Alaska governor: BP should pay for jobs freeze

Alaska’s governor says BP should pay compensation for a state employment freeze because of the millions of dollars lost through the shutdown of America’s biggest oil field.

Frank Murkowski said he had has directed Alaska’s attorney general to investigate whether the British oil giant could be held fully accountable for the losses.

Earlier this week, London-based BP said it would shut Prudhoe Bay because of a small leak and severe pipeline corrosion. Energy chiefs say the pipeline repairs are likely to take months, curtailing Alaskan production into next year.

The expected loss of 400,000 barrels a day at today’s oil prices meant Alaska was losing about $6.4m (€5m) a day in royalties and taxes, 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, Corbus said.

“BP must get the entire Prudhoe Bay back up and running as soon as it is safely possible,” 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 from Prudhoe Bay to the 800-mile Trans-Alaska Pipeline. The Prudhoe Bay field accounts for 8% of US domestic output.

“We obviously apologise for the impact this is having on people and we regret having to take these actions, but our focus is on safe operations and environmental protection and that’s the reason why we’ve undertaken the action we have,” BP spokesman Neil Chapman said.

Alaska’s department of administration is still calculating the number of vacancies that would be affected by the hiring freeze. The freeze does not apply to essential employees, such as state troopers and prison guards.