State reviews rules on petroleum safety

Posted: Wednesday, July 28, 2010

Alaska state agencies have been reviewing the rules and regulations regarding the petroleum industry for some time, but the reviews now have an added urgency because of the Gulf of Mexico well blowout and oil spill.

The Alaska Oil and Gas Conservation Commission issued new rules July 14 on well safety valves that are mainly meant to standardize previous safety valve rules -- the various fields had different rules -- but also tightened up regulations to increase safety, according to AOGCC Commissioner Cathy Foerster.

Meanwhile, the state's Petroleum Systems Integrity Office, or PSIO, a part of the Division of Oil and Gas, is set to complete an analysis on regulatory gaps in state oversight of the state's petroleum infrastructure in September, said Allison Iverson, director of the PSIO.

Foerster said the oil and gas commission has not seen issues with well safety valves, but was concerned about a balkanization of rules that have come about over time with varying regulations applied in conservation orders for specific pools.

"As the North Slope industry has become more complex, we have different pools being tapped by wells on the same production pad, all with different rules. This is an effort to streamline things to make it more efficient for the well operators," Foerster said.

It also eliminates risk of human errors, she said.

The broader review of state regulation headed by PSIO began after 2006 oil spills caused by corrosion in Prudhoe Bay field pipelines but has been given added urgency since the Gulf spill. All Alaska agencies with regulatory authority on the industry are now reviewing safety and inspection procedures.

In the 2006 spills, it came to light that no state or federal agency was inspecting critical infrastructure like in-field pipelines and flow lines. Some of the gaps have been fixed, but the analysis now being completed has identified 30 other areas where gaps remain, said Iverson.

Two findings so far are that the state has limited jurisdiction and oversight of the offshore producing pipelines in Cook Inlet, and limited oversight on non-crude oil pipelines, Iverson said.

Another key finding is that state agencies which regulate the industry use different inspection procedures and there are regional differences in procedures even within the same agency, she said.

"There is a lack of process for inspections, and the way agencies do inspections vary even between regions. There are some which are detailed in their risk-ranking, like the (state) Department of Labor and the Alaska Oil and Gas Conservation Commission, and others which are more ad hoc," Iverson said.

There is no information-sharing mechanism where details on problems identified by one agency are shared with another. One of the outcomes of the study will be establishment of a database and a central system to sharing notes and observations that will be of interest to several agencies.

"We all have to break out of our silos," Iverson said.

The final stage of the analysis is focusing on which of the 30 regulatory gaps identified should have priority and can be resolved in six to 12 months, she said.

A related analysis by the state Department of Environmental Conservation of past oil spills and their causes is due out in at the end of July, she said.

The state DEC has jurisdiction over industry spill prevention and response, while the Department of Natural Resources, which manages state-owned lands, has broader authority to ensure facilities on state oil and gas leases are kept in proper working order, Iverson said.

The state PSIO was created by administrative order in April 2007. The group is not an inspection or permitting agency, although it does participate in investigations by other agencies, but rather coordinates oversight of other agencies to ensure there are no gaps, Iverson said.

The group also works to encourage the adoption of quality management practices by operating companies and reviews quality management plans.

Besides Iverson, who is an attorney, the PSIO staff includes Mike Engblom-Bradley, a former quality management director at Alyeska Pipeline Service Co.; Melanie Myles, a mechanical engineer who was recently at NANA and at Alyeska prior to that; Marie Steele, an engineer who was previously part of DEC's corrosion team; Darcy Harris, a natural resource specialist formerly with the state Joint Pipeline Office; and Tim Jones, a natural resource specialist.

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