ANCHORAGE, Alaska (Reuters) - Alaska Gov. Frank Murkowski announced on Friday the creation of a new state agency to oversee oil and gas infrastructure as a response to the widespread pipeline corrosion that partially shut the giant Prudhoe Bay oil field in August.
The new agency, called the Lease Monitoring and Engineering Integrity Coordinating Office, will oversee oil-field operations to ensure that oil companies are complying with the safety requirements written into their state leases, Murkowski said.
It will conduct comprehensive monitoring that was lacking when BP Plc discovered an oil spill from a corroded pipeline at its Prudhoe Bay facility and shut half of the field's normal 400,000-barrel-per-day output, he said.
"At any development of any size there's a certain risk, and there's a prudence associated with the risk," Murkowski said. "What we've done is to try to monitor, which will reduce the possibility of another occurrence."
The spill and partial shutdown at Prudhoe Bay followed the discovery of around 200,000 gallons of spilled oil, the biggest recorded oil spill in Alaska's North Slope region, from a hole in a separate Prudhoe Bay transit line.
Mike Menge, commissioner of the state Department of Natural Resources, said the agency will be similar to the Joint Pipeline Office, the consortium of federal and state agencies that oversee the Trans Alaska Pipeline.
The new state agency will first monitor operations at the Prudhoe Bay oil field and later at other North Slope oil fields and operations on the Cook Inlet, Menge said.
Murkowski will leave office in December after losing in the August GOP primary. Nonetheless, the administration plans to submit a request to the legislature to fund the new agency.
BP's spills and corrosion management are currently being investigated for potential criminal and civil sanctions by federal and state authorities.
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