Help Wanted!

Job Description:

The Alaska Oil and Gas Conservation Commission (AOGCC) is recruiting for a permanent, full-time, overtime eligible, PETROLEUM INSPECTOR. Under general direction of the AOGCC, the Petroleum Inspector performs fieldwork in the enforcement of Oil and Gas Conservation statutes and regulations to assure the prevention of waste in the exploration, development and production of hydrocarbon reservoirs. Program goals are defined as part of the specific duties and to accomplish these goals inspectors must select which inspections are critical to witness and which inspections can be waived. Inspectors exercise discretion regarding how the AOGCC’s inspection goals are achieved.

Finally, the AOGCC is staffing up. To date, there existed only 5 positions for field inspectors, for the entire North Slope region! And lack of oversight due reduced staff was not due concerns of budget constraints, as the Commission’s $5.6-million a year budget is paid for by the oil companies. So lack of oversight finds no excuses. And that is the reason today the AOGCC is under scrutiny of a 3rd party audit, because it was not watching out what was going on at Pioneer Natural Resources’ Ooogurk project. With no oversight, this 1st Independent is now facing enforcement action by the Commission, for many different derelictions of duty including illegal underground injections, illegal natural gas wasting that polluted the environment and many other atrocities. Bottom line, this Texas based corporation’s project should be shut down and banned from ever again being allowed to work the North Slope.

Serious Non-Compliance

So why would Pioneer Natural Resources deny an “enforcement order” by the Alaska Oil & Gas Conservation Committee to shut in two wells that were unsafely piped? Waiting for over a month’s time to perform this action when conforming to the “order” only after the AOGCC warned of further action, by the police! When the regulators informed that this non-action by Pioneer was a “serious non-compliance” issue! This behavior to misbehave is simple. When a small Independent is dependent on paying the bills, lost production can make the shareholders irate, and when that happens, executives and CEOs may find themselves in the un-employment line. So they take a risk, a gamble just to keep the cash register cha-chinging. And when a small Independent knows not what they are doing in Alaska, they have to take these risks and hope that they don’t get caught. Case in point: Pioneer Natural Resources, a Texas based Independent, a “mom & pop” operation wanted to make it big in Alaska. So they came north to the bidding table, unprepared, What I mean by this is the fact that on record Pioneer has paid out the most for the opportunity upon leases to explore to exploit in Alaska, on the “North Slope”. During the 2008 North Slope Area-wide Sale, Pioneer broke the records for “bid per acre”. With the average bid at $36 per acre, Pioneer went overboard and paid out ten times the average, $306 bucks and ended up with a single lease costing the shareholders some $783,000.00 dollars. The highest bid on record! The state loved it. For a lease that was deemed un-economical by the “Big Oil” players, because it was considered marginal recovery “near-shore” and a logistics nightmare. So what was once an interest to “Big Oil” experienced in Alaska, they let the original lease go by the wayside. There was oil, but to hard to extract in an area that was far away from the existing Prudhoe Bay infrastructure. That is why today Pioneer has a supply barge grounded in the Beaufort Sea and leaking fuel! It is stupidity at its best. And that is why they feel proud to disregard orders, as when the cash register goes broke, this place has no other option, then closing up shop. And with a no-give-a-crap attitude upon oversight and/or environmental responsibility, maybe the state should make it easy, with a “Cease & Desist” order, until this outfit can prove that they know what they are doing. In fact of the three exploration wells drilled after the lease sale, the favorite of interest was a dry hole. So they had to try the least favorite, wherein oil was found but in a pathetic formation that finds today “communication” problems wherein the water-flood finds a direct tunnel to the oil and comes right back up out of the ground! Big Oil probably laughs, but cries when they find out that the state made concessions in efforts to lure in the so-called Independents. With tax relief and royalty relief unheard of after 30-years. This is Drill Baby Drill, this is the Sarah Palin legacy. And in the end, the state will pay, the ecosystem and environment will suffer, as this state is open for business and even the regulators find it hard to do their job. Thanks Sarah… And if you can see Russia from your backyard, maybe you can see what is happening on the “slope” with the Independents!

Pioneer Barge "Hard Aground"!

Barge runs aground, leaks fuel on Alaska's North Slope


SMALL LEAK: No injuries to 4 crew after wheelhouse partially falls off.

By RACHEL D'ORO
The Associated Press
Published: September 15th, 2010 09:17 PM
Last Modified: September 15th, 2010 10:53 PM

An ocean barge carrying oil-field equipment ran aground along the North Slope, and responders

State environmental regulators said the vessel has more than 1,700 gallons of diesel fuel on board.

The Stryker grounded after a section of the barge holding the wheelhouse lost connecting pins and fell partly into the water.

The mishap occurred Tuesday between Oliktok Point and Oooguruk, a field that pumps oil from an artificial island.

No one was injured, but a small amount of fuel leaked from a tank, according to Tom DeRuyter of the Alaska Department of Environmental Conservation. Valves on all the tanks were closed and the sheen dissipated, he said. The Coast Guard also responded.

The barge ran aground about 40 miles west of Prudhoe Bay, the nation's largest oil field. The cause is under investigation and immediate plans call for placing booms around the barge, removing the fuel and salvaging the vessel.



The Stryker is owned by Bowhead Transportation Co. and is under contract with the Oooguruk operator, Pioneer Natural Resources, an independent oil and gas company based in Irving, Texas.

At the time of the grounding, seas were choppy and winds were gusting at 40 mph. The barge has operated in the area for several years in rough conditions, said Amanda Henry, a spokeswoman for Bowhead.

"We are not aware at this time what actually caused this," she said.

The barge is attached in segments, with the wheelhouse held in place by pins on top of the stern, Henry said. The design allows the barge to be expanded for larger loads.

Henry said two of the wheelhouse pins failed for unknown reasons, leading to the grounding. The four people on board were safely removed from the craft, which was transporting three flatbed trailers and a vacuum truck from Oooguruk to a dock at Oliktok eight miles away.

Todd Owens, an Alaska spokesman for Pioneer, said oil production has not been affected. Oooguruk produces as much as 588,000 gallons a day.

Pioneer is already under scrutiny by the state, which hired an independent investigator in June to review allegations from a former worker at the small field. The whistleblower, Mike Kelley, claims Pioneer covered up spills, improperly disposed of waste, created unsafe work conditions and injured wildlife.

The grounding is irrelevant to any concerns raised by the whistleblower, Owens said.

"This is not a Pioneer-operated asset," he said of the barge.

Rob Shoaf, a private attorney looking into Kelley's claims, said the grounding is "not within the scope of this investigation." He hopes to submit his report next week to the Alaska Oil and Gas Conservation Commission, the state agency that regulates oil wells.

Pioneer Fined!

Slope producer fined for unauthorized chemical injection


FINE: Unauthorized use of glycol leads to levy of $10,000 by commission.

By ELIZABETH BLUEMINK

ebluemink@adn.com
Published: September 15th, 2010 08:59 PM
Last Modified: September 15th, 2010 10:53 PM

Pioneer Natural Resources, the sole independent oil producer on the North Slope, paid a $10,000 fine this week for injecting an unapproved chemical into its oil reservoir last May.

The violations involve glycol, which Pioneer was using as an anti-freeze fluid in a water supply line. Glycol is commonly injected into oil reservoirs on the North Slope but Pioneer had not sought or received permission to do so.

The glycol violations were initially reported by an employee whistleblower. Pioneer initially denied the allegations, but after concluding an internal investigation it told regulators that it had improperly injected roughly 45,000 gallons of a glycol-water mixture into the reservoir. The injections happened on two days.

The Alaska Oil and Gas Conservation Commission sent a letter to Pioneer in late August proposing a $10,000 fine.

Pioneer did not contest the fine and sent its payment to the state regulator this week.

Pioneer said in a statement Wednesday that it reported the violations as soon as the company confirmed they had happened and it has received conditional approval from the commission to inject glycol in the future.



The AOGCC is still investigating other allegations reported by the whistleblower, Mike Kelley, who quit his job at the company soon after making the accusations.

Among other accusations, Kelley claimed the company covered up spills, injured wildlife and created unsafe conditions for workers.

Kelley further alleged that the AOGCC neglected its duty to regulate the company. For that and other reasons, the commission hired an external investigator, Robert Shoaf, to handle the case. His report to the agency is expected next week.

________________________________________

Find Elizabeth Bluemink online at adn.com/contact/ebluemink or call 257-4317.

Irresponsible Attitude and Behavior

Case in point as to why Pioneer Natural Resources’ Oooguruk oil production facility should be temporarily shutdown, until such time this Texas based corporation can prove to State of Alaska oversight police that they are indeed responsible and competent to explore and exploit natural resources on Alaska’s North Slope, in the Beaufort Sea:

Alaska Oil & Gas Conservation Commission inspects Pioneer Natural Resources well ODSK-35 on May 12, 2010 and instructs Pioneer field personnel to replace temporary piping that is allowing this well to produce crude oil. On May 18th, Commission requests timing for the above mentioned resolution. On May 27th, Pioneer requests a meeting to discuss the above mentioned inspection and the Commission’s attempt to have Pioneer come into compliance and fix problems. No meeting is ever scheduled by Pioneer, a No-Show! On June 9th, Commission again warns Pioneer that the use of “temporary piping” was inconsistent with “good oilfield practice” and a possible violation of Alaska statutes. Pioneer did not respond. On June 16th, the Commission once again inquired about status of the “temporary” well piping and Pioneer was verbally instructed to shut the wells in immediately. Pioneer did not comply! On June 18th, Pioneer asserted that it was a “good oilfield practice” to utilize temporary piping to produce crude oil for sale. Finally on June 22nd, the Commission through correspondence warned the following:

The Commission recognizes there have been unexpected conflicts that have prevented direct communication between appropriate personnel of the Commission and Pioneer. However, for over a month, Pioneer has clearly and repeatedly been instructed to correct the problem or shut in the well. Pioneer’s failure to resolve this matter constitutes serious non-compliance and must be resolved immediately. In accordance, Pioneer is instructed to shut-in both wells immediately.

The above scenario is clear-cut evidence that this state cannot trust the Independents. With “Drill Baby Drill” the Sarah Palin legacy, what she left for this state to deal with, it is now starting to show its ugliness and if not stopped will ruin the Beaufort Sea. If the regulators cannot even get Pioneer to shut down wells that are violating the state statutes, because of unsafe practices, then this state is doomed and we see that Sarah Palin’s “DBD” is a wrecking ball, just like her run for the vice! Like already mentioned, if the state oversight is in-effective it can have devastating effects, making such oversight a useless tool in efforts to keep the environment safe for future generations to come, without responsible oil development. Write your representative, in fact call your representative and demand that PNR’s Oooguruk development project located on Harrison Bay of the Colville River delta watershed be stopped through a “Cease and Desist” order until such time the state can be guaranteed that the so far no give a crap attitude is changed, as it is a privilege to work the “slope”, not just a free-for-all crap shoot wherein oversight is just a suggestion!

Oil Man vs. ICE

A giant ice sheet attacks Oooguruk Island, a man-made drilling island in Harrison Bay of the Colville River delta, Beaufort Sea. With only 13-ft elevation above sea level, within seconds the island was bracing to be totally destroyed. This man-made island was not designed to handle such storm fallout, and even though destructive ice was considered as part of the island design - the 100-year flood criteria with a probability of 0.1 percent that it would actually happen in a 100-years - well it happened during the 2nd year this island was in operation. The drilling rig was shaken so violently that rig workers were running for their lives. And after the storm subsided, there was an environmental nightmare, from broken boxes of drilling chemicals that littered the island’s perimeter. As to why it is still in operation today without a protective re-design is ridiculous and points to an “oversight” attitude that “Drill Baby Drill” rules, and protecting the environment is just a suggestion, just ask Sarah Palin, the “Drill Baby Drill” queen.

Your PFD

How does your PFD stuff money, extra cash, in your pockets? It comes from resource development. As a “resident” of the state of Alaska, you are entitled to enjoy the results of under-surface development, as ownership of the resources comes by virtue through that residency. So in efforts for the state revenue police to make sure we are getting our “money’s” worth, they provide oversight. Hundreds of state jobs were created to provide the management of state resources, with respect to taxation and royalty. Upon the PFD when considering oil development, once a lease is “spuded” and produces the “Black Gold”, the oil must be measured, so the state can stake claim the “royalty” and severance tax, thus the PFD pot from “black gold” begins to grow. So for the past 30-years, it meant accurate measurement with oversight, all in efforts to make sure that the amount of oil depleted from a lease formation was accurate. In fact, the entire North Slope oil measurements scheme is unsurpassed, wherein a barrel of oil can be justified to 4decimal places and that accuracy traceable all the way back to the National Bureau of Standards, in D.C., as it is big money and any inaccuracies along the way means millions in lost revenue. But when Pioneer Natural Resources came to Alaska to develop risky formations in the Beaufort Sea, things changed, for the worse. Based on the “smaller footprint” concept, to sell projects that “Big Oil” said was a risk, the state legislative branch provided concessions. One step forward three back came when the state bureaucrats allowed PNR to use a new measurement devise, never once allowed for “fiscal” oil measurement and at the same time allowed the “industry” to be the oversight with the approval of such. Today as oil is transported from PNR’s Oooguruk Island, an island that is man-made and almost disappeared during a major ice storm - something the engineers said wouldn’t happen in a 100-years - well that “approved” oil accounting is costing the state in revenue, it is loosing ground with your PFD! In fact, the measurement is so bad that a “Big Oil” company that was made to accept PNR oil, this company demands in return for the “measurement uncertainty risks” upon this type of measurement, free oil in return! This “risk” is not enjoyed by the state, so we are getting screwed. What is good for the goose should be good for the…. So each day that PNR produces 20000 barrels, 600 barrels are given to a major oil company for no other reason than the fact that the state allowed for a shabby form of accounting. At the same time, the state gets screwed accepting this inferior type of measurement. But this is what happened when the oversight police, the AOGCC, was taken over by Palin. Then she became governor, so the reign of ineptness with respect to oversight continued, and made its debut of dereliction when Pioneer developed the Oooguruk project – as the 1st Independent to take advantage the “Drill Baby Drill” mentality. Lighten up on the “Independents” was the pre-requisite to “Drill Baby Drill”, and it may create jobs and allow oil development where no “Big Oil” has the balls or guts to visit, in the end we get screwed and the environment suffers. That is not what resource development is all about. But maybe the regulators have learned their lesson, and we will not see a repeat, as with a 3rd party investigation upon Pioneer’s Oooguruk “near-shore” development on Harrison Bay, of the Colville River delta on the Beaufort Sea, for reasons upon environmental atrocities, maybe the tides have turned, and from now on end maybe the PFD and/or environment will not be in jeopardy any more then what it has too to support oil development. But we cannot have our cake and eat it too! If we see oil development “creep” in sensitive areas upon Alaska’s northern coast, we must say “No”, not on our watch, until such time all of our environmental demands are secured. And money cannot ever cover the cost of irresponsible development, and all the jobs “created” are not worth it, neither is that PFD, as the latter is nothing short “sham” recycling! Just ask the Pioneer executives. Hey what is an oil executive with 4 bars?