Gov. Knowles tightens Alaska's environmental, safety oversight

By the OGJ Online Staff

HOUSTON, Dec. 13 -- Alaska Gov. Tony Knowles has tightened the monitoring of environmental and workplace safety at oil and gas production facilities on the North Slope and Cook Inlet, while streamlining the permitting process.

Knowles said the initiative would cost $4.8 million, of which $1.1 million would be collected under existing industry fees. No new fees are proposed.

The governor, who issued the directive Tuesday, said, "Alaska already boasts the world's safest marine transportation system for oil and we must continue to lead with the highest standards for safety in the oil field and at production facilities. This commitment is not only 'doing it right,' but is the key to future oil and gas development in Alaska."

Knowles said the goal is to ensure Alaska's system for monitoring and permitting the oil and gas industry is "not just adequate, but first-class."

He said evolving industry technology and state vigilance have improved safety and minimized the environmental impacts of oil and gas development over the past 25 years, but conditions are changing. He said pipelines, safety valves, and other infrastructure are aging, while there has been a rapid increase in exploration and development.

Earlier this year, Knowles directed the six state agencies involved in oil and gas permitting and regulation to find ways to improve capabilities in permitting, inspection, and compliance from leasing and exploration to development and production, and closure and remediation.

Knowles said, "This initiative will improve the capacity of state agencies to do their jobs more proactively, more efficiently, and more effectively. It is not a 'gotcha'-based enforcement effort. Rather, it will engage agencies with industry early in the leasing and permitting processes for better planning, better designs, better actions, and fewer problems."

Under the program, the Alaska Oil and Gas Conservation Commission will increase well inspections, testing, and follow-up. The governor said the number of wells in Alaska has increased from less than 1,000 in the early 1980s to over 3,600, yet the commission's staff is the same as it was 20 years ago.

The Department of Environmental Conservation (DEC) will establish a full-time office on the North Slope to increase air and water quality monitoring and inspections, and conduct oil spill preparedness drills. The governor's office said the initiative would also increase DEC�s ability to work with industry on designs and technology that would reduce environmental impacts and make permitting more timely, consistent, and predictable.

The Department of Labor and Workforce Development will increase enforcement of electrical and occupational safety and health codes.

The Department of Public Safety's fire marshal�s office will increase fire and life safety inspections. The governor's office said a recent report by BP PLC confirmed the state�s findings that some fire and gas detection systems at oil and gas facilities need upgrade and maintenance.

The Department of Fish and Game will work more closely with industry on methods to explore, develop, and restore oil field areas to ensure habitat restoration and protection of fish and wildlife

Knowles said many of these actions will benefit industry through faster lease processing, permitting, and more collaborative decision-making.

He said the Department of Natural Resources will process title and lease applications faster to keep pace with increased private sector activity. In 2001 the state leased 1.6 million acres in area-wide sales, the most in 10 years. The governor's office said title work and processing of lease applications have lagged, resulting in delayed payments to the state and delayed exploration for industry.

DEC will reduce the time for processing air and water quality permits and oil spill contingency plans to keep pace with drilling permit applications that have increased 35% over the last 10-year average and are expected to continue at these levels in the future.

DEC has established a team to review of the increased number of contingency plan applications on time, without the interruption of other critical work. The team also will seek ways to improve field verification, inspections, and oil spill drills.

Knowles said, "One of the goals of this initiative is to get people out of the office and into the field, where the hands-on work needs to be done. This will require some reorganization of responsibilities, which may be difficult for some, but we are committed to raise the standard for environmental responsibility and maintaining a positive, 'open for business' attitude."