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Vol. 15, No. 46 Week of November 14, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

Oil Patch Insider: BP layoff rumors overstated; owners may see judge promoted

There have been rumors circulating about BP and its contractors laying off a significant number of employees in Alaska.

According to BP’s Alaska spokesman Steve Rinehart those rumors are inaccurate.

On Nov. 9, Rinehart told Petroleum News that normal seasonal layoffs have affected about 110 contractor employees; plus another 30 employees were cut because of a change in how the company does well work. (See related story about BP sale on the bottom of page 1.)

“While a few employees are coming and going all the time, we are not conducting a systematic BPXA staff reduction,” Rinehart said in an e-mail. “As you know, the contractor staffing on the North Slope typically shrinks seasonally in the fall, and this year is no exception. We typically increase contractor staffing for key activities, such as summer plant turn-around maintenance or winter construction. The reduction in North Slope contractor jobs this fall is mainly the result of the end of the summer peak activity season. My best estimate is that this seasonal contractor reduction affected about 110 individuals.”

In addition to the seasonal contraction, Rinehart said, “We have recently changed the way we schedule and conduct some well work. As a result, we need fewer slickline crews, resulting in an estimated reduction of about 30 contractor jobs.”

For information about BP’s capital budget for Alaska in 2011, see the last section in the aforementioned page 1 BP sale article.

—Kay Cashman

I

Alaska pipeline owners might be pulling for judge’s promotion

n the Oct. 31 issue of Petroleum News, we told you about the efforts of the trans-Alaska pipeline owners to replace state Superior Court Judge Sharon Gleason with someone more to their liking.

Gleason is presiding over a high-stakes legal battle concerning the level of property taxes due on the 800-mile pipeline system. In May, after a trial, she put the system’s assessed value at $9.98 billion, way more than the $850 million the owners argued. Gleason’s ruling could mean the owners will have to pony up an extra $113 million in state and municipal property taxes for 2006 alone.

Our story detailed how the pipeline owners — BP, ExxonMobil, ConocoPhillips, Chevron and Koch Industries — are trying to exercise their right under court rules to have another judge assigned to the case.

Well, here’s an interesting angle we failed to mention. It seems the owners might soon be rid of Gleason for another reason entirely.

The presiding judge of the Superior Court in Anchorage, Gleason appears to be a leading candidate to succeed U.S. District Court Judge John W. Sedwick, who is moving to senior status on March 13, 2011.

Among the 19 people who have applied for presidential appointment to the federal judgeship, Gleason ranked third highest in an Alaska Bar Association poll, the Anchorage Daily News reported Oct. 12. Alaska Sens. Mark Begich and Lisa Murkowski will use the poll results to help craft a list of recommendations to send to the White House.

In light of Gleason’s career prospects, it’s interesting to note that the pipeline owners, in an Oct. 19 filing in the tax case, suggest the planned trial of their consolidated 2007, 2008 and 2009 tax appeals be put off a year. Lawyers for the owners complain they don’t have adequate time to prepare for the trial, set to start in the fall of 2011.

The owners previously had asked that the trial be deferred until after the Alaska Supreme Court reviews Gleason’s 2006 tax ruling.

But Gleason shot that down.

—Wesley Loy

Report: White House altered safety report

The Interior Department’s inspector general says the White House edited a drilling safety report in a way that made it falsely appear that scientists and experts supported the idea of the administration’s six-month ban on new drilling.

The inspector general says the editing changes resulted “in the implication that the moratorium recommendation had been peer reviewed.” But it hadn’t been. The scientists were only asked to review new safety measures for offshore drilling.

“There was no intent to mislead the public,” said Kendra Barkoff, a spokeswoman for Interior Secretary Ken Salazar, who also recommended in the May 27 safety report that a moratorium be placed on deepwater oil and gas exploration. “The decision to impose a temporary moratorium on deepwater drilling was made by the secretary, following consultation with colleagues including the White House.”

The Interior Department, after one of the reviewers complained about the inference, promptly issued an apology to the reviewers during a conference call, with a letter and personal meeting in June.

The inspector general’s report, which was originally requested by Louisiana Sen. David Vitter and Rep. Steve Scalise in June, said the administration did not violate federal rules because the executive summary did not say the experts approved the recommendations and the department offered a formal apology and had publicly clarified the nature of the expert review.

But Louisiana Rep. Bill Cassidy, a Republican, said in a statement that the investigation proved “that the blanket drilling moratorium was driven by a politics and not by science.”

“Candidate Obama promised that he would be guided by science, not ideology,” Cassidy said. Cassidy said if that were true thousands of jobs and billions in economic activity would have been preserved on the Gulf coast.

The website Politico was first to report the inspector general’s findings. The Associated Press on Nov. 10 obtained a copy of the report, which has not been publicly released.

—The Associated Press



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