Poisoning the Well

Whistleblower Disclosures of Illegal Hazardous Waste Disposal on Alaska's North Slope

EXECUTIVE SUMMARY


By the Alaska Forum for Environmental Responsibility
January 1997


Note to the Reader: This report is based primarily on information obtained by Freedom of Information Act requests submitted to the US Department of Labor and public records disclosure requests submitted to the Alaska Oil and Gas Conservation Commission. Click here to go to the complete, documented version of the report (18 pages).


One year has passed since the Anchorage Daily News reported the existence of a whistleblower who disclosed illegal hazardous waste injections into North Slope oil wells by Doyon Drilling Services., Ltd. The incidents took place at the Endicott oil field, which is operated by British Petroleum (BP).

This report provides the first detailed account of the illegal and environmentally destructive practices at Endicott. It also discusses the relevance of these illegal practices to the public debate over opening the Arctic National Wildlife Refuge or the National Petroleum Reserve in Alaska to oil development.

The breadth of violations, retaliatory acts against a whistleblower, and an on-going criminal investigation suggest that improper disposal of solvents and other toxic materials may be standard operating procedure on the North Slope. The incidents at Endicott also suggest a failure of regulatory oversight by state and federal agencies charged with enforcing environmental laws on the North Slope.

NORTH SLOPE UNDERGROUND INJECTION WELLS: DESCRIPTION AND REGULATORY STRUCTURE

Underground injection wells are regulated by the Environmental Protection Agency (EPA). Injection wells can be divided into Class I wells and Class II wells. In Alaska, the Alaska Oil and Gas Conservation Commission (AOGCC) has signed a memorandum of agreement with EPA to oversee the Class II well program.

Class I wells are for disposal of industrial hazardous materials. Class I wells also exist for the injection of non-hazardous fluids near drinking water reserves. According to the EPA, Class I wells have a steel casing surrounded by cement that extends to the bottom of the well, and the well is subject to sophisticated and continuous monitoring.

Class II wells are specific to the oil and gas industry. In a Class II production well, fluids may be injected into the “annulus” surrounding the well bore. The annulus leads to a perforated area at the bottom of the well, which allows the fluids to disperse out horizontally into the stratum.

The general rule regarding Class II wells is that nothing may be injected back down the well that has not originated from the well. Thus, Class II fluids are generally mud and water. Additives are allowed to change mud viscosity or provide freeze protection.

THE ENDICOTT OIL FIELD

The Endicott oil field is the third largest of the seven main North Slope oil fields and is 57 percent owned by BP. BP Exploration, Alaska (BPXA) is the main developer of oil resources in the field. Endicott does not have wells capable of handling Class I industrial wastewater fluids. Endicott does have a Class II disposal well, designated as “P-18.” Acceptable wastes injected into this well include crude oil, condensate from crude oil lines, well treatment fluids, and produced water (water that is pumped up along with crude).

IMPROPER WASTE DISPOSAL AT BP’S P-18 DISPOSAL WELL

Despite key differences between Class I and Class II wells, the first of two separate but related incidents at Endicott indicates that BPXA managers and staff did not have a firm grasp of the distinction. This apparent “confusion” was fostered by a lack of record-keeping and lax regulatory oversight. Despite its assurances to the contrary, evidence suggests that BPXA and/or its contractors had, in fact, been disposing of Class I industrial wastes down Class II wells for at least two years, and possibly up to five years.

AOGCC summarized the P-18 incident as a misrouting of industrial wastewater to the P-18 well for a period of at least 18 months from 1993 to 1995. The summary relied exclusively on BPXA information and concluded that all injected materials were non-hazardous. Independent verification of this conclusion was not possible because consistent and accurate records, regular reporting and independent audits were not kept by BPXA nor apparently required by AOGCC.

A WHISTLEBLOWER AT DOYON 15

Doyon Ltd., is an Athabascan native corporation based in Fairbanks. Doyon’s subsidiary, Doyon Drilling, Inc., J.V., operates five large-scale, mobile drilling rigs on the North Slope. Doyon Drilling provides drilling services for the Endicott field under a contract with BPXA.

The whistleblower (hereinafter referred to as “WB” ) began employment with Doyon Drilling on July 5, 1993 as a rockwasher on Doyon 15. WB received training in rockwashing, sampling, and annular injection as well as descriptions of regulatory guidelines on which materials can and cannot be injected down an oil well. WB has a total of 22 years experience in Alaska’s oil industry.

"No one lives on the North Slope anyway."

On January 16, 1995, working on the swing shift, WB received orders to mix some 23 to 26, 55-gallon barrels of rig and shop waste into his rockwashing unit for disposal via annular injection into well 1-23. The wastes consisted of used oil, solvents, paints, paint thinners, hydraulic fluid, and glycol. WB refused to dispose of the waste because he recognized that environmental laws and BPXA’s annular injection permit prohibited disposal of the waste in that manner. WB was subsequently berated by co-workers for his refusal and told that the improper disposal was of no consequence because “no one lives on the North Slope anyway.”

From January to August 1995, WB continued to receive orders to dispose of non-Class II waste down Class II wells. WB refused to dispose of these wastes; other crew members did so instead. During this same period, WB also received repeated and increasingly aggressive threats to his safety and the safety of his children.

On several occasions between February and August 1995, WB informed Doyon management about the violations at Doyon 15 and that they had been on-going for five years. The managers initially acknowledged that the practice was wrong and suggested that they would “take care of it.” They later informed WB that BPXA had okayed Doyon’s injection of wastes. When Doyon’s Personnel Department consulted with these same manager, they were told that the practices were proper. On August 31, WB informed BPXA managers of the improper practices at Doyon 15.

By early September, threats by co-workers to WB had intensified to include direct threats to his life. WB asked to go home a day early but was told by managers that the threats to him and his family were only jokes. Doyon’s Personnel Department advised him that he needed a doctor’s order before he could leave the rig early. If he left, such an act would be considered a voluntary quit. WB finally asked for paid leave from Doyon 15. This request was denied and he took vacation time instead so he would not have to return to the rig.

BPXA issues report on Doyon 15 waste handling practices

On September 25, 1995, BPXA completed an investigation of Doyon 15 waste handling practices. The investigation made these findings:

Shortly after AOGCC began an investigation into the violations in February 1996, EPA requested AOGCC suspend its investigation until EPA had completed its own criminal investigation. WB later testified before a federal grand jury. Other Doyon 15 crew members pled the Fifth Amendment and refused to give testimony to the grand jury. The federal criminal investigation is still on-going; no indictments have been brought to date.

In March 1996, Doyon 15 was shut down and all rig employees were laid off. When Doyon 15 recommenced operations in September 1996, the rockwashing unit remained closed because AOGCC had suspended annular injections on Endicott. WB’s position was permanently eliminated by Doyon.

WB files and wins a complaint with U.S. Department of Labor.

In October 1995, WB filed a whistleblower complaint against Doyon Drilling. The complaint alleged threats and harassment as retaliation for his "protected activities" and requested an end to these adverse activities, damages, and attorneys fees.

The complaint was investigated by the Department of Labor's Wage and Hour Division, Seattle. The Department’s investigator found WB to be a highly credible individual who understood the disposal was illegal and tried to correct the problem through his management. He further concluded that Doyon management largely ignored WB’s concerns, that WB was harassed and intimidated by his co-workers, and that management did little to stop the harassment.

In August 1996, USDOL issued its decision: WB had made protected disclosures under the “environmental Acts” and had suffered resulting retaliation. The decision ordered that Doyon restore back pay and benefits to WB and offer him comparable employment. A cash settlement could replace back pay and reinstatement. Doyon was also ordered to cover WB’s legal fees.

Doyon appealed the USDOL decision. WB subsequently settled his complaint with Doyon in December 1996. The terms of the settlement are confidential.

IMPLICATIONS FOR OIL DEVELOPMENT OF THE ARCTIC NATIONAL WILDLIFE REFUGE AND THE NATIONAL PETROLEUM RESERVE IN ALASKA

Since The Exxon Valdez disaster, the oil industry has portrayed itself as utilizing the latest technologies to minimize the impact of its operations. This public relations effort has emphasized the industry’s environmental responsibility towards the North Slope environment. The incidents at the Endicott oil field suggest that the oil industry has presented the public and Congress with a one-sided, self-serving presentation of its practices.

In 1995, Congress held hearings regarding Arctic Refuge oil development. Alaska’s congressional delegation offered the oil companies and their contractors a liberal opportunity to demonstrate their progressive environmental practices. Alaska's Senator Murkowski, chairman of the Senate Energy and Natural Resources Committee, invited Doyon to testify in July 1995. At the same time as WB was fighting to have Doyon take his concerns seriously, Doyon's general manager Randy Ruedrich testified about how improvements in drilling technology allow Arctic oil development in an environmentally sound manner. Ruedrich made no mention of hazardous waste disposal. Similar statements were made by representatives of ARCO, BP and Alaska's Division of Oil and Gas.

The incidents at the Endicott oil field suggest that a close examination of oil industry practices should precede any future development of the Arctic National Wildlife Refuge (ANWR) and/or the National Petroleum Reserve in Alaska (NPRA).

CONCLUSION

The incidents of illegal injections of Class I hazardous wastes into Class II oil and gas wells on Endicott oil field may well be isolated events. However, the frequency of the practices at P-18 and Doyon 15, as well as the length of time (18 months for P-18 and up to five years for Doyon 15) suggest that injections of hazardous waste into oil wells may be widespread on the North Slope.

BPXA took the responsible course of action when it became aware of the P-18 and Doyon 15 practices. However, the incidents also underscore BPXA’s failure to maintain records of underground waste injections and its failure to ensure that its contractors adhered to the letter of the law.

The Endicott oil field incidents also demonstrate a failure on the part of the regulatory agencies to effectively police the oil and gas industry on the North Slope. The regulatory agencies did not take the incidents seriously until after a whistleblower came forward despite retaliation by his co-workers and management and ultimately sacrificing his 22 year career to disclose illegal practices. Had an irresponsible operator chosen to conduct a less thorough investigation, or swept the incidents under the rug, the likelihood of substantial regulatory agency involvement is by no means certain. Indeed, the fact that the criminal investigation is still underway a year later suggests there may be far more to the incidents than the regulatory agencies initially suspected. Hopefully, the results of this investigation will demonstrate government’s renewed interest in policing environmental practices on the North Slope.

The evidence suggests that the oil industry has not, in fact, proven environmentally responsible development of the North Slope. As the incidents at Endicott oil field show, illegal dumping of hazardous wastes occurred because of negligent and willful human failures, and a company’s deliberate refusal to take the word of a concerned worker seriously. Clearly, a close examination of oil industry practices should precede any future development of ANWR and/or NPRA.




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