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Palin signs PSIO administrative order
Kristen Nelson Petroleum News
Alaska Gov. Sarah Palin signed an administrative order April 18 creating the Petroleum Systems Integrity Office and repealing the administrative order signed by former Gov. Frank Murkowski in October which established the Lease Monitoring and Engineering Integrity Office modeled on the Joint Pipeline Office.
The governor said that the “signing of administrative order number 234 … creates an office that will ensure the integrity of oil and gas systems in Alaska.”
“PSIO coordinates the state’s permitting and compliance functions into an independent office within the Division of Oil and Gas, with specific responsibilities and authorities for interagency coordination,” she said. PSIO doesn’t replace existing authorities but “provides enhanced and more flexible oversight with the goal of ensuring the integrity of oil and gas systems and infrastructure,” Palin said.
“The goal here is to search for any gaps in laws or regulations and agency or industry practices that threaten systems integrity. If existing authorities can’t step up to the plate — won’t step up to the plate — we’ll exercise appropriate oversight using our authority” as landowner through our leases, the governor said.
The order names the commissioner of the Department of Natural Resources as coordinator “of oversight of facilities, equipment, infrastructure and activities” used to explore for, produce and transport oil and natural gas “from, across or within state oil and natural gas units or leases.”
Both houses of the Legislature have already approved $1.5 million for the PSIO in the operating budget.
Irwin: enlightened self interest didn’t work DNR Commissioner Tom Irwin said that in the past the state relied on the enlightened self interest of field operators to ensure prudent maintenance practices.
“History shows us that didn’t work,” Irwin said, and some watershed events have hurt the state with production reduction.
He said the LMEICO model under the previous administration included DNR doing consolidated budgeting and that isn’t included in PSIO. Individual departments are much better at doing their own budgets, he said.
The PSIO is a more cost-effective way of establishing this oversight by ensuring that state agencies work together, he said.
Irwin said a gap analysis is already under way to make sure all areas of oversight are covered — and to make sure there is no overlap.
The next step, he said, is requirement for state approval of quality assurance programs at Prudhoe Bay; that will be followed by compliance inspections for the quality assurance programs.
Irwin said Alaska is “the only state in the nation that has taken it this far.”
Department of Environmental Conservation Commissioner Larry Hartig said the state’s oil and gas development and transportation systems are complex and events in one area affect others, “so a fragmented regulatory approach to oversight of these systems is not the way to go.
“PSIO fixes that problem,” he said. There are two important elements: “a systematic, integrated and thorough approach to the agencies’ oversight of a pipeline facility and it requires a mandate that the agencies talk with each other and that they share their information and that they do this through one entity, the PSIO.”
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