Alaska to review its oil and gas facilities

Private contractors will spend three years on assessment

Posted: Thursday, May 03, 2007

Gov. Sarah Palin said Tuesday the state will spend the next three years assessing the condition of Alaska's oil and gas facilities.

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Private contractors will work under direction of the newly formed Petroleum Systems Integrity Office.

The plan is vital for the state's economic development as it works toward building a natural gas pipeline, Palin said.

It's also contingent on lawmakers passing Palin's $5 million capital budget request for the 2008 fiscal year, which begins July 1.

If approved the state will begin searching for an outside contractor, said Department of Environmental Conservation Commissioner Larry Hartig.

This plan, called risk assessment, requires learning the condition of all facilities statewide, Hartig said.

"It's a very systematic step-by-step, engineer-driven process: What are risks? How are they being addressed? What are the consequences if something goes wrong?" he said. "Good management requires that we understand the current state of the infrastructure.

"What we really need to know is what's in good shape, what's not, and where and how serious the risks are. A risk assessment is a structured process designed to answer those sorts of questions."

Palin formed the new inspection office two weeks ago, just months after corrosion was blamed for the partial shutdown of Prudhoe Bay.

This inspection means appraising the condition of the state's oil and gas infrastructure that include the 800-mile trans-Alaska oil pipeline.

"It's not an investigation for an enforcement action," Hartig said. "What we want to know is the condition of the infrastructure in place.

"When we get the report, then it will be evaluated for what improvements will be made. It will tell regulators where we should put our focus."

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