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Web posted Sunday, September 16, 2007

State integrity office investigates BP practices on Slope

By Tim Bradner
Alaska Journal of Commerce


  The Lisburne production facility in Prudhoe Bay experienced a small fire this month, prompting Gov. Sarah Palin to call for a special investigation of BP Exploration (Alaska) Inc.'s operations. BP operates the facility. Photo/Melissa Campbell/AJOC    
Gov. Sarah Palin and state Resources Commissioner Tom Irwin have ordered the state's new Petroleum Systems Integrity Office to conduct a special investigation of a series of small fires in BP Exploration (Alaska) Inc.'s North Slope production facilities, the governor and Irwin announced in a Sept. 11 press conference.

Palin in April created the PSIO as a part of the Division of Oil and Gas to do increased oversight on the mechanical integrity and safety of oil and gas production facilities.

A fire Sept. 10 at the BP-operated Lisburne production facility was safely contained and properly reported, Irwin said. But the state is concerned that a series of similar incidents have happened over the last five weeks.

Palin attended the press conference with Irwin.

“Four fires in one month is too many. We are concerned that there may be a pattern developing,” the governor said.

The fire occurred as a tank was being depressurized at the Lisburne facility, Irwin said. Safety systems worked as intended. However, the state is concerned about whether a pattern is developing and will investigate the company's management practices.

There were no injuries at any of the fires but at the first of the four incidents, an Aug. 6 fire at Gathering Center 1, there was a temporary loss of 5,000 barrels per day of production, Irwin said. That has since been partially restored.

The other incidents include a small fire Aug. 10 at the BP-operated Badami field 25 miles east of Prudhoe Bay and a small fire at Flow Station 3 in the Prudhoe Bay field. The Sept. 10 fire at the Lisburne plant is the fourth incident.

Irwin said BP followed proper procedures in notifying the state fire marshal's office immediately. But he said other agencies, including the state Department of Natural Resources and the PSIO, were notified a day later, on Sept. 11. The commissioner said he will ask BP to notify the PSIO immediately of incidents in the future.

The agency is the nation's first that will be responsible for comprehensive oversight of petroleum production facilities, although other agencies, including the state fire marshal and the Department of Environmental Conservation, now inspect some oil and gas facilities.

Bruce Anders, head of the Department of Natural Resources' leasing and permitting section, said the PSIO is now staffed with three full-time state officials who will work with other DNR field staff who are engaged in permitting work.

Anders said Dan Rice, recruited from the state-federal Joint Pipeline Office, is now on the PSIO staff under its manager, Jonne Slemons, along with Steve Schmitz, who will continue in a previous DNR job supervising permitting for industry activity on the North Slope. Rice and Schmitz are both veteran agency managers.

A project Rice has undertaken is a “gap analysis” of various state agency authorities over North Slope facilities, to determine where overlaps and duplication occur and what gaps in oversight exist.

“It's a complex area and it will take some time. We expect an initial screening to be done in a matter of weeks, but the entire analysis will take several months,” Anders said.

Meanwhile, the oil and gas division is still considering how it will work with the industry in its new role. The state prefers to assume a preventative role, working with companies on their maintenance and quality assurance plans, and not in a “reactive” role, responding to events after they have occurred, Anders said.

Tim Bradner can be reached at tim.bradner@alaskajournal.com.

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