                               
situation where a resource is  being extracted and is not managed                                                               
correctly, AOGCC  could step in.   [PHMSA] does have  the ability                                                               
to force Hilcorp  to contain and control any leak  from a natural                                                               
gas pipeline,  and did so.   [PHMSA] inspects pipelines,  and has                                                               
requirements  that  pipelines  are constructed  and  repaired  by                                                               
methods that meet  national standards, and the  state relies upon                                                               
PHMSA to regulate natural gas pipelines.                                                                                        
                                                                                                                                
CO-CHAIR  JOSEPHSON  asked  why  offshore drilling  can  be  done                                                               
safely in the Beaufort Sea and  the Chukchi Sea, but the [Hilcorp                                                               
pipeline  repair] had  to  wait  until ice  was  cleared in  Cook                                                               
Inlet.                                                                                                                          
                                                                                                                                
MS. RYAN pointed out in Cook  Inlet the issue was that the divers                                                               
needed to  be tethered to a  boat, and because the  boat may have                                                               
needed to  move to avoid ice  flow, the situation was  unsafe for                                                               
divers.     In  federal  waters,   the  [Bureau  of   Safety  and                                                               
Environmental   Enforcement  (BSEE),   U.S.  Department   of  the                                                               
Interior] regulates  oil spill  prevention and  response activity                                                               
such as the  proposal to drill in the Beaufort  and Chukchi seas;                                                               
in fact, BSEE  required a three-way contingency  process to close                                                               
a well - all  of which would be functional even  with ice cover -                                                               
before it allowed  Shell [oil company] to drill.   This is a very                                                               
different scenario  than a  natural gas  pipeline in  Cook Inlet,                                                               
and a very different regulatory paradigm.                                                                                       
                                                                                                                                
1:28:05 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR  asked if  the movement of  the large  boulder that                                                               
struck  the Anna  platform  could have  been  related to  seismic                                                               
activity.                                                                                                                       
                                                                                                                                
MS.  RYAN said  it is  pretty typical  for large  boulders to  be                                                               
rolling around  on the seafloor of  Cook Inlet due to  the strong                                                               
tidal influence  that pushes  the rocks around.   In  response to                                                               
Representative Parish,  she said there  are 15 platforms  in Cook                                                               
Inlet.                                                                                                                          
                                                                                                                                
REPRESENTATIVE PARISH  asked for the amount  of funding available                                                               
for the eventual removal of platforms.                                                                                          
                                                                                                                                
MS.  RYAN deferred  the  question to  the  Department of  Natural                                                               
Resources  (DNR)  because  DNR  leases  the  subseafloor  to  the                                                               
platforms with requirements for removal.                                                                                        
                                                                                                                                
CO-CHAIR TARR turned the  presentation to Representative Parish's                                                               
question as  to whether the  legislature could be assured  that a                                                               
large  diameter  pipeline  [under]  Cook Inlet  would  not  cause                                                               
problems, or how to protect the state from problems.                                                                            
                                                                                                                                
REPRESENTATIVE  PARISH  stated that  he  raised  the question  of                                                               
pipeline safety because of the loss  of tens of millions of cubic                                                               
feet  of natural  gas through  a pipeline  leak.   He shared  his                                                               
strong concern  about putting another  pipeline in  a seismically                                                               
active area that  possibly could not be repaired for  a long time                                                               
due to weather.                                                                                                                 
                                                                                                                                
1:32:50 PM                                                                                                                    
                                                                                                                                
FRANK RICHARDS,  PE, senior  vice president,  program management,                                                               
Alaska  Gasline  Development  Corporation (AGDC),  Department  of                                                               
Commerce,  Community  &   Economic  Development,  provided  brief                                                               
background information for Dr.  Keith Meyer, pipeline engineering                                                               
manager, AGDC.   Mr. Richards informed the  committee AGDC's work                                                               
on  pipeline  design  is conducted  within  the  regulations  and                                                               
statutory requirements  of the  Pipeline and  Hazardous Materials                                                               
Safety    Administration    (PHMSA),     U.S.    Department    of                                                               
Transportation.  The  transportation of natural and  other gas by                                                               
pipeline is governed  by PHMSA regulation 49 CFR  Part 192, which                                                               
is  the  regulation that  pipelines  in  the  U.S. must  meet  to                                                               
progress to  operation.  As  a regulator, PHMSA will  ensure AGDC                                                               
is  in compliance  with its  standards and  AGDC has  worked with                                                               
PHMSA on  the Alaska Stand  Alone Pipeline (ASAP) and  the Alaska                                                               
LNG Project (Alaska LNG) due  to the great concern about pipeline                                                               
safety specifically  related to  frost heave or  frost settlement                                                               
to  the  land  crossing  from  the North  Slope  to  Cook  Inlet.                                                               
Further,  the Cook  Inlet  crossing is  also  a very  challenging                                                               
environment,  but  AGDC  has  a design  package  that  meets  all                                                               
requirements and would put in  place safety factors to ensure the                                                               
pipeline will meet its design lifespan and beyond.                                                                              
                                                                                                                                
1:35:18 PM                                                                                                                    
                                                                                                                                
KEITH MEYER,  PhD, pipeline engineering manager,  AGDC, said AGDC                                                               
is  in  the  design  phase   of  the  Alaska  LNG  project  which                                                               
incorporates a  Cook Inlet crossing.   He related AGDC  took over                                                               
the  design of  the pipeline  from the  [Joint Venture  Agreement                                                               
(JVA) between  BP, ConocoPhillips  Alaska, Inc.,  and ExxonMobil]                                                               
and is  working with the  original contractor for the  Cook Inlet                                                               
crossing,  INTECSEA  Houston  Energy   Center  II.    [AGDC]  has                                                               
incorporated the design  into its recent filing  with the Federal                                                               
Energy  Regulatory  Commission   (FERC),  especially  related  to                                                               
Resource  Report  11,  which  defines  pipeline  reliability  and                                                               
integrity in general.  He explained  the pipeline is one of three                                                               
major components [of  the project], along with  the gas treatment                                                               
plant  (GTP) and  the liquefied  natural gas  (LNG) plant.   Also                                                               
included in  Resource Report 11  is discussion of the  Cook Inlet                                                               
crossing, which  is of particular  interest to PHMSA,  the agency                                                               
that  administers   the  federal  regulations  that   govern  the                                                               
pipeline:  Title 49, CFR Part  192, that sets the minimum federal                                                               
safety standards  for natural gas  pipelines.  Dr.  Meyer further                                                               
explained  there  were  multi-year  analyses of  the  Cook  Inlet                                                               
crossing that considered alternative  locations for the crossing,                                                               
geophysical  and  geotechnical  metocean  surveys,  and  detailed                                                               
seismic analysis of faulting and  the dynamics of seismic motion.                                                               
The pipeline is located in  areas to avoid significant changes in                                                               
seafloor topography,  areas of  extreme current,  and to  avoid a                                                               
perpendicular  alignment  with  the  direction  of  the  current.                                                               
Further, AGDC is working with  PHMSA to meet federal standards of                                                               
burial  depth  at the  east  and  west  shore crossings,  and  to                                                               
address   shallow  hazards   associated   with  shore   crossings                                                               
including Arctic hazards such as  ice and ice keels, and moderate                                                               
hazards   such  as   keels,  soil   scour,  and   beach  erosion.                                                               
Presentations on  the design have  been given to PHMSA,  and AGDC                                                               
has  received  clarification  on   the  requirements  related  to                                                               
onshore  versus  offshore  pipelines.    He  said  AGDC's  design                                                               
criteria  is   extensive,  using  metocean  data   and  multiyear                                                               
analyses under  the guidelines  of best  environmental protection                                                               
practices, and  the criteria considers moving  boulders, anchors,                                                               
vessels, ice  keels, seismic  events, and  seismic faulting.   He                                                               
restated  that Title  49, CFR  Part 192,  are minimum  standards;                                                               
however,  AGDC will  use approximately  25  percent over  minimum                                                               
standards  for  pipe  wall thickness,  along  with  a  protective                                                               
coating of  fusion bonded epoxy,  further coated with  3.5 inches                                                               
of  concrete.   Dr.  Meyer  advised  AGDC has  site-specific  and                                                               
general crossing analyses augmented  with metocean data, which is                                                               
data  such as  the depth  and velocity  of currents  and changing                                                               
topography  on  the  seafloor  that   may  affect  the  pipeline.                                                               
Further work with INTECSEA will be  to review all the analyses to                                                               
ensure all  of the design  criteria is sufficient, and  to refine                                                               
the  analyses within  the PHMSA  and FERC  review processes.   He                                                               
further explained  there are block  valves located at  each shore                                                               
crossing, and pads to service the  block valves; AGDC has met all                                                               
of  the  minimum  standards  and  all  the  Cook  Inlet  specific                                                               
standards.    Dr.  Meyer  advised  after  [the  design  phase  is                                                               
complete],  AGDC  will  continue  to  work  with  PHMSA  for  the                                                               
operational  part  of  design  and to  follow  through  with  the                                                               
operation of the  pipeline, particularly as to  the monitoring of                                                               
the pipeline during  operations.  The pipeline  is fully piggable                                                               
using pigs  which travel through  the pipeline to  detect cracks,                                                               
corrosion,  and changes  in geometry  and  wall thickness,  among                                                               
other factors.                                                                                                                  
                                                                                                                                
1:42:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PARISH inquired as  to the anticipated design life                                                               
of the pipeline.                                                                                                                
                                                                                                                                
DR. MEYER  responded the desired design  life is the same  as the                                                               
length of  the lease:   30  years.  However,  he pointed  out the                                                               
Trans-Alaska  Pipeline System  (TAPS), after  its initial  design                                                               
life  transpired, underwent  a supplemental  environmental impact                                                               
statement (EIS)  and continues to  operate.  Generally,  the life                                                               
of   a   well-designed,   well-maintained  pipeline   is   nearly                                                               
indefinite,  depending  on   active  operational  monitoring  and                                                               
maintenance.   He opined with  state oversight, Alaska  LNG would                                                               
be very vigilant regarding the operational life of the pipeline.                                                                
                                                                                                                                
REPRESENTATIVE  PARISH  asked how  often  the  pipeline would  be                                                               
pigged.                                                                                                                         
                                                                                                                                
DR. MEYER  said the pipeline  would be  pigged every year  in its                                                               
early life  to ensure there  are no  anomalies and to  respond if                                                               
any  are  found;  after  some  time,  the  frequency  of  in-line                                                               
inspections (ILIs)  would be increased again  to reveal late-life                                                               
anomalies, as  is specified by code.   He added that  there would                                                               
be continuous  leak-detection monitoring by the  pipeline control                                                               
system that would  shut the valves automatically in  the event of                                                               
a leak, similar to oil pipeline systems.                                                                                        
                                                                                                                                
REPRESENTATIVE PARISH asked for the pipeline's capacity.                                                                        
                                                                                                                                
MR. RICHARDS said the mainline  pipeline is designed to transport                                                               
three billion feet cubic feet per day.                                                                                          
                                                                                                                                
DR. MEYER added the project is  a 42-inch pipeline operating at a                                                               
pressure of above 2,000 pounds per  square inch (PSI), which is a                                                               
high-pressure pipeline.   In  further response  to Representative                                                               
Parish, he  explained at  that pressure, natural  gas is  a dense                                                               
gas  which  would  be  liquified  at the  site  of  the  proposed                                                               
liquefaction plant located on the Kenai Peninsula.                                                                              
                                                                                                                                
1:46:45 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR pointed  out the existing natural  gas pipelines in                                                               
Cook Inlet are six-inch diameter,  and asked how AGDC compensates                                                               
when using baseline data from much smaller pipelines.                                                                           
                                                                                                                                
DR.  MEYER said  AGDC is  using  INTECSEA from  Houston to  bring                                                               
experience gleaned from large diameter  pipelines in the [Gulf of                                                               
Mexico].   He  acknowledged there  is minimal  experiential basis                                                               
for data in Alaska on  large diameter pipelines, and INTECSEA has                                                               
a  lot of  experience  with pipelines  of this  size.   There  is                                                               
experiential data  in the Cook  Inlet, such as the  metocean data                                                               
design  criteria.   He related  AGDC  and Alaska  LNG used  local                                                               
contractors to develop  ocean data and to  record historical data                                                               
such as ice events in Cook Inlet.                                                                                               
                                                                                                                                
CO-CHAIR  TARR asked  whether  AGDC  is required  to  build to  a                                                               
certain  magnitude  of  earthquake  minimum  standards  based  on                                                               
historical seismic activity.                                                                                                    
                                                                                                                                
DR.  MEYER   confirmed  that  AGDC  must   meet  minimum  federal                                                               
standards; however,  federal standards  are "not  that specific,"                                                               
thus  each  project  must  develop  its  own  standards  for  the                                                               
pipeline.    For  the  onshore   pipeline,  AGDC  researched  the                                                               
probabilistic seismic hazard assessment,  the TAPS standards, and                                                               
-  due to  seismic  events in  Interior Alaska  -  a more  recent                                                               
valuation of  seismic activities.  Criteria  were developed which                                                               
are subject to  oversight and evaluation by FERC  and PHMSA; both                                                               
agencies must  agree that the  results are the  minimum standards                                                               
specifically for the Alaska LNG  pipeline.  This would also apply                                                               
to Cook  Inlet, where AGDC  reviewed standards such  as faulting.                                                               
The faults in the  bottom of Cook Inlet are very  old and are not                                                               
considered active,  however, north  of Cook  Inlet there  are the                                                               
Lake  Clark  and  Castle Mountain  faults  which  are  considered                                                               
potential  hazards to  the pipeline  and which  are addressed  by                                                               
onshore  design requirements.    Dr. Meyer  stressed the  project                                                               
follows industry  standards for events within  the Holocene Epoch                                                               
- which  covers about 10,000-15,000  years [up to the  present] -                                                               
and if  an active  fault is  found within  that time  period, the                                                               
data  is included  in the  design  criteria to  allow for  future                                                               
movement; for  example, the  [Denali Fault]  was included  in the                                                               
TAPS design criteria.  He  recalled during the most recent Denali                                                               
earthquake TAPS performed as designed,  and was back in operation                                                               
within  two days.   Further,  many  of the  same "designers"  are                                                               
working  on Alaska  LNG, and  are using  the same  fault crossing                                                               
criteria and methodology as was used for TAPS.                                                                                  
                                                                                                                                
1:51:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TALERICO  recalled seeing  a section of  pipe that                                                               
had  been  replaced in  Cook  Inlet  that  was smaller  and  very                                                               
different than the pipe described  by Dr. Meyer for this project.                                                               
He observed the  pipe planned for the project  "is certainly much                                                               
more  substantial than  the  50-year-old  infrastructure that  we                                                               
have there ...."                                                                                                                
                                                                                                                                
DR.  MEYER, although  he did  not  have direct  knowledge of  the                                                               
existing pipe,  affirmed that in  the last half  century advances                                                               
have been made  in base metal technology  and welding technology,                                                               
and even more  importantly, [improvements have been  made] in the                                                               
emphases  on workers'  qualifications, oversight,  the evaluation                                                               
of construction  practices, as well as  construction and operator                                                               
evaluations  that require  participation  from all  parties.   He                                                               
opined "things have changed quite a bit."                                                                                       
                                                                                                                                
REPRESENTATIVE WESTLAKE  returned attention to  Hilcorp's natural                                                               
gas  leak caused  by  a  three- by  ten-foot  boulder, and  asked                                                               
whether there is  an "active season" when there  is more movement                                                               
[on the seafloor in Cook Inlet].                                                                                                
                                                                                                                                
DR. MEYER was unware of any  patterns other than seasonal ice and                                                               
the diurnal pattern of the currents.                                                                                            
                                                                                                                                
CO-CHAIR  TARR inquired  whether the  speed of  a response  to an                                                               
incident is included in the overall plans.                                                                                      
                                                                                                                                
DR. MEYER  said the speed  of the  response [to an  incident] has                                                               
not been evaluated at this time.                                                                                                
                                                                                                                                
CO-CHAIR  TARR  expressed her  understanding  that  at this  time                                                               
block  valves at  shore crossings  and [spill  detection] sensors                                                               
[are in  the plan]  thus there are  specific locations  where the                                                               
pipeline could  be shut down;  undetermined at this time  is once                                                               
[a spill] is contained, how long  would transpire to the point of                                                               
repair.                                                                                                                         
                                                                                                                                
DR. MEYER  clarified that response  to an initial venting  of the                                                               
pipeline would  be within minutes.   He said his  previous answer                                                               
was to the  response to fixing the pipeline  "anywhere within the                                                               
venting of the  27 miles between the block valves."   He restated                                                               
AGDC has not evaluated how  fast an operational repair team would                                                               
respond  to  an  incident,  but  in  the  FERC  filing  there  is                                                               
information as  to how  fast the pipeline  system responds  to an                                                               
alert of a venting.                                                                                                             
                                                                                                                                
1:56:22 PM                                                                                                                    
                                                                                                                                
MR.  RICHARDS added  the design  safety studies  for the  project                                                               
reviewed  the interaction  between  [the pipeline]  and ice,  ice                                                               
keels, subseafloor boulder movement,  and anchor drop and/or drag                                                               
from large ships, thus the  design criteria reflects a 30 percent                                                               
increase in  wall thickness of  the pipe  from 0.92 inch  to 1.25                                                               
inch, as well  as 3.5 inches of concrete coating.   He said these                                                               
criteria will provide a suitable  support to handle both geologic                                                               
and geotechnical  types of impacts -  as well as ship  impacts on                                                               
the pipe - and is a very robust design.                                                                                         
                                                                                                                                
DR.  MEYER noted  AGDC  is also  tasked by  PHMSA  to ensure  the                                                               
pipeline is  stable and  to demonstrate as  part of  its offshore                                                               
regulatory  requirements submitted  by  INTECSEA  in its  report;                                                               
however,  a  review of  the  INTECSEA  report  has not  yet  been                                                               
received from PHMSA as part of its regulatory oversight.                                                                        
                                                                                                                                
REPRESENTATIVE  PARISH   asked  about   the  likelihood   that  a                                                               
significant  break,  requiring  repairs to  the  pipeline,  would                                                               
occur during the pipeline's 30-year design life.                                                                                
                                                                                                                                
DR.  MEYER said  AGDC  feels that  is very  unlikely  as AGDC  is                                                               
exceeding the  design standards; AGDC  has amassed a  vast amount                                                               
of data and  experience through TAPS and through  the North Slope                                                               
Point  Thomson   and  Prudhoe  Bay  transmission   lines.    This                                                               
confidence is based not only on  the pipeline design, but also on                                                               
the  knowledge that  modern gas  pipelines  today have  a lot  of                                                               
experience   in  monitoring,   and   in  day-to-day   operational                                                               
facility; in fact,  if a problem is coming up  along the pipeline                                                               
- which is possible -  modern operational monitoring can meet and                                                               
safely prevent a major outage.                                                                                                  
                                                                                                                                
REPRESENTATIVE PARISH gave  a scenario in which  a tanker dropped                                                               
its anchor  on the pipeline, causing  a leak in late  November or                                                               
early December, and asked how long it would take to repair.                                                                     
                                                                                                                                
DR. MEYER remarked:                                                                                                             
                                                                                                                                
     I'm  sorry,  as  I  said  earlier,  I  don't  have  the                                                                    
     information  for  response  teams for  that,  for  that                                                                    
     particular scenario, we just  haven't gone that far yet                                                                    
     in our operational evaluation.                                                                                             
                                                                                                                                
MR.  RICHARDS pointed  out plans  for actual  repairs need  to be                                                               
factored  into  the  operational  component  and  have  not  been                                                               
identified yet, in terms of  risk.  Contingencies and mitigations                                                               
are  a  work  in  progress  because  AGDC  has  been  working  on                                                               
preliminary  front-end engineering  design  (pre-FEED), and  will                                                               
now continue  into front-end engineering design  (FEED), detailed                                                               
design, and operational evaluations on  how to handle those types                                                               
of arrangements.                                                                                                                
                                                                                                                                
REPRESENTATIVE  PARISH, noting  that  Hilcorp took  approximately                                                               
four months to respond to and  repair [a natural gas leak in Cook                                                               
Inlet], asked whether AGDC could respond more quickly.                                                                          
                                                                                                                                
DR. MEYER remarked:                                                                                                             
                                                                                                                                
     With the caveat that I  said earlier, we are looking at                                                                    
     experience, for example,  in the North Sea  as well the                                                                    
     possibility of contracting,  contacting and contracting                                                                    
     deep-sea repair  groups that would quickly  mobilize to                                                                    
     Alaska.   These are  speculation, I  don't want  to put                                                                    
     this on  ... as something  we're adhering to  right now                                                                    
     because  we  are  trying  to  work  those  things  out;                                                                    
     nevertheless, this  is not a situation  that is unheard                                                                    
     of around the world, and we  are of course ... we would                                                                    
     employ best, best technology to, to respond.                                                                               
                                                                                                                                
2:04:27 PM                                                                                                                    
                                                                                                                                
GENE  THERRIAULT,  director,  government  relations,  AGDC;  team                                                               
lead, Interior Energy Project,  Alaska Industrial Development and                                                               
Export Authority,  Department of  Commerce, Community  & Economic                                                               
Development, informed  the committee  he would  distribute AGDC's                                                               
most  recent semi-monthly  update  [document not  provided].   He                                                               
directed  attention  to  a  press  release  issued  by  the  U.S.                                                               
Department  of Commerce  that highlighted  some of  the agreement                                                               
between  the U.S.  administration  and the  People's Republic  of                                                               
China,  including an  item expressing  a greater  desire for  LNG                                                               
exports  from   the  U.S.  to  China   [document  not  provided].                                                               
Currently,  AGDC president  Keith  Meyer  is in  China  at a  gas                                                               
conference presenting  the Alaska  LNG project, and  meeting with                                                               
possible financiers and customers.   Mr. Therriault then referred                                                               
to  a  recent letter  from  the  Industrial Energy  Consumers  of                                                               
America  to U.S.  Secretary of  Energy [Rick]  Perry specifically                                                               
identifying Alaska's natural  gas as being the  first natural gas                                                               
that  should be  exported.   Finally, Mr.  Therriault noted  that                                                               
previous attendees  of the [Alaska LNG  Summit held 3/1/17-3/6/17                                                               
in  Girdwood,  Alaska]  are  now engaged  with  AGDC  on  signing                                                               
confidentiality  agreements in  order  to gain  access to  AGDC's                                                               
data,  which  he  said  shows  "continued  forward  momentum,  no                                                               
guarantee that  our infrastructure will  get built, but a  lot of                                                               
positive things happening ...."                                                                                                 
                                                                                                                                
2:07:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PARISH asked for  the minimum internal diameter of                                                               
a pipe that can be pigged.                                                                                                      
                                                                                                                                
DR. MEYER  recalled the  minimum is four  inches; but  he pointed                                                               
out  the   minimum  continues  to   decrease  with   advances  in                                                               
technology.                                                                                                                     
                                                                                                                                
MS. RYAN,  turning attention to North  Slope infrastructure, said                                                               
there  was an  inner  annulus mechanical  integrity failure  that                                                               
caused a  release of crude  oil and  diesel fuel at  wellhead 13,                                                               
drill pad number  2, owned by BP  on the North Slope.   The event                                                               
occurred on  3/30/17, and  is in recovery  mode.   Also occurring                                                               
was spraying  of oil outside  of the wellhouse, and  some leaking                                                               
of  oil  out  of  the  wellhouse related  to  the  inner  annulus                                                               
failure.   She said  the oil  was contained on  the well  pad and                                                               
there  has not  been a  release of  oil off  the pad.   [DEC]  is                                                               
working with BP  to clean up where possible,  although because of                                                               
the infrastructure on the pad it  is not unusual for DEC to allow                                                               
the company to leave  some [oil] in place if there  is a plan for                                                               
final clean up when the facility is closed.                                                                                     
                                                                                                                                
2:10:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PARISH returned  to  [one  of the  aforementioned                                                               
natural gas  pipeline leaks] and  asked whether it was  an eight-                                                               
inch  pipeline that  leaked from  December  [2016] through  April                                                               
[2017].                                                                                                                         
                                                                                                                                
MS. RYAN  said the Hilcorp  natural gas pipeline  was eight-inch.                                                               
In further  response to Representative  Parish, she said  she was                                                               
unsure when, but the gas  pipeline and the companion oil pipeline                                                               
were pigged.  She remarked:                                                                                                     
                                                                                                                                
     It was  tricky to pig it  because of a valve  that, you                                                                    
     know,  these pigs  not  only have  to  fit through  the                                                                    
     pipeline, they have  to fit through all  the valves and                                                                    
     there's a  right-angle valve going  up to  the platform                                                                    
     leg  that made  it very  difficult  to get  a pig  that                                                                    
     would fit into  that type of a pipeline.   It is pretty                                                                    
     amazing   how   they've    been   advancing,   in   the                                                                    
     capabilities to pig [pipelines] today.                                                                                     
                                                                                                                                
MS. RYAN offered  to provide the exact date of  when the pipeline                                                               
was pigged.                                                                                                                     
                                                                                                                                
REPRESENTATIVE PARISH  expressed his confusion about  how pigging                                                               
a line  provides high-quality data  on wall thickness,  bends, or                                                               
breaks, but  the data needed  to repair the leaking  pipeline was                                                               
unclear.  He  asked how reliable the data is  from pigging a line                                                               
in terms of anticipating problems.                                                                                              
                                                                                                                                
MS.  RYAN  advised [the  data]  varies  widely depending  on  the                                                               
apparatus used;  some pigs  are "smarter than  other pigs."   For                                                               
example, the  pig used between  the oil [pipeline] and  the Bruce                                                               
platform just pushed  the oil through; the term "pig"  is a broad                                                               
term  used for  almost  any type  of device  put  in a  pipeline.                                                               
Further,  it is  harder for  a  smaller pig  to collect  advanced                                                               
information.   In response  to Representative Parish, she said it                                                               
is possible to have a four-inch smart pig.                                                                                      
                                                                                                                                
REPRESENTATIVE PARISH  asked whether  Hilcorp is  routinely using                                                               
smart pigs in its pipeline.                                                                                                     
                                                                                                                                
MS.  RYAN said  Hilcorp was  able to  do so  within the  last six                                                               
months on  its oil pipeline  because of  the angle of  the valve.                                                               
How  often a  company  can pig  a pipeline  varies.   In  further                                                               
response to  Representative Parish,  she said  she was  unsure of                                                               
Hilcorp's specific plans  for the use of smart  pigs, but Hilcorp                                                               
has announced that it plans to  "step up" some of its monitoring.                                                               
There are other  types of monitoring that Hilcorp does  - such as                                                               
using sonar to evaluate the pipe from the outside - and other                                                                   
ways to evaluate the integrity of a pipeline.                                                                                   
                                                                                                                                
2:16:36 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Resources Standing Committee meeting was adjourned at 2:16 p.m.                                                                 

Document Name Date/Time Subjects
House Resources Pipeline Safety Supporting Documents 5.12.17.pdf HRES 5/12/2017 1:00:00 PM
Pipeline Safety