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AOGCC kicks meter issue to producers Alyeska not an operator for purposes of commission’s statutes and regulations; field operator must notify AOGCC before calibration Kristen Nelson Petroleum News
The Alaska Oil and Gas Conservation Commission has modified a June notice and order in which it told Alyeska Pipeline Service Co. “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 AOGCC.”
That order was in response to Alyeska’s assertion that it would not permit a commission inspector to witness the calibration unless the inspector complied with Alyeska’s energy isolation protocols.
In a Nov. 7 order on reconsideration the commission redirected its order from the pipeline operator to the Prudhoe Bay field operator.
Commission inspectors witness tests of lease automatic custody transfer, or LACT meters, which measure oil going into pipelines — important to the state since it collects royalties based on production volumes.
The meter inside a metering building at Pump Station 1 is the only one where this issue has arisen; other meters where commission inspectors witness tests are not located in buildings controlled by Alyeska.
At an Oct. 11 hearing Alyeska focused on its requirement that inspectors follow the company’s safety protocols as both a safety issue and a requirement of the federal Occupational Safety and Health Administration.
Regulating the regulators In correspondence prior to the hearing Dan Seamount, the commission chair, called Alyeska’s requirement that inspectors be trained in and participate in Alyeska’s energy isolation protocols as a condition of witnessing meter calibration an attempt to regulate AOGCC’s inspectors and said that is not acceptable to the commission.
Seamount said that its inspectors have been witnessing meter calibrations for some 15 years without Alyeska attempting to impose requirements that inspectors participate in its energy isolation protocols; no other operators have that requirement for witnessing meter calibrations, he said.
The only basis offered by Alyeska is Alyeska’s interpretation of federal regulations, Seamount said, adding that Commissioner Cathy Foerster was told in a phone conversation with an energy isolation advisor at OSHA that participation in energy isolation protocols was not necessary if the individual was only a witness.
BP agrees with commission At the Oct. 11 hearing a BP Exploration (Alaska) attorney, Randall Buckendorf, told the commission that BP disagrees with Alyeska. He said BP takes the position that it can ask regulators to comply — by asking state and federal agency personnel to drive safely at its fields, for example — but does not believe it can mandate compliance with the company’s safety standards.
BP, the operator of the Prudhoe Bay field, is also, at 47 percent, the largest of the owners of the trans-Alaska oil pipeline system, which is managed for the owners by Alyeska; other owners are ConocoPhillips, ExxonMobil, Unocal Pipeline and Koch Alaska Pipeline.
Questioned about the commission’s regulations at the hearing by Commissioner Foerster, Alyeska officials said they were not familiar with the commission’s regulations.
The commission also discussed with Buckendorf the ownership of the meter in question.
Commissioner John Norman asked why the meter needed to be where it is located. Buckendorf said there were plans to replace the meter but said that relocating it would be costly.
Order on reconsideration The commission said in its Nov. 7 order that evidence at the hearing “established that Alyeska is not the ‘operator’ for purposes of the AOGCC’s statutes and regulations.”
In the order on reconsideration the commission said it “is unwilling to waive its presence at the prover calibrations,” and said if the operator of the Lisburne and Sadlerochit (the main reservoir at Prudhoe Bay) fields (BP Exploration Alaska), “proceeds with the calibrations or permits a third party to proceed with the calibrations, the current certification of the calibration of the provers will be rendered invalid.”
The commission said the operator of the fields is not to proceed with calibration of the provers without AOGCC’s prior approval.
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