Alyeska Pipeline to Cut 130 Workers

Alaska’s main oil pipeline will reduce its workforce by 10 percent starting this fall, a move that will affect all activities statewide, according to the company’s top executive.

Alyeska Pipeline Service Co., which manages the 800-mile trans-Alaska pipeline and the oil-loading terminal in Valdez, will cut 10 percent of its workforce to operate more efficiently, according to a letter from company president Tom Barrett this week.

“Going into our fifth decade of service, we are simplifying the maintenance processes to better identify high-priority work and apply risk-based decision criteria to complete that urgent work, as well as other maintenance work, more quickly and efficiently,” Barrett said in the letter sent to the governor and lawmakers.

Alyeska employs about 1,300 direct workers and contractors on the pipeline system, said spokeswoman Michelle Egan. About 130 jobs will be cut.

The reorganization will continue through early next year. Alyeska will notify employees in November about how the changes will affect them, the letter said.

It’s not clear yet how the job cuts will be split between workers in the field and office positions like those in Anchorage.

“These changes will directly and indirectly impact most jobs on TAPS,” Barrett wrote. “Many jobs will be modified, and some eliminated, at Alyeska and in some contractor companies. This will have negative impacts for some individuals and create new opportunities for others. It will affect personnel at all levels of the organization, and at Anchorage, Fairbanks, Valdez and field locations.”

Alaska has the USA’s highest unemployment rate at 6.9 percent in July, according to the Department of Labor.

“These are great jobs” that will be lost, some of the top-paying in the state, Neal Fried, a state economist, told the Alaska Daily News.

But the planned reductions come as oil industry employment has begun to stabilize in Alaska amid rebounding oil prices, after the North Slope industry shed almost 5,000 jobs from a record 13,500 in 2015, Fried said.

Recovering oil prices have bolstered earnings at Alyeska Pipeline owners BP, ConocoPhillips and ExxonMobil, the major oil producers in Alaska. The companies have worked to reduce costs as they streamlined operations and acquired new technology.

Photo by Alyeska Pipeline Service Company’s Dave Luke.