October 07, 2006
"Based on the two incidents in the Prudhoe Bay Unit earlier this year, it has become very clear that the State of Alaska should have a more comprehensive oversight program for the oil and gas production and transportation infrastructure that carries crude oil from the wells to the Trans Alaska Pipeline System," Murkowski said. "That enhanced oversight program is what we are putting in place today. The new LMEICO will coordinate efforts between the state, the North Slope Borough and federal agencies.
"The pipeline maintenance problems we have seen in the Prudhoe Bay Unit have revealed the gaps in government oversight. Our objective is now to close those gaps and assure Alaskans and the nation that oil and gas production on the North Slope will continue to be the most environmentally-sensitive of anywhere in the world.
"The effects of the Prudhoe Bay shutdown continue to be felt," Murkowski said. "We are now at 60,000 barrels per day under the level of production on which we based our FY2007 budget. This situation underscores how important it is to have an office like this to make sure the production and transportation infrastructure is kept in top operating condition."
The LMEICO will be established in DNR's Division of Oil and Gas to address permitting and oversight of all petroleum facilities and activities on state leases, in order to maximize the efficient and stable transportation of Alaska's oil and gas to market.
DNR Commissioner Mike Menge, who has chaired an interagency team charged with responding to the recent pipeline problems, said the results he expects to see from the LMEICO are: ? To perform risk assessments on all petroleum infrastructure on state leases, ? To review all facility designs, operations and maintenance programs and practices for technical competence and consistency with established government and industry standards, and ? To inspect pipelines and facilities on an ongoing basis to document compliance with approved procedures and plans.
"The fundamental goal of the LMEICO is to ensure seamless regulatory oversight of oil and gas infrastructure and operations, from the reservoir through the field to the loading facility for shipment to market," Menge said. The administrative order will take effect immediately. Memoranda of Understanding and other appropriate agreements between the State of Alaska, the borough and federal agencies have been drafted and will be signed in the near future. The LMEICO will initially be staffed with seven positions, and budgetary and administrative actions are under consideration.
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