Alaska Gov. Freezes Hiring Amid Oil Stoppage

Gov. Frank H. Murkowski imposed a state hiring freeze Wednesday because of the millions of dollars in revenue Alaska was losing as a result of the Prudhoe Bay oil field shutdown, and said he would support hearings into BP’s maintenance practices.

Murkowski also said he would direct Alaska’s attorney general to investigate whether the state could hold the oil giant fully accountable for the state’s losses.

This week, BP said it would shut down Prudhoe Bay, the nation’s biggest oil field, because of a small leak and severe pipeline corrosion. Energy officials have said the pipeline repairs could take months, curtailing Alaskan production into next year.

The expected loss of 400,000 barrels per day means the state is losing about $6.4 million a day in royalties and taxes, Revenue Commissioner Bill Corbus said.

The state receives 89% of its income from oil revenue, and 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 Legislature.

BP 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 about 8% of U.S. oil output.

“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.