Knowles wants more money for oil and gas oversight

Posted: Thursday, December 13, 2001

JUNEAU (AP) -- Gov. Tony Knowles wants $4.8 million more to strengthen oversight of Alaska's aging oil facilities and streamline new oil and gas exploration.

The governor outlined a plan on Wednesday to ask the Legislature for $3.7 million to add 30 staff positions to the six state agencies that oversee the industries. Another $1.1 million would be raised from fees paid by oil and gas companies, he said.

The request comes amid growing concern from oil industry critics and Congress over safety at the North Slope oil production facilities. Testing over a 16-month period on surface safety valves recently showed an excessive rate of failures.

Knowles wants more state inspections but said ''this is not a 'gotcha-based' environment effort,'' adding that he wants to decrease the backlog in leasing and permitting.

''We have to get out of the paperwork business and get into the field,'' Knowles said.

The initiative would add 17 new positions within the Department of Environmental Conservation and the Alaska Oil and Gas Conservation Commission, two state agencies primarily charged with inspecting oil and gas operations.

Another 10 positions would be added to the agencies by contractual services under the proposal.

The departments of Natural Resources, Fish and Game, Labor and Public Safety would also see staffing increases. And DEC would open a new North Slope field office to increase air and water quality testing and conduct oil spill response drills.

Chuck Hamel, a spokesman for BP workers and a frequent critic of the industry, said the plan demonstrates shortcomings in the state's oversight of the industry.

Hamel is considering filing a lawsuit to force the U.S. Environmental Protection Agency to assume control of monitoring the North Slope operations, he said.

''The state oversight is sorely lacking. The companies are able to operate in darkness up there,'' Hamel said.

Earlier this year, BP Exploration (Alaska) Inc. ordered a wide ranging review of safety, maintenance and environmental protection at the Prudhoe Bay oil fields following workers concerns.

The company, which operates the North Slope fields with Phillips as part of a consortium that includes Exxon Mobil Corp., planned to spend $150 million to boost maintenance and install new fire suppression systems.

BP has had some discussions with the Knowles administration about his plans but has not reviewed the proposal, said spokesman Ronnie Chappell.

Meanwhile, he said the company has begun making improvements in its systems.

A report from the Alaska Oil and Gas Conservation Commission showed that of 308 tests on North Slope drill pad safety valve components 43 had failure rates higher than 10 percent. The report examined tests between January 2000 and April 2001.

The valves sit on top of hundreds of oil wells at Prudhoe Bay and are designed to close automatically when sensors detect a drop in pressure.

That rate has since been significantly reduced, Chappell said.

Knowles said the number of wells has increased from 1,000 in the 1980s to more than 3,600 in 2001. But the number of AOGCC employees has not risen. He also said drilling permit applications have increased 35 percent in 10 years and the DEC has not been able to keep pace.

Knowles said leases take 10 months to process and the backlog of 234 shallow gas applications is ''unacceptable.''

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