Regulators to investigate oil well leaks

Inquiry triggered by information leak from unnamed 'veteran BP employee'

Posted: Friday, July 21, 2006

ANCHORAGE - The state is investigating dozens of BP-operated oil wells on Alaska's North Slope following allegations this week that petroleum-based fluids had leaked onto the Arctic tundra.

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The Alaska Oil and Gas Conservation Commission had an inspector in-place Thursday to begin the process of looking into the integrity of 57 wells operated by the British oil company, said Commissioner Cathy Foerster.

The investigation might be extended to other wells if warranted, she said.

"We take these allegations seriously," Foerster said, adding that the state investigation would be conducted independently of one BP is doing.

The allegations were first reported this week in a London newspaper. The Financial Times referred to an unnamed "veteran BP employee" in reporting that some BP wells had allowed gas and hydrocarbon fluids to the surface.

The investigation was being launched even though the state agency had no information that any of the wells had leaked fluids onto the tundra, or that BP had operated the wells improperly, Foerster said.

"We don't have any information any of the 57 wells are in violation of our regulations," she said.

The Alaska Department of Environmental Conservation also is taking part in the investigation. Leslie Pearson, the agency's spill response program manager, said DEC also had no reports of spills at the 57 wells.

"To our knowledge, there have been no spills reported from any of these well cellars and no indication there have been any impacts to tundra," she said.

Foerster said an independent investigator with no ties to the oil industry also would be looking into the allegations for the state. The independent investigator was hired several months ago, in part because of criticism that state regulators are too easy on oil companies, she said.

Foerster said Alaska follows industry standards when it comes to regulating North Slope operators.

BP welcomes the state investigation into the wells, said Steve Rinehart, a spokesman for BP in Alaska.

"We are anxious to get to the bottom of this and to find any problems if there are some," he said.

Chuck Hamel, a former shipping broker from Virginia who frequently publicizes information from whistleblowing employees in Alaska's oil industry, said last month in a letter to state officials that water carrying oil had flooded some well cellars this spring, eventually reaching tidal ponds on the tundra.

Foerster said the commission had not received any information indicating well house spills had actually reached the tundra.

"I have workers up there that say just the opposite," Hamel said. "They know that they are vacuuming up crude oil that has reached the surface every day."

BP had previously shut down 37 of the 57 wells over concerns of petroleum products winding up in well cellars. It then shut down eight more to optimize oil production, leaving 12 wells still in operation. Those wells were being shut down this week after the Financial Times' report.

"We decided in an abundance of caution to shut down and reconfirm the integrity of 12 operating North Slope wells," BP spokesman Daren Beaudo said this week. "We have no reason to believe that continued operation poses a risk to workers or the environment."

Foerster said a small amount of leaked fluid is to be expected because the wells are mechanical systems that need to be lubricated. Crude oil or diesel fuel, added as freeze protection, also can reach the well house cellars, sometimes mixing with melted snow.

Those fluids are vacuumed out of the cellars as required, Foerster said.

Pearson said the investigation will include looking into the well cellars to see if they have liners.

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