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Governor creates new oversight agency Lease Monitoring and Engineering Integrity Office will coordinate state, federal, local oversight of oil and gas infrastructure Kristen Nelson Petroleum News
Citing a need for more oversight of oil and gas infrastructure on the North Slope, Alaska Gov. Frank Murkowski signed an administrative order Oct. 6 creating a Lease Monitoring and Engineering Integrity Coordinating Office within the Department of Natural Resources.
LMEICO is charged with coordinating the oil infrastructure oversight efforts of a multitude of state, federal and local agencies stretching from the North Slope fields to the Alyeska Marine Terminal at Valdez. Administrative Order No. 229 says the office will be “the coordinator of state permits, authorizations and oversight of oil and gas leases designed to produce oil and natural gas from State of Alaska land.” The order “covers the permitting, authorization and increased oversight activities on all state oil and gas leases by the departments of Natural Resources, Environmental Conservation, Fish and Game, Transportation and Public Facilities, Labor and Workforce Development and Public Safety.”
Murkowski noted the two recent spills at the Prudhoe Bay field due to corroded transit lines at a press briefing and said that to ensure that doesn’t happen again the state in instituting a cooperative effort with the federal government and the North Slope Borough to improve oversight.
Murkowski reviewed federal government regulatory efforts and said the Alaska Department of Natural Resources would take the lead on the state’s regulatory efforts. The department is “initiating a comprehensive oversight program for all petroleum facilities and activities on state lands,” he said. LMEICO will be established in DNR’s Division of Oil and Gas and the coordinator will pursue memoranda of understanding with federal agencies similar to those which established the federal-state Joint Pipeline Office which oversees the trans-Alaska oil pipeline.
Similar to JPO Natural Resources Commissioner Mike Menge, who has chaired an interagency team charged with responding to the recent pipeline problems, and who was the founding federal official at the federal-state Joint Pipeline Office in the 1980s, said the idea is for all state and federal agencies with regulatory authority to join in a cooperative manner.
One of the issues, he said, is looking at who has authority where. From the North Slope to Valdez a number of state and federal agencies regulate the production and movement of oil.
The Alaska Oil and Gas Conservation Commission has control over the well bore down into the formation, he said, but the problems the state is encountering now are from the well bore to the common carrier line.
LMEICO will bring participants together to evaluate who has what authority and what authority is needed, and then to do “a systematic review of the infrastructure.”
The language in DNR’s oil and gas leases has very broad language covering what is required: “What we’re going to have to do is take that language and convert that into performance standards.”
There are two contracts on the street now: one to assist DNR and other agencies to compile performance standards. The second is to take a look at BP’s quality control program “to make sure that all of the internal processes that should be addressed are being addressed.” Any gaps found in that analysis will then be addressed, he said.
Starting at Prudhoe Bay LMEICO will start at Prudhoe Bay but over time the program will be expanded to all oil and gas production in Alaska; phase two will be other North Slope infrastructure; phase three will be in Cook Inlet.
Menge said the operation would start small and will be expanded to meet needs as they are defined. The new Legislature will have to address the issue of funding for the new organization and in the interim participating agencies will provide personnel and funding.
Menge said LMEICO will perform risk assessments on all petroleum infrastructure on state leases; review all facility designs, operations and maintenance programs and practices for technical competence and consistency with established government and industry standards; and inspect pipelines and facilities on an ongoing basis to document compliance with approved procedures and plans.
The fundamental LEIMCO goal would be “to ensure seamless regulatory oversight of oil and gas infrastructure and operations, from the reservoir through the field to the loading facility for shipment to market,” Menge said in a statement.
Memoranda of understanding and other agreements between the State of Alaska, the North Slope Borough and federal agencies have been drafted and will be signed in the near future.
Menge said he has been in discussions with the North Slope Borough and they will be a “full participant” in LEIMCO.
Conferences set The governor created an Arctic pipeline technology team after the March spill, said Commissioner of Environmental Conservation Kurt Fredriksson, bringing together the best expertise within DEC, DNR and the AOGCC to investigate what happened. The team is also overseeing restart of the field and will oversee the replacement of transit lines.
The team has been involved in investigations, Fredriksson said, and has been involved with the U.S. Department of Transportation and BP in reviewing field restart.
The governor also announced a technology conference, Fredriksson said, and the pipeline technology team has been working on that, with the first conference, on maintenance pigging, set for Oct. 18. The goal is to look at tools “that are used to control corrosion” on pipelines, and since pigging is one of the primary tools, the team decided that maintenance and smart pigging were the most appropriate tools to learn more about, he said. Following the maintenance pigging conference will be a Nov. 13 conference on smart pigging conferences.
Fredriksson said other conferences will follow on other tools that are used to prevent corrosion and monitor the integrity of pipelines.
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