From: Yereth Rosen, Reuters
Published July 20, 2006 12:00 AM

Alaska Regulators Push Tighter Rules after BP Leaks

ANCHORAGE — Alaska regulators Wednesday defended their oversight of BP Plc, but advocated tighter rules after leaks forced the British oil giant to shut down 12 oil wells this week.

The wells shutdown in Alaska's North Slope region is the latest in a series of troubles for BP, still reeling from an estimated 200,000-gallon Prudhoe Bay spill that went undetected for days before being discovered in March.

"Every one of our regulations and orders are enforced strictly on every operator in the state," said Cathy Foerster, an engineer who sits on the three-member Alaska Oil and Gas Conservation Commission. "If BP were violating our regulations, we'd be fining them."

However, state officials are working to tighten rules. The commission plans to rewrite oil field safety-valve regulations in order to address recent changes in field operations and improvements in measuring technology.

Despite the efforts to move to more stringent regulations, a prominent oil industry critic said Alaska regulators are so dependent on industry funding that they ignore or fail to detect safety and environmental breaches.

"They're one-eyed watchdogs fast asleep," said Chuck Hamel, a retired oil broker and patron of whistle-blowers whose complaints about leaking fluids and possible gas releases led BP to shut down the wells.

BP rejected criticism about the state's loose regulations.

"It's known around the world by industry, if not by lay people, that Alaska has absolutely some of the strictest regulations of oil fields in the world," BP spokesman Daren Beaudo said.

BP has a record of run-ins with regulators. Federal officials are conducting a criminal investigation for BP's allegedly lax management of pipeline corrosion that led to the the biggest recorded crude oil spill in the North Slope.

In 2002, an explosion seriously injured a worker and resulted in a $1.3-million fine assessed by the Alaska Oil and Gas Commission. BP also paid a $102,500 fine for an over-pressuring incident at a Prudhoe Bay well.

In 1999, BP pleaded guilty to federal criminal charges concerning illegal waste releases at the Endicott oil field, resulting in a $500,000 fine and five years of probation.

The Alaska Department of Environmental Conservation (DEC) is also writing new regulations for oil-pipeline operations, some stimulated by the Prudhoe Bay oil spill.

New rules that give the state oversight of the oil fields' flow lines and gathering lines are almost complete, a department official said. Those lines, which bring pumped oil to gathering and processing centers, have not been regulated in the past by the state or federal governments.

Further, it is likely Alaska will tighten the state's 1 percent leak-detection standard, which requires companies to have an automated system to detect if 1 percent or more of daily volume of oil escapes.

"We're coming to the conclusion that a one-size-fits-all 1 percent leak-detection standard may not be the most efficacious way to protect the environment," said Craig Wilson, an environmental program specialist with Alaska's DEC.

Source: Reuters

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