President's Message
Kevin Hostler, President and CEO

Planning for Success in 2006

In preparing for my first full year at Alyeska, I have outlined an aggressive yet attainable set of goals for 2006. Our focus: the execution of our core business – safety, reliability, environmental performance. Meeting our schedule and commitments on the Strategic Reconfiguration project and managing our expenses will also be included on our report card for 2006.

We talk a lot about managing costs and efficiencies in our business. This is more than just figuring out ways to reduce spending. It's really about executing our work commitments with precision. This concept is also what will move the marker for us on safety performance. If we focus the right energy on planning and then properly execute that plan, we will move our company to top quartile performance.

We have set a goal of achieving best in class in our safety performance for 2006. So what does this mean? Essentially it means we would like to outperform our industry peers in how we measure ourselves in safety. In the last two years, Alyeska has accomplished its safest record since it started tracking OSHA recordable rates. And although we are proud of the improvement, the fact remains that people are still getting hurt. Our ultimate goal is to have nobody get hurt and for that reason, Alyeska is approaching safety this year with “Target Zero.” This approach to safety challenges Alyeska’s safety culture and requires every TAPS worker to take personal responsibility for assuring that we mitigate or eliminate unsafe workplace conditions.

Our company objectives regarding reconfiguration and business improvement are about creating a better company for the future that responds to the reality of the global business environment. We have an aging infrastructure, we're faced with declining throughput, and we operate in a competitive environment for resources. This reality has to be factored into our long term decisions for the business. We want to make the right improvements and decisions without negatively impacting our commitment to safe operations, environmental performance, and regulatory compliance.

We will also continue to look at improving our integrity management program, which is the way we mitigate risk to the physical assets, i.e. the pipeline, operating equipment and our maintenance plans. This program must continue to evolve to meet new requirements from our regulators.