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Providing coverage of Alaska and northern Canada's oil and gas industry
May 2007

Vol. 12, No. 18 Week of May 06, 2007

Governor asks for O&G assessment

Asks Alaska Legislature for $5M, infrastructure assessment for DNR’s new Petroleum Systems Integrity Office would be done by DEC

Kristen Nelson

Petroleum News

Alaska Gov. Sarah Palin is asking the Legislature for $5 million to fund a comprehensive assessment of the condition of Alaska’s oil and gas infrastructure.

“For our new Petroleum Systems Integrity Office to do an effective job, it must have access to comprehensive, thorough and objective assessment data to tell us the status of the infrastructure and what it should be,” the governor said in a May 1 statement. “No such system-wide risk assessment has ever been conducted of this complex system.”

Palin established PSIO April 18 by administrative order. It is an independent office inside the Department of Natural Resources’ Division of Oil and Gas and will coordinate the state’s permitting, oversight and compliance functions with other agencies.

PSIO requires industry to establish and maintain quality assurance programs and requires the state to inspect facilities to ensure operators comply with those programs.

The infrastructure assessment the governor announced May 1 will be done by the Department of Environmental Conservation.

“Good management requires that we understand the current state of the infrastructure,” said DEC Commissioner Larry Hartig. “We need to know what’s in good shape, what’s not and where and how serious the risks are. A risk assessment is a structured process designed to answer those sorts of questions.”

Department of Natural Resources Commissioner Tom Irwin said: “The assessment will provide a firm foundation for PSIO’s work. This is a critical step in facilitating the protection not only of our environment but of our economy.”

Assessment would take 2-3 years

The assessment is expected to take two to three years to complete and would be funded by a one-time capital budget request of $5 million.

Larry Dietrick, Director of the Division of Spill Prevention and Response at DEC, told Petroleum News that the first step “will be a scoping process to determine specifically what will be included in the assessment.” Where the assessment will start — in a particular location or with a specific type of facility — will also be determined in the scoping step, Dietrick said.

After the scoping step, the risk assessment “will be independently conducted by a nationally recognized contractor,” he said.

Dietrick said that if the assessment is approved by the Legislature the funding would be available July 1 and the initial work would begin shortly thereafter.

In describing the reason for the assessment the governor’s office said Alaska’s oil and gas infrastructure comprises a complex, integrated system and over the years new parts have been added and older parts modernized. Changes have been made to increase efficiency and production, to improve integrity and to adapt to changes in field characteristics. At the same time there have been advancements in oil and gas science and technology. The current state of the infrastructure is a result of the combined effects of age, change, industry operations and government oversight.






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