Alaska Gov. Frank Murkowski recently signed an administrative order creating a lease monitoring and engineering integrity coordinating office (LMEICO) within the state’s Department of Natural Resources (DNR). The LMEICO is charged with coordinating the oil infrastructure oversight efforts of a multitude of state, federal and local agencies stretching from the North Slope fields to the Alyeska marine terminal at Valdez.

“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. “The pipeline maintenance problems we have seen in the Prudhoe Bay Unit have revealed the gaps in government oversight.

“The effects of the Prudhoe Bay shutdown continue to be felt,” Murkowski said. “We are now at 60,000 b/d 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. DNR Commissioner Mike Menge, who has chaired an interagency team charged with responding to the recent pipeline problems, said LMEICO will:

“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 takes effect immediately. Memoranda of understanding and other agreements between Alaska, the borough and federal agencies have been drafted and will be signed in the near future. The LMEICO will have seven staffers initially, and budgetary and administrative actions are under consideration.

©Copyright 2006Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.