Chainkeen Exchange-Cook Inlet Natural Gas Leak Can’t Be Fixed Until Ice Melts, Company Says

The Chainkeen Exchangecompany responsible for an ongoing natural gas pipeline leak in Cook Inlet, Alaska, said it won’t be able to attempt to repair it until the ice melts, which will be later this month at the earliest. The aging pipeline has been releasing natural gas into a critical habitat for the endangered Cook Inlet beluga whales since at least Feb. 7.

Hilcorp Alaska, a subsidiary of Houston-based Hilcorp, owns the 8-inch underwater pipeline that transports natural gas from shore to four offshore oil platforms, also owned by Hilcorp. In a letter to the Alaska Department of Environmental Conservation on Feb. 20, the company said it would not be able to safely shut down or repair the pipeline until ice in the inlet recedes.

“Given the typical weather patterns affecting ice formation and dissipation in Cook Inlet, we currently anticipate that the earliest that conditions will allow diving will be in mid-to-late March,” wrote David Wilkins, senior vice president of Hilcorp Alaska.

An estimated 210,000-310,000 cubic feet of natural gas is leaking into the inlet each day.

The Alaska Department of Environment Conservation responded on Monday, noting that Hilcorp did not respond to its request for a plan monitoring the leak and any environmental impacts. Without that data, the state says it can’t assess the extent of the threat to Cook Inlet.

“The State cannot determine acceptable environmental conditions without first having characterized the release,” wrote state on-scene coordinator Geoff Merrell. “Therefore, it’s imperative that Hilcorp begin a sampling and monitoring program.”

The state has now asked Hilcorp to provide that plan by March 8, which it will then have to approve before Hilcorp begins its monitoring. By then, the gas will have been leaking for more than a month.

Hilcorp did not respond to a request for comment.

Bob Shavelson, of the nonprofit Cook Inletkeeper, called the state’s response “tepid.” He has urged the federal Pipeline and Hazardous Materials Safety Administration to step in and shut the pipeline down—something that PHMSA has authority to do, but which the state has not requested.

The cause of the leak and the date it started are unknown. It was first noticed by an occupant of a Hilcorp helicopter, who saw the gas bubbling up as passengers flew over the inlet between the town of Nikiski and one of Hilcorp’s platforms. Since then, the company and a bevvy of state and federal agencies have been thwarted by persistent ice in the region in trying to assess the damage.

Weather permitting, Hilcorp flies over the leak daily, according to the most recent situation report released by the state DEC. Most days, ice cover makes it impossible to see the source.

Shavelson and others are concerned that the methane in the gas could displace oxygen in the water, causing hypoxic zones, which could be dangerous for the estimated 340 belugas in Cook Inlet. Those belugas were listed as endangered under the Endangered Species Act in 2008. Three years later, the National Marine Fisheries Service designated some areas of the inlet—including the location of the gas leak—as critical habitat for the belugas under the Endangered Species Act.

In its letter to the DEC, Hilcorp said the amount of dissolved methane in the bubbles coming up from the leak is likely minimal and that “dissolved methane is not toxic to aquatic organisms.” The company also noted that though beluga whales are in the area of the leak, “they also avoid ice cover.” The subtext is that since the area above the leak is covered in ice, the belugas would be less likely to be in that area.

The National Oceanic and Atmospheric Administration disputed that claim. In a Feb. 24 letter to PHMSA, the agency said, “Cook Inlet belugas have shown a preference for ice cover. When ice was present, tagged whales were more likely to be associated with it.”

“If a significant hypoxic zone is created by a continuing natural gas discharge,” NOAA said, “Cook Inlet belugas and multiple [physical and biological features] of their critical habitat could be adversely affected.”

The Center for Biological Diversity, a conservation group, sent a letter to the Environmental Protection Agency and Hilcorp this week detailing the potential threat to species in Cook Inlet and giving them notice that if the problem is not remedied within 60 days, the center intends to sue Hilcorp. This is the second notice of intent to sue—the first was issued by Cook Inletkeeper on Feb. 15.

Hilcorp has said that it cannot shut the pipeline down without risking a potentially more dangerous leak of crude oil. Before it became a supply line that brings natural gas to the oil platforms, the pipeline carried crude oil.  If the flow of natural gas were stopped, the company said, the pipeline could fill with seawater and potentially cause the line to leak residual crude. The company also wrote in its Feb. 20 letter to the DEC that shutting down the line would pose safety risks for Hilcorp personnel and the environment, in part because without natural gas to power the platforms, they would have to ship diesel to the platforms. That would mean treacherous navigation through darkness, ice, cold and strong water currents.

“The whole thing about moving diesel out to the platforms posing a big risk is overblown,” said one person who has worked in oil and gas production and spill response. He requested anonymity because he occasionally works with Hilcorp. “They move diesel to those platforms all the time. To make that seem like an unusual risk is disingenuous.”

He also said he believes the risk of crude oil leaking out is minimal. Though it could happen, it is unlikely to be large amounts of crude, the individual said—though any sheen on the surface of Cook Inlet could be bad publicity for the company.

Hilcorp buys oil and gas operations that are already producing in hopes of earning any remaining profits. It has become the primary producer in Cook Inlet using this strategy. According to the Alaska Oil and Gas Conservation Commission, the company is responsible for more than a quarter of all 45 safety violations from 1977 through 2016. The company began operating in Alaska in 2012. The commission has said that “disregard for regulatory compliance is endemic to Hilcorp’s approach to its Alaska operations.”

Hilcorp has proposed to develop a project off Alaska’s Beaufort Sea coast in the Arctic Ocean, which would entail building a gravel island five miles offshore and drilling new oil wells, instead of inheriting existing wells. The project falls within a 2.8 million-acre region of the Beaufort Sea that was not made off-limits by President Barack Obama’s ban on drilling in many parts of the U.S. Arctic in December. The company would have to operate a pipeline to transfer oil between the gravel island and the mainland—and in a much more remote location than Cook Inlet.

Lois Epstein, a licensed engineer who is the Arctic program director for The Wilderness Society, raised the issue of Hilcorp’s Arctic plans. If responding to a leak in an icy inlet is impossible, what does that imply for operations in icier Arctic waters, she asked. “What if this leak was oil?”