TradeEdge Exchange:Unplugged Natural Gas Leak Threatens Alaska’s Endangered Cook Inlet Belugas

Natural gas from a 52-year-old underwater pipeline has been leaking for at least two weeks into Cook Inlet in Alaska,TradeEdge Exchange home to a number of endangered species, including beluga whales.

The company that owns the pipeline, Hilcorp, has said that the pipeline cannot be shut down without posing additional risk to the environment or employee safety because stopping the flow could trigger a crude oil leak. The 8-inch pipeline, which carries natural gas from shore to four offshore oil platforms, is leaking an estimated 210,000 to 310,000 cubic feet of natural gas each day, according to the company.

“It’s a fairly decent sized ongoing leak of methane, especially when it’s unclear when they’ll actually get it shut down,” said Carl Weimer, the executive director of the nonprofit Pipeline Safety Trust. “Lots of methane going in the air is a concern as well as how it might be messing with the habitat.”

Attempts at a response by the company and by federal and state agencies have been hindered by weather conditions and ice, which has kept divers from reaching the source. The leak was first spotted around 3 p.m. on Feb. 7, when a Hilcorp helicopter pilot flying between the town of Nikiski and its offshore oil Platform A spotted bubbles on the water’s surface. An hour later, Hilcorp reported the leak to the National Response Center and to the Alaska Department of Environmental Conservation.

The federal Pipeline and Hazardous Materials Safety Administration is investigating and monitoring the leak, but has been unable to reach it. Other federal, state and local agencies are investigating and will be involved in the response, which includes daily flights over the source (weather permitting) and observations of wildlife to determine any impacts from the leak.

Hilcorp said in a statement that some amount of gas needs to flow through the pipeline. “If a minimum pressure is not maintained in the pipeline it could fill with water which would allow for the escape of residual crude oil, as this line was previously used as a crude oil pipeline,” the statement said. Hilcorp did not respond to a request for comment.

Bob Shavelson, of the nonprofit Cook Inletkeeper, questions the company’s insistence that the pipeline cannot be shut down. “They’re continuing to allow this gas to leak,” he said. “They don’t want to shut down the platforms that are producing their profits.”

Hilcorp was established in 1989 and has a strategy called “acquire and exploit,” meaning it buys oil and gas operations that are already producing in hopes of earning any remaining profits. Hilcorp has become the primary producer in Cook Inlet using this strategy, thanks to acquisitions it has made in recent years from ConocoPhillips, Chevron, Marathon Oil and XTO, a subsidiary of ExxonMobil. One of its acquisitions—Platform A, which is powered by the leaking pipeline—is among the oldest in the inlet, having been built by Shell in 1964.

The company is also active in gas development in the Utica Shale in Ohio and Marcellus Shale in Pennsylvania, and was a major player in the Eagle Ford Shale of Texas before it sold off its holdings there. It has operations on the Gulf Coast of Texas and Louisiana, and has recently started to expand into the North Shore of Alaska, as well as the Arctic.

Shavelson said he is concerned the leak threatens the health of the inlet and the endangered beluga whales that call it home. There are an estimated 340 belugas in Cook Inlet, down from 1,400 before a dramatic decline in the 1990s. In 2008, the inlet’s whales were listed as endangered under the Endangered Species Act. 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.

The exact impact of the gas leak on the whales isn’t clear, Shavelson said. “But we do know that it’s critical habitat for the beluga whale and that we’re discharging hundreds of thousands of cubic feet of natural gas each day,” he said. “I don’t think it’s a stretch to say it’s not good.”

That concern is shared by NOAA, whose spokesperson Julie Speegle said the agency is taking part in the response. “We are concerned this incident could have adverse impacts to marine life, particularly marine mammals,” she said in an email. “Our greatest concern is for endangered Cook Inlet beluga whales and impacts to their critical habitat.”

The inlet is also home to a population of steller sea lions that is endangered, as well as subsets of humpback whales, sea otters and eiders that are designated as threatened under the Endangered Species Act.

Cook Inletkeeper filed a notice of intent to sue on Feb. 15, giving the company 60 days to stop the leak before proceeding with a suit. Shavelson said his hope is that the leak will be stopped much sooner, or that the state or federal agencies will step in.

The pipeline provides natural gas that helps power four offshore drilling platforms, all of which are owned by Hilcorp.

Hilcorp has a checkered record in Alaska and elsewhere in the United States. It has been subject to numerous fines and rebukes from Alaska agencies, one of which said the company’s “disregard for regulatory compliance is endemic to Hilcorp’s approach to its Alaska operations.” The website for the Alaska Oil and Gas Conservation Commission (AOGCC) lists 12 instances in which Hilcorp is the responsible operator in an enforcement or violation since 2013. That is more than a quarter of all 45 violations from 1977 through 2016.

Beyond Alaska, Hilcorp’s fracking operations were blamed for causing 77 earthquakes in Ohio. Its activities were also correlated with earthquakes in Pennsylvania.

On the social responsibility page of the company’s website, it says, “At Hilcorp we care about doing the right thing. Our commitment to environmental and social responsibility is unwavering.”

Hilcorp is headquartered in Houston. Its founder and chief executive, Jeffrey Hildebrand, was No. 123 on Forbes’s list of wealthiest Americans in 2016. He founded the company to buy old oil fields and squeeze whatever remaining profits they could produce. His business plan has paid dividends.

Hilcorp is now the biggest privately held oil and gas company in the country. In the middle of an oil bust in 2015, he gave a $100,000 bonus to each of his 1,400 employees to thank them for helping to double the size of the company in five years, according to Forbes. He and his wife opened up River Oaks Donuts in 2013 in their Houston neighborhood, where the median home price is $1.5 million. The same year, they are believed to have purchased musician and conservationist John Denver’s estate in a secret $8.5 million sale, according to a report in the New York Times. Conservationists had hoped the land would remain protected.