Alaska regulators face blame in Prudhoe Bay woes - Yahoo! News

ANCHORAGE, Alaska (Reuters) - The state of Alaska is facing the blame along with BP Plc for the oil giant's pipeline corrosion that caused a pair of oil spills and a partial shutdown of the Prudhoe Bay oil field.
Critics say the state consistently failed in past years to adequately police the oil and gas fields that provide most of the state's operating revenue. BP is under criminal and civil investigation for its role in the pipeline corrosion.
"The state has clearly been reluctant to use its enforcement powers, to the detriment of safe operations," said Richard Fineberg, a Fairbanks, Alaska-based economist.
Of immediate concern is the state's failure to require BP's full adherence to a four-year-old order that could have prevented the Prudhoe Bay pipeline corrosion.
The U.S. House of Representatives' Energy and Commerce Committee earlier this month demanded an explanation of why one element of the compliance order -- a mandate that BP clean sediment from its Prudhoe Bay transit lines -- was waived.
The compliance order, signed in May 2002, found that BP had violated state oil-spill-prevention standards. It fined the company $300,000 and ordered several tasks to install new leak-detection systems in the Prudhoe Bay transit lines.
It also called for use of a cleaning pig, a device that scrapes residue from inside, in at least one section of pipeline.
Three months later, however, the state granted BP's request to waive the pigging requirement as long as other mandates were met. At the end of the year, Alaska declared that BP had completed all remaining elements of the order.
The sludge buildup is considered a likely cause of the biological corrosion that ate into the lines, causing the largest-ever known spill on Alaska's North Slope in March on the western side of the field and a smaller spill in August on the eastern side.
Until those spills were discovered, BP had not run cleaning pigs in the lines for at least eight years.
Other North Slope operators run cleaning pigs much more frequently. Alyeska Pipeline Service Co., which operates the 800-mile (1,287-km) trans-Alaska pipeline, runs a pig every week to 14 days. ConocoPhillips runs them monthly, according to company officials.
At an Anchorage hearing held last week by Alaska's three-member Congressional delegation, Kurt Fredriksson, commissioner of the state Department of Environmental Conservation, defended the decision to waive the pipeline-cleaning requirement.
"I don't think we were lax. I just think this was a secondary issue to what we were trying to accomplish," he said during a break in the hearing.
The waiver was granted because BP determined that its new leak-detection system could be adequately tested without removal of the sediment, Fredriksson said.
That explanation failed to satisfy Senator Lisa Murkowski, an Alaska Republican whose father, Gov. Frank Murkowski, is Fredriksson's boss.
"I don't know who I'm more irritated at," Sen. Murkowski said at the hearing. "You have both turned your heads to another problem that was existing."
Critics say the state's lax regulation is evidenced in part by Gov. Murkowski's recent executive order creating a new oil-field oversight agency.
Alaska relies heavily on oil revenues for its government's operations and critics say that could have hampered regulation over the industry. About three-quarters of the state's general operating revenues come from oil royalties, taxes and fees.