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February 2011

Vol. 16, No. 9 Week of February 27, 2011

State cites Macondo, Slope spills study

DNR commissioner finds substantial new information for Alaska Peninsula, Cook Inlet areawide sales, Susitna exploration license

Kristen Nelson

Petroleum News

The State of Alaska has signaled that it expects changes in how oil and gas operations are conducted in Alaska as a result of the Deepwater Horizon disaster in the Gulf of Mexico last year and the Alaska Department of Environmental Conservation’s risk assessment.

In decisions of substantial new information for the state’s 2011 Alaska Peninsula and Cook Inlet areawide lease sales and for Susitna basin exploration licenses, Commissioner Dan Sullivan of the Alaska Department of Natural Resources ruled in early February that “the Deepwater Horizon incident constitutes substantial new information that justifies supplements to the most recent best interest findings” along with reports out from ADEC on the Alaska Risk Assessment.

An investigation of the Deepwater Horizon, a federal investigation by the U.S. Coast Guard and the Bureau of Ocean Energy Management, Regulation and Enforcement, and a state investigation by the Alaska Oil and Gas Conservation Commission, are ongoing. And there are reports out from the ADEC project assessing risk of oil and gas infrastructure in Alaska, the Alaska Risk Assessment. The North Slope Spills Analysis was completed late last year, compiling and analyzing causal information associated with specific North Slope pipelines and providing recommendations on mitigation measures to reduce future spills, including seven specific recommendations for reducing the risk of future loss-of-integrity spills from North Slope infrastructure. The oversight report produced as a result of the ARA Project provides the State of Alaska with practical recommendations for future oversight activities for oil transportation.

Licensee advisory

The commissioner said that while review of the risk assessment reports is ongoing, some of the recommendations are within the jurisdiction of DNR’s Division of Oil and Gas and “within the scope of lease mitigation measures.”

“For the NSSA Report, although it focuses on pipelines regulated by ADEC on the North Slope, the recommendations from the expert panel have some applicability to all agencies that provide oversight of the oil and gas industry in Alaska. Broadly, the recommendations suggest that the state engage industry more proactively by requiring industry to provide information on how systems integrity is being managed, reviewing that information for understanding and completeness, collecting appropriate data that can be used to determine root cause, and increasing enforcement,” Sullivan said.

The commissioner said “it is very likely that additional mitigation measures or other statutory or regulatory requirements will be implemented within the next year,” and an advisory has been added to the best interest findings.

The licensee advisory says that in light of the review and evaluation of information from the Deepwater Horizon investigations and the ADEC risk assessment reports and a determination of which information and recommendations are applicable to Alaska, “new or modified mitigation measures, lessee advisories, or other statutory or regulatory requirements addressing issues such as safety, environmental safeguards, risk management, and reporting standards may be forthcoming.”

The Alaska Oil and Gas Conservation Commission has a public hearing scheduled for May 11 on whether changes or additions may be needed to its regulations governing drilling, rig workover and well control in offshore and ultra-extended reach wells.

The commission gave notice last June that following the issuance of the Report to the President from the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling that it would convene a public hearing to review and assess the adequacy of Alaska’s relevant statutes and regulations; the National Commission issued its report Jan. 11.






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