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AOGCC v. Alyeska on access, safety issues Commission argues its inspection right trumps; Alyeska Pipeline Service Co. argues safety trumps, including safety of non employees Kristen Nelson Petroleum News
The Alaska Oil and Gas Conservation Commission has scheduled a hearing on Oct. 11 at 9 a.m. at its Anchorage office on an application by Alyeska Pipeline Service Co. for reconsideration of a June 20 commission notice and order.
In its June 20 order the commission told Alyeska that if it proceeded with “calibrating the provers used for certification of custody transfer meters for Lisburne and Sadlerochit fields” without the presence of a commission inspector, “the current certification of the calibration of the provers will be rendered invalid.”
The commission ordered Alyeska “not to proceed with the calibration of the provers used for certification or in any other way invalidate or tamper with the existing calibrations without the prior approval” of the commission.
A commission inspector is required to be present at the calibration. The issue is whether Alyeska’s new safety requirements for certain work areas, including safety training and participation in its safety protocols, apply to the commission inspector, who is an observer.
In the June 20 order the commission said Alyeska has informed it that its inspector will be “denied access” unless he actively participates in Alyeska’s energy isolation protocols.
“This prerequisite is unacceptable to the Commission,” the order says, and since the commission “is unwilling to waive its presence at the prover calibrations,” it ordered Alyeska not to proceed with the prover calibration.
The participation issue In a June 16 letter to Alyeska’s HSEQ director, AOGCC Chairman Dan Seamount said that Alyeska had advised the commission that “inspectors will not be permitted to witness Pump Station 1 prover calibrations unless and until AOGCC inspectors have first been trained in and agree to participate in Alyeska’s energy isolation protocols.”
“This attempt to regulate the AOGCC’s inspectors is not acceptable to the Commission,” Seamount told Alyeska.
Seamount said AOGCC inspectors have been witnessing “meter proves and prover calibrations” for some 15 years without Alyeska “attempting to impose any requirement that the AOGCC’s inspectors participate in Alyeska’s energy isolation protocols. This approach is consistent with that taken by every other operator in the state,” he said.
Seamount said Alyeska now contends that AOGCC inspectors must, as a prerequisite for inspecting the company’s metering equipment, “take an active role in Alyeska’s energy isolation protocols.” He said the only basis offered is Alyeska’s interpretation of federal regulations.
Seamount said that in a telephonic communication with an energy isolation adviser at OSHA, Commissioner Cathy Foerster was advised that participation in energy isolation protocols “was unnecessary if the only role of the individual was as a witness.”
Labor involved Seamount told Alaska Commissioner of Labor and Workforce Development Click Bishop in an Aug. 18 letter that the commission “does not agree” that Alyeska “or any entity subject to the state’s regulatory powers, may dictate the conditions and circumstances under which staff of a regulatory agency will be permitted to conduct inspections required by law.” Seamount went on to say that the commission does not agree with Alyeska that the “safety of AOGCC inspectors is in any way endangered or compromised by the AOGCC’s refusal to permit APSC to dictate the conditions under which the AOGCC will be permitted to witness the prover calibrations.”
“The role of AOGCC inspectors regarding the certification of meters is limited to that of observer,” Seamount told Bishop.
Bishop’s Aug. 12 letter to Seamount said the Department of Labor and Workforce Development “is tasked with enforcing workplace safety and health standards in Alaska,” an authority which encompasses state employees, and had been notified that an AOGCC inspector sent to participate in the Pump Station 1 prover calibration inspection refused to comply with Alyeska’s “hazardous energy control program.” Bishop said it did not appear that Alyeska was presenting unreasonable barriers to access and noted that Alyeska offered the hazardous energy control program training to AOGCC “well in advance of the inspection date.” And he said Alyeska indicated that in the event of “an emergency or unscheduled law enforcement function, they would not inhibit access and would provide immediate escorted access.”
He said the department’s Alaska Occupational Safety and Health Program is taking steps to comply with Alyeska’s hazardous energy control program to streamline access in routine inspections.
“We recommend that your agency should do the same,” Bishop said.
Application for reconsideration In its application for reconsideration of the commission’s June 20 order, Alyeska said the commission issued the order “without giving Alyeska the benefit of a hearing.”
Alyeska said the “energy isolation protocols” it required the inspector to follow “are required by state and federal law and regulations, contract law, common law and most importantly for safety reasons to protect lives.”
The company said it is “entitled to a hearing before an impartial decision maker” under federal and state constitutions and under state law and regulations.
Alyeska also argued that under state and federal law and regulations it is required to enforce its “energy isolation process.”
The energy isolation policy in Alyeska’s corporate safety manual defines an authorized employee as a person on the company’s premises that may be harmed if energy isolation fails.
The company said that part of the prover calibration process is to isolate any energy and drain the prover. Crude oil is the hazardous energy that needs to be isolated. Crude oil vapors are combustible, Alyeska said, and the hazards of concern during the process are fire, explosions and exposure to crude oil and oil vapors.
A number of people, including representatives of Alyeska’s owners and the AOGCC inspector, are present to inspect and witness the calibration process, and all “could be seriously harmed if the energy isolation failed. They are in the ‘hazard zone’ and within the harm that the OSHA regulation and Alyeska’s EI policy are intended to protect against,” Alyeska said. All the people present at the inspection are treated as authorized employees and required to take the training course.
They are also required to “hang a lock” on an isolation device when they enter a hazard zone and remove it when they leave. “This ensures that the energy isolation device cannot be removed until everyone in the hazard zone as demonstrably left the zone,” Alyeska said.
Confusion in 2010 Alyeska said the AOGCC inspector took the required safety course before the 2010 prover calibration, but “due to some confusion … did not hang a lock on the energy isolation lock box last year. This year Alyeska made it clear that he, like all other witnesses to the prover calibration process, would be required to ‘hang a lock,’” the company said.
Alyeska defined the issue in the case as whether the AOGCC inspector is required to follow the company’s energy isolation policy, and said the policy is mandated by federal regulations, which covers all authorized employees. “Authorized Employees include employees who are inspecting the machine or equipment that is being locked out,” the company said. “Observing an inspection is considered to be inspecting,” Alyeska said, citing a 2006 federal OSHA “interpretive letter.”
The company also said the commission “is impairing Alyeska’s contractual duty to take all measures necessary to protect the health and safety of all persons affected by its activities performed in connection with the operation and maintenance” of the trans-Alaska oil pipeline and is “needlessly jeopardizing the health and safety” of AOGCC employees, citing its right-of-way lease with the State of Alaska and its agreement and grant of right of way with the federal government.
Alyeska said it decided to revamp its “life critical safety” programs about two years ago, including programs for confined space entry, energy isolation and work permitting. It said that governmental agencies with regulatory oversight over Alyeska generally cooperate with the company on its safety programs, citing the federal-state joint pipeline office and the Alaska Department of Environmental Conservation.
The company cited a June 17 letter to Seamount by Alyeska President Tom Barrett which said the issue is not denial of access, but ensuring that procedures designed to protect lives are consistently followed.
In an Aug. 30 order the commission said that because the basis for Alyeska’s application is the commission’s issuance of the June 20 order without a hearing, the commission is treating it as a request for hearing and is granting the request, with notice both to Alyeska and to BP Exploration (Alaska) as representative of Alyeska’s owners.
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