Edison Chouest to build new vessels to take over SERVS contract

  • A trio of tugs operated by Crowley Marine Services escorts the Polar Alaska oil tanker out of Prince William Sound in this courtesy photo. After 25 years operating the ship escort-response vessel system, or SERVS, contract for Alyeska Pipeline Services Co., Crowley will work over the next two years to pass the contract to Edison Chouest Offshore. Photo/Courtesy/Crowley Marine Services

Edison Chouest Offshore will be adding new vessels to its fleet when it takes over the oil tanker escort and spill response duties out of Valdez in July 2018.

Linda Leary, president of Edison Chouest Alaska subsidiary Fairweather LLC, wrote in response to questions from the Journal that the maritime services provider parent company plans to take advantage of its in-house shipbuilding capabilities to execute its 10-year ship escort-response vessel system, or SERVS, contract with Aleyska Pipeline Service Co.

Louisiana-based Edison Chouest announced in early June that it was selected by Alyeska to provide tanker escort and spill response services in Prince William Sound. The company will take over for Crowley Marine Services after a detailed two-year transition process.

“(Edison Chouest) will be building new state-of-the-art tugs and new response barges for SERVS Prince William Sound operations. These tugs and barges will include the latest technology and comply with the latest regulations,” Leary wrote.

The company owns five shipyards along the East and Gulf coasts from Virginia to Louisiana that allow it to build “mission-specific” craft, Leary added.

Crowley has provided tanker docking services in Valdez since the startup of the Trans-Alaska Pipeline System in 1977. It added the Prince William Sound escort and spill response duties to its work in 1990, a year after the Exxon Valdez oil spill.

Since then, Crowley has executed the SERVS contract virtually without issue.

In February, Crowley announced it had gone 7 million work hours, or about six years, without a lost time injury in its Valdez operations.

Alyeska Pipeline Service Co., which is owned by the “big three” North Slope producers BP, ConocoPhillips and ExxonMobil, manages TAPS operations and oversees the associated oil tanker activities in Prince William Sound.

Alyeska spokeswoman Michelle Egan said cost was a factor in deciding to make the change from Crowley to Edison Chouest, but also noted the companies were “very, very close on cost” in their bids. She said the complexity of the contract makes it impossible to narrow the selection to a single issue.

“One of the things that was particularly appealing about Edison Chouest was the new equipment that they plan to bring into the system — more modern technology, new vessels and then of course just their expertise and experience,” Egan said in an interview.

She said Alyeska is obviously aware of and factored Edison Chouest’s involvement in the grounding of the Shell drill rig Kulluk during a winter storm near Kodiak Island late in 2012 into its decision.

A 2014 U.S. Coast Guard report on the incident determined design flaws in Edison’s tow vessel caused fuel system issues that caused all four of the tug’s engines to fail and contributed to the grounding. However, most of the blame was placed on Shell for instructing Edison make the tow from Dutch Harbor to Seattle despite a significant storm forecast in the Gulf of Alaska.

“Every company has events in its history and what’s really important is what gets learned and applied from those events and then also the overall record of the company and Edison Chouest has a superior (performance) record relative to its industry,” Egan said.

“We look at it holistically.”

Specific information regarding the new vessels and equipment won’t be made public at least until the SERVS contract between Alyeska and Edison Chouest is finalized. That is expected to happen later this summer, according to Egan.

She noted that Crowley and Edison Chouest work cooperatively in other areas and said Alyeska does not foresee any significant issues during the two-year transition process from one SERVS operator to the next.

According to Leary, Alyeska is developing a transition plan to integrate Edison Chouest personnel and equipment into existing operations over the next two years.

“(The transition plan) will include specific milestones and areas of focus like vessel construction and assurance, contingency plan compliance, personnel training, regulatory and stakeholder engagement and operational continuity,” Leary wrote to the Journal.

“Both Edison Chouest Offshore and Crowley will be active partners in the process, and both have committed to a thorough and professional transition.”

Florida-based Crowley CEO Tom Crowley said in a release when the company announced it was unsuccessful in its bid to renew the SERVS contract that the company will “continue to work constructively” with Alyeska until its current contract expires in 2018.

“Crowley and Alyeska agree that there is nothing more important than the continued protection of Prince William Sound,” Crowley said.

The Prince William Sound oil spill response contingency plan, managed by the state Department of Environmental Conservation, sets mandates for much of the SERVS contract and should quell fears by some about a new company in the mix, Egan said.

“It’s not like a new operator can come in and do things in a completely different fashion,” she said.

Additionally, Alyeska has a continuous and “pretty rigorous” improvement process for all of its contractors, she said.

Prince William Sound Regional Citizens’ Advisory Council Executive Director Donna Schantz said the SERVS contract selection process was tightly held and confidential. However, Schantz also said it is not in the council’s purview to recommend which contractors Alyeska should chose.

The Prince William Sound Regional Citizens’ Advisory Council was established at the behest of a group of Cordova fisherman shortly after the Exxon Valdez spill in 1989 as a means to improve communication between the public and Alyeska. The 1990 federal Oil Pollution Act mandated the formation of citizens’ councils in Prince William Sound and Cook Inlet.

While the nonprofit occasionally receives grant funding, it is almost exclusively funded by Alyeska Pipeline Service Co., at about $3.5 million in recent years, according to the council’s financial records.

Schantz described the Prince William Sound Council’s relationship with Crowley as “very positive” and said she expects that to continue with Edison Chouest.

The council will have a role in the transition, but has not yet been told what the specifics of that role will be, she said.

“We’re going to be doing whatever we can to put together a prioritized list of what we would like to see tested to verify (Edison’s) crew capabilities — basically pre-qualify the crews before the change happens and just make sure that the level of care is maintained,” Schantz said. “We have very high standards here for prevention and response in Prince William Sound and the services this contract provides are key oil spill prevention and response measures. It’s so important that we maintain the high standards.”

Crowley has about 250 employees in Valdez and operates 17 vessels for the SERVS contract.

Leary described having crews based in Valdez as “critical” to Edison’s success under the SERVS contract.

“Our crews will consist of qualified and experienced mariners with tractor tug and escort experience including local personnel, Alaska Natives and (Edison Chouest Offshore) mariners,” she wrote. “Our goal is to provide training and opportunity to develop local, Alaskan crews.”

Several maritime unions have loudly criticized Alyeska for changing SERVS operators in spite of Crowley’s successful track record.

Democratic candidate for the U.S. House of Representatives Steve Lindbeck has also highlighted that incumbent Republican Rep. Don Young has received nearly $300,000 in campaign donations from Edison Chouest and its related companies over the past decade.

Through his office, Young has said it’s not appropriate for him to express an opinion on contracts between private companies.

Schantz said the advisory council is simply concentrating on protecting Prince William Sound regardless of the SERVS operator.

“Our focus is on escorting tankers in Prince William Sound and preventing and responding to an oil spill,” Schantz said. “I know there’s been a lot of talk from the unions and others but I’m not sure that’s very productive at this point. We need to kind of wait and see what’s going to be proposed and then move forward to make sure we can have the best system we can.”

Elwood Brehmer can be reached at [email protected].

07/06/2016 - 6:52pm