Secretary: Pipeline ills shouldn't bar new Arctic drilling

Kempthorne says restricted plan considers wildlife

Posted: Thursday, August 31, 2006

PRUDHOE BAY - Interior Secretary Dirk Kempthorne was getting his first look Wednesday at BP Alaska's pipeline corrosion that shut down some North Slope oil production, but said the problems should not prevent new drilling in some environmentally sensitive areas.

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Kempthorne, on a three-day visit to Alaska's oil fields, toured an oil processing facility operated by ConocoPhillips 60 miles west of Prudhoe Bay, where he was told its practice is to run pipeline "pig" tests to guard against corrosion every two years.

BP had conducted only one "pig" test of its pipeline - in which a device is inserted into the pipe to gauge wall thickness. That was back in 1998 and it was only a partial test. Instead, the British-based petroleum giant had used what it has since acknowledged is less reliable ultrasound testing.

ConocoPhillips' Alpine field is the most modern on the North Slope and uses directional drilling to limit the surface footprint of its drilling wells. Also, while the Prudhoe Bay pipes are 30 years old, those linking the Alpine field to Prudhoe are only six to seven years old.

ConocoPhillips, co-owner of the Alpine field with Anadarko Petroleum Corp., plans aggressive exploration on the North Slope, holding significant leases in the National Petroleum Reserve Alaska, including one on the verge of production.

"We are going to be active on the exploration side," said George Storaker, vice president for North Slope operations for ConocoPhillips Alaska Inc. He said the Alpine field, which produced 130,000 barrels a day, "is on the decline" and new resources must be developed.

ConocoPhillips has its eye on the NPRA, an area the government set aside in 1923 for energy development, including the potential 2 billion barrels of oil beneath an environmentally sensitive area near Lake Teshekpuk. Environmentalists want to keep the area off limits to oil companies.

Kempthorne on Tuesday took a helicopter ride over the lake area that has become the focus of a new dispute over Alaska oil drilling. He said afterward that he's convinced a restricted drilling plan can accommodate energy development and wildlife protection.

"We're set to go forward," said Kempthorne, whose department will sell oil leases to nearly 500,000 acres north and east of Lake Teshekpuk late next month. It will likely be a decade before oil is actually taken from the area.

The lease plan includes limits on surface footprints, creation of corridors that will be off limits to drilling to allow for caribou migration, and buffers to protect geese molting areas, said Henri Bisson, the Bureau of Land Management's Alaska director.

In his first trip to the North Slope, Kempthorne was to get a briefing on the pipeline corrosion problems during a tour of the Prudhoe Bay fields Wednesday. "We want to make sure there's not a repeat of that," he said.

Also on his schedule was visiting the site where a pipeline leak last March spilled 270,000 gallons of oil.

Aides emphasized that the Interior Department has no regulatory authority over pipeline maintenance and that the Prudhoe Bay fields are on state land and not subject to federal leasing. But Kempthorne said the lessons learned from the BP problems might be used when setting requirements and standards for future federal oil leasing.



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