Alaska Governor Says Pipeline Leak Means a Freeze on New Hires

JUNEAU, Alaska — Governor Murkowski imposed a state hiring freeze yesterday because of the millions of dollars in revenue that Alaska is losing as a result of the Prudhoe Bay oil field shutdown, saying he would support hearings into BP’s maintenance practices.Mr. Murkowski also said he would direct Alaska’s attorney general to investigate whether the state could hold the oil giant accountable for the state’s losses.Earlier this week, BP said it would shut down Prudhoe Bay — the biggest oil field in the nation — because of a small leak and severe pipeline corrosion. Energy officials have said the pipeline repairs are likely to take months, curtailing Alaskan production into next year.The expected loss of 400,000 barrels a day at current oil prices means the state is losing about $6.4 million a day in royalties and taxes, the revenue commissioner, Bill Corbus, said.The state receives 89% of its income from oil revenue; Alaska has no state sales tax and no personal income tax. The Prudhoe Bay shutdown will cut in half Alaska’s total oil production and the resulting revenue.Without money coming in from Prudhoe Bay, Alaska’s government can operate for only about two months before going into the red, Mr. Corbus said.“BP must get the entire Prudhoe Bay back up and running as soon as it is safely possible,” Mr. Murkowski told a joint session of the state Legislature.BP, the world’s second-largest oil company, said it would replace 16 miles of pipeline that carries oil to the 800-mile Trans-Alaska Pipeline from Prudhoe Bay. The Prudhoe Bay field accounts for 8% of American domestic output.Because oil demand is so high and the nation’s petroleum supplies are so tight, the shutdown has already driven oil prices up and could mean higher prices at the gasoline pump, too.Three Democratic legislators released a letter to Mr. Murkowski calling on the governor to hold hearings and have BP officials explain under oath what they did, or failed to do, to maintain Prudhoe Bay’s pipelines.“Absent hearings, during which witnesses are sworn under oath and relevant documents are subpoenaed, the public may never learn the truth,” the lawmakers said.Mr. Murkowski said he would support the idea, adding, “I fully expect hearings to occur.”Mr. Murkowski questioned why BP abruptly shut down the entire Prudhoe Bay field after finding a leak of only four to five barrels.“What did BP learn last Sunday that it did not know previously that would cause BP to take such precipitous action?” Mr. Murkowski asked. He complained also that the state was not consulted before the decision was made.The governor also urged legislators to support a plan he developed with North Slope producers to build a $25 billion natural gas pipeline to Canada.

Alaska Governor Says Pipeline Leak Means a Freeze on New Hires

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