No oil and gas damage reported after earthquake

The epicenter of Monday’s brief 5.3 magnitude earthquake was in west Cook Inlet’s Trading Bay, according to the U.S Tsunami Warning System — less than a mile from Hilcorp’s Trading Bay processing facility and near the offshore McArthur River Unit, operated by Glacier Energy through its subsidiary Cook Inlet Energy.

Both Hilcorp and Glacier Energy inspected their facilities after the earthquake, and as of Tuesday no spill incidents had been reported, according to Alaska Department of Environmental Conservation spokesperson Candice Bressler. Bressler wrote in an email that her agency has “no specific inspection requirements following a seismic event” and that oil and gas infrastructure is built with earthquakes in mind.

“Critical facility components are designed using standards that take seismic loading into account,” Bressler wrote.

According to an Alaska Division of Oil and Gas lease map, 11 pipelines connect Hilcorp’s Trading Bay facility to offshore oil and gas wells. Following the earthquake, Hilcorp’s “field personnel conducted numerous incidental tank and secondary containment inspections to ensure no breaches have occurred,” wrote Hilcorp spokesperson Lori Nelson in an email, adding that “monitoring systems indicate our pipelines are operating normally.”

The Trading Bay facility pumps the oil gathered from offshore south to Hilcorp’s Drift River Terminal tank farm, from which it is barged across the inlet to Tesoro’s refinery in Nikiski. The Drift River facility sits near the base of the Mount Redoubt volcano and may be Cook Inlet’s most prominent example of an oil and gas facility disturbed by seismic activity. Volcano mudflows caused by eruptions of Mount Redoubt partially flooded the facility in 1989-1990 and in 2009, when Drift River’s then-operator, Chevron, emptied about 6.3 million gallons of crude from it tanks and closed it as a precaution, though no oil was spilled. Drift River remained closed until Hilcorp acquired it from Chevron and reopened it in 2012, spending $18.5 million to reinforce a concrete berm that protects the tanks against mudflows.

The oil spill planning and prevention group Cook Inlet Regional Citizen’s Advisory Council advocated at the time for Hilcorp to replace the Drift River Terminal and its potentially risky barge traffic with a pipeline across the inlet. Hilcorp Vice President David Wilkins announced in a presentation to the Resource Development Council May 4 that his company plans to create the pipeline CIRCAC had advocated for. Hilcorp’s $75 million project to close the Drift River Terminal would involve pumping oil gathered at the Trading Bay facility north instead, to be transported across the inlet from Hilcorp’s Granite Point facility via a pipeline that presently carries natural gas.

Cook Inlet Energy had also planned to eliminate its barge traffic with an inlet-spanning pipeline, applying in December 2012 for a right-of-way from Alaska State Pipeline Coordinator’s office to build a 26-mile pipeline from its Kustatan production facility to the Tesoro refinery in Nikiski. Though that pipeline was planned for construction in April 2015, Cook Inlet Energy’s parent company, Miller Energy, was forced into involuntary bankruptcy in August 2015, and two of its executives and an accounting partner were investigated by the Security and Exchange Commission for overvaluing company assets — ultimately receiving a $5 million fine.

Now owned by a new parent company, Glacier Oil and Gas, Cook Inlet Energy continues to operate oil and gas wells in the West McArthur River and West Foreland units in Trading Bay, south of the earthquake epicenter, as well as the Osprey Platform off the tip of the Kustatan Peninsula.

Though Bressler wrote that Glacier Oil and Gas workers had done post-earthquake inspections of their Trading Bay facilities, representatives of the company had not returned requests for comment before deadline Wednesday.

Reach Ben Boettger at ben.boettger@peninsulaclarion.com.

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