April 19, 2007
Thursday

Alaska Governor Sarah Palin announced Wednesday the "Petroleum Systems Integrity Office" (PSIO), her initiative to ensure Alaska's oil and gas infrastructure will get the maintenance and inspection it needs to operate safely for decades to come.

"The economic well-being of our state depends on the flow of oil from state lands on the North Slope and elsewhere in the state," said Governor Palin. "Alaska will continue to deliver the new energy our nation needs, and we absolutely demand that our oil and gas systems are up to the job."

Governor Palin's Administrative Order 234, signed April 18, 2007, creates the PSIO as an independent office inside the Department of Natural Resources (DNR) Division of Oil and Gas, with specific responsibilities and authorities to coordinate the state's permitting, oversight and compliance functions with all other responsible agencies.

PSIO addresses lax maintenance practices on the North Slope that came to light last year after corroded pipelines spilled 200,000 gallons of oil, leading to production shut-downs at Prudhoe Bay and interruption in the flow of oil revenue to the state, she said.

PSIO requires industry to establish and maintain quality assurance programs, and requires the state to inspect facilities to ensure operators comply with those programs. PSIO will also search for any gaps in laws, regulations or industry practices that threaten the integrity of the state's oil and gas infrastructure. If necessary, the office will step in and exert the state's authority as issuer of development leases to ensure the system and the state's interests are protected.

Under PSIO, state and federal agencies will retain their own responsibilities: Alaska Department of Environmental Conservation for environmental protection; Alaska Department of Natural Resources for land and water use, habitat protection, unit and lease management, and coastal zone management; and the U.S. Department of Transportation for the trans-Alaska Pipeline System (TAPS). But their efforts will be better coordinated, and any gaps in oversight will be better filled, through PSIO, the governor said.

"No other state has taken such bold steps to make sure the operators of oil and gas facilities are properly maintaining their own equipment," Palin said. "Alaska is the first state to make operators share their maintenance and quality assurance programs with the state. We're the first state to make operators document that they are complying with those programs. We're the first state to conduct inspections to verify they are complying with those programs.

While the goal of the previous administration's systems integrity effort was the same, the Lease Monitoring and Engineering Integrity Coordinator's Office (LMEICO), would have added expensive new permitting, budgeting and personnel functions in a complex structure that provided little additional benefit, Governor Palin said.

"We are setting our standards high, but that's because the stakes are high for Alaska and for a nation that depends on our oil and gas," she said. "I am confident that PSIO is the best way to ensure safe, reliable operation of our energy infrastructure."

Source of News:

Office of the Governor
www.gov.state.ak.us

 

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