Apr. 26--When Mount Redoubt began erupting last month, the nearby Drift River oil terminal suddenly emerged from the obscurity of a low-key industrial facility to the potential source of an environmental disaster on the scale of the Exxon Valdez.

And with its place in the spotlight came an obvious question: How could such a hazardous facility have been built there, just 22 miles from Redoubt's cone?

"That is the most consistent question I hear on the street," said Bob Shavelson, executive director of the environmental watchdog group Cook Inletkeeper. "The everyday, walking-around person scratches their head when they hear there's an oil terminal at the base of an active volcano."

The precise details of why it's there are lost in the haze of history. The current owners, Chevron-managed Cook Inlet Pipe Line Co., say they inherited the facility in 2005 when Chevron bought out Unocal, the prior operator, and don't know its full history. State records show that officials from Mobil, one of Cook Inlet Pipe Line's original owners, initiated the purchase and lease of two state land parcels for the terminal in early 1966.

A workaday storage and transit facility for crude oil, tiny by comparison with industrial monsters like the Valdez terminal and accessible only by air or boat, Drift River usually operates with routine monotony. The oil comes in from platforms in Cook Inlet. The oil goes out in the hulls of tankers.

State records show it received its first permits in 1966 and was licensed to operate in 1967, but there's no record of a public discussion of the facility. The state file of its 55-year tidelands lease to Cook Inlet Pipe Line has not a single word justifying the use of that particular site. The modern environmental movement was just dawning then, and it would be three years before President Richard Nixon would sign the National Environmental Policy Act with its requirement for a detailed impact statement -- including alternatives -- on projects like Drift River.

Kevin Banks, director of the state's Oil & Gas Division, said the question of why the oil terminal was built at the foot of an active volcano has been the talk of his office too. While the risks are now obvious, it's easy to see the advantages of Drift River, he said. The land there is flat, the beach heads straight into the Inlet, then drops off. The Christy Lee platform, a loading dock a mile offshore in deep water, connects to the terminal by pipeline.

"You have to go miles (offshore) before it drops off -- everywhere except at Drift River," Banks said.

Walt Parker, a retired state transportation and oil official, said Drift River "was the first place they could get reasonable size tankers into" going south from the oil fields.

John Norman, a member of the Alaska Oil & Gas Conservation Commission with long involvement in the industry as an attorney, said that in the 1960s the state was so hungry for economic development that it sometimes accepted projects without question.

State land records show Cook Inlet Pipe Line bought 898 acres for the terminal for $36,000 on April 26, 1966. A separate lease governing 392 acres of adjacent tidelands for access and pipelines initially cost the company $500 a year when it was signed June 13, 1966. The current annual rent is $5,750. The lease expires in 2021.

At the time of its charter in 1966, the Cook Inlet Pipe Line was owned by Mobil, Unocal, Marathon and Atlantic Richfield.

Larry Smith, a long-term Homer activist who served on the federally chartered Cook Inlet Regional Citizens Advisory Committee when it was founded after the Exxon Valdez spill, said the Drift River terminal completely escaped his notice when it was built.

"There weren't any questions about it," he said.

Now that the terminal is in place and the Cook Inlet oil fields are in decline, it would be uneconomical to relocate the facility, said Santana Gonzalez, a spokesman for Cook Inlet Pipe Line Co.

"Several options are being studied but we cannot get into that at this time," he said in an e-mail message.

Petty Officer Sara Francis, spokeswoman for the Coast Guard, one of the facility's regulators, said the owners are considering a workaround that would keep it open but would dismantle the current tanks. In their place would be a new tank and pumping system that could empty the tanks quickly in an emergency, she said. Now, the pump intakes are above the bottom of the tanks and there's no easy way to drain them dry.

GUSHER OF MUD

When the Cook Inlet fields were in their prime in the 1970s, tankers would call at Christy Lee every other day. They'd sometimes be backed up in the lower Inlet for a chance to load. With production outstripping the capacity of local refineries, they'd frequently haul their cargo to the Lower 48 and sometimes to Asia.