INTRODUCTION

The answer to the question: Can oil exploration, development and production be done in the Arctic Environment in a way that activity protects the environment and worker safety?

The answer is, MAYBE !

I believe we have the Technology today to explore for, develop and produce oil from "ON SHORE" installations in just about any arctic environment. The lack of TECHNOLOGY is not the problem. We have good Engineering solutions for just about any conditions one might find in an Arctic Environment.

In addition, we will have assurances from the oil industry that they will do it safely. I believe they CAN if they have the will and are committed to do so in an environmentally safe manor.

Perhaps the question should be rephrased. Will the oil industry explore for, develop and produce oil in the arctic in a safe and environmentally responsible way?

My answer is, only if the public demands it !

In the beginning of a controversial project, the public will most likely demand it, just as they did during the debates over oil development in Alaska at Prudhoe Bay. Some of you may recall the great debates over this issue in the late 1960s and early 1970s. The problem is, once the industry makes their promises to do what is necessary to protect the environment and worker safety, the public will loose interest.

Once that happens, the OIL INDUSTRY even though well intentioned, will not follow through on their assurances and promises to do what is necessary to protect worker safety and prevent degradation of the Environment. This failure to follow through is well documented throughout the world. I believe that the industries' failure to follow through is a direct result of the apathy of the public, the lack of political will in our elected officials and failure of our regulators to hold the oil industry accountable and make the industry live up to its promises.

We all witnessed the tragic events of the Exxon Valdez. That disaster was a direct result of assurances and promises never kept.

Before I expand on what I have just said, let me tell you a bit about myself:

My experience in Alaska goes back 22 years to the design and construction of the Trans-Alaska Pipeline that brings oil from Alaska's North Slope to tidewater at the City of Valdez, where I live. In 1973 I was a civil design engineer, working for Fluor Engineers and Constructors, in Los Angeles, California. Fluor was the firm that designed and built the Valdez Marine Terminal and Pump Stations. I was one of the first people to move to Alaska when we started building the Valdez Marine Terminal. In 1977, soon after tankers started transporting oil from Valdez, I went to work for the State of Alaska as the local inspector at Valdez, responsible for the oversight of terminal and tanker operations. In the early 1980's the State oversight activities of the oil industry were significantly reduced due to lack of funding. At that time, I wrote several very details reports about the deteriorating condition of the Valdez Marine Terminal. In addition, I advised my superiors that the oil industry was viewing our failure to conduct more oversight as signal that the state was no longer interests in their activities. By 1985, after considerable public pressure, the State once again started a more aggressive over-sight program. I became the primary investigator of allegations of improper activities. Those allegations included: failure to report and clean-up oil spills, improper burning of oily wastes, excessive venting of hydrocarbons to the air as well as improper operation of the ballast water treatment plant . This was a multi year investigation. There were a series of cease and desist orders given, several permits were modified or re-written with more detail and provisions to limit pollution. A criminal charge was filed and a convictions won. Millions of dollars were spent fixing some of the broken hardware. This whole process was a massive undertaking. Before all of the investigations were complete and all of the problem identified and fixed the EXXON VALDEZ hit Bligh Reef on March 24, 1989. I was the first representative on-board that night. The Exxon Valdez incident was just another symptom of the real problems with the oil industry in Alaska and world wide. Presently I am still with the State of Alaska but no longer work in an official capacity with the oil industry in Valdez.

Why am I here? Well I guess that historic night brought allot of things into focus. It also changed my life. Prior to that night, I tried to work within the system. I wrote many reports, sent them through channels like a good employee. For the most part, it was like no one was listening. Since that time I have become more vocal and somewhat of an activist. I decided that I could no longer expect the State and Federal governments to do their jobs without allot of public pressure. To that end several people I known and worked with over the past decade, have formed an advocacy group called the Alaska Forum for Environmental Responsibility. The Alaska Forum's mission is to hold industry and government officials accountable to the public mandate to protect the environment, public health and safety, provide a safe work place, and achieve a diverse and sustainable economic future for all Alaskans. The Alaska Forum does not oppose the utilization of Alaska's oil and other natural resources but believes utilization must occur in a manner that protects the long-term health of our environment, the foundation of Alaska's economic future. My participation in the Alaska Forum is as a private citizen and in that capacity I am here today.

In my opinion the EXXON VALDEZ disaster was caused by everyone, each of us as individuals, the U. S. Congress, Several state legislatures, federal and state officials and regulators and the oil industry all share responsibility for that event. We all failed to demand better of the oil industry.

Only after the EXXON VALDEZ spilled 11,000,000 barrels of oil into the pristine waters of Prince William Sound, did we as public citizens, once again, start demanding better of the oil industry. We also started applying pressure, on the state and federal agencies to be more aggressive in their oversight. In response to public outrage the U. S. congress and state legislatures enacted legislation and passed new laws. New people became involved. With all of the public pressure the oil industry, once again, promised the people of the world that they would do better, they again said they could be trusted and had learned their lesson.

Over the next couple of years, the public could see the oil industry change as it was forced to acquire new oil spill response equipment and tug boats to escort each loaded tanker through the waters of Prince William Sound. This is what the public demanded, and now, there is allot of new equipment that the public can see. It has been estimated there is now about one billion dollars worth of new equipment available to respond to and prevent oil spills. Most of it is on contract or leased and the actual composition changes a bit as old contracts expire and new contractors are secured.

BUT, what the public did and does not see is the massive behind the scene effort by the oil industry at lobbing the U.S. Congress, state legislatures, state and federal officials and regulators that all the new laws and requirements were not necessary. At the same time they are trying to reduce the amount of response equipment. In addition, the oil industry is still trying to reduce the requirements for more capable rescue and assist tugs.

The oil industry puts pressure on people in a number of ways. They go to great lengths to tell the world that there is not much oil left at Prudhoe Bay and how difficult it is to produce from other known existing fields near by. All anyone hears is that Prudhoe is declining. The industry has been exaggerating Prudhoe's demise. About a month ago there was a hearing before the Alaska Oil and Gas Conservation Commission where Arco and BP presented new information about much gas could be produced at Prudhoe without adversely effecting oil production. ARCO wants to produce more gas now and BP wants to use the gas to help produce the oil. The information presented indicates that Prudhoe reserves have now been significantly increased, it is now forecast to produce another 4.3 billion barrels. The estimated combined North Slope production has been increased by 7.1 billion barrels. This increase shows that the North Slope will produce no less that 1.0 million barrels per day until 2007 and after that will produce 840,000 ballels per day through 2010. Arco and BP have also said Prudhoe Bay will be producing through the year 2040. It is estimated by some that the break even point for the economic life of the pipeline is less than 500,000 barrels per day (b/d) and may be as low as 300,000 b/d. It is also expected that new technologies as well as new sources of oil will be found in the area around Prudhoe Bay. All of these estimates and industry projections do not contain any additional oil from the Arctic National Wildlife Refuge.

As time marches on the industry always increases their estimates of the amount of recoverable oil . At the same time they tell the world and their employees that they are running out of oil and going broke. It is has been estimated that the industry has made profits of well over 10,000,000 dollars per day for the first 10 1/2 years of north slope production. The 1991 estimated profits were over 8.2 million dollars per day. The industry is very silent about their true profits and true oil reserve estimates, their tactics have been to underestimate them and overestimate their costs.

Unfortunately, the industry's tactics are working, the public is confused and public support is waning, federal and state legislative bodies are reducing requirements and taxes, regulators are once again failing to regulate and demand better equipment, oversight has slipped again. In addition, the oil industry has been very successful at getting regulators to remove good knowledgeable inspectors and replace them with new inspectors that lack sufficient experience and training to know what they are inspecting and make sound technical decisions. This tactic has delayed the acquisition of get better equipment because the regulators can not make a decision as to the type and capability of new equipment necessary. In addition the industry also harasses and intimidates their own good employees that identify and report problems and concerns to them.

At present there is a severe quality control problem on the Trans-Alaska Pipeline. Over the past 5 years there have been several congressional hearings regarding employee intimidation and harassment, as well as the condition of the pipeline . At those hearings the industry's problems are exposed. The industry once again has promised to fix the problems and stop harassing their concerned employees.

Have they ?

NO !

The same type of problems exist today. It is not getting better very fast. The concerned employees, who are dedicated people and have been holding the pipeline system together, preventing another catastrophic spill event, are still being intimidated and harassed. The oil transportation system is still in a state of disrepair. The State and Federal Joint Pipeline Office (JPO) which oversees the Trans-Alaska Pipeline System has recently rejected 60% of the repairs that Alyeska says they have completed. It has been determined that there is not a single accurate as-built drawing that depicts the current construction of the pipeline. I could go on at length, but that is not why I am here. At present the JPO has been unsuccessful in getting Alyeska to stop intimidating and harassing their employees who report problems. There are at least 10 pending complaints filed before the U.S. Department of Labor (DOL), most of those complaints have been substantiated when DOL ruled in favor of the complainants. Alyeska has appealed the ruling and they are set to go to trial this month. Congress is also again investigating the on-going problems.

I want to reiterate that the only way that the oil industry will explore for, develop and produce oil without degrading the environment and protect worker safety is if the public demands it.

Without that continued public demand history will repeat itself. We will have the same attitude, smoke and mirrors that we experienced in the early 1970's when the oil industry was trying to get access to Alaska's North Slope oil. This cycle of industry promises when there is public pressure and the lack of industry preformances when public pressure wains, is well documented in the history of oil development on Alaska's North Slope. The body of this paper is well documented and provides details of a bit of that history. It is to long for me to present it orally here, but it does detail the history of some of the PROMISES. made about oil development in Alaska. You can expect similar promises by the industry about future oil development in pristine areas. I will let you decide for yourself if the oil industry's PERFORMANCE in Alaska has lived up to their PROMISES.

Thank you for affording me the opportunity to participate in the conference.



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