Cook Inlet Company Fined Nearly Half A Million Dollars For Safety Violations

Feb 14, 2017

Chunks of ice float in Cook Inlet on Dec. 13, 2016 near Kenai, Alaska.
Credit Rashah McChesney

A state agency announced Tuesday it is fining an oil and gas company that operates in Cook Inlet for major safety violations.

The Alaska Oil and Gas Conservation Commission (AOGCC) is imposing a $446,000 penalty on Cook Inlet Energy for operating a well with failed safety valve systems. The valves prevent fluid from escaping an oil or gas well and can help guard against a blowout.

The commission reports that in late 2013, a surface safety valve at one of the company’s wells failed to work when tested. The company operated the well for 42 days despite the faulty valve.

During a test a few months later a different safety valve also failed. Cook Inlet Energy continued to operate the well for several weeks after that failed test, as well. The commission originally proposed a penalty of more than $800,000, but the fine was reduced after a multi-year review.

The incidents did not harm the public or the environment, the commission reports.

Cook Inlet Energy was a subsidiary of Tennessee-based Miller Energy Resources, both of which filed for bankruptcy in 2015. Cook Inlet Energy has since reorganized and it and its parent company now operate under the name Glacier Oil & Gas.

Glacier Oil & Gas CEO Carl Giesler said the company acknowledges the violations took place. But Giesler, who joined the company after the incidents, said Glacier is now under new leadership that prioritizes safety.

“We are trying to play by not only the spirit, but frankly, the letter of the law,” said Giesler. “The AOGCC is trying to do their job and we’re trying to do ours in concert with them.”

“I think we’ve built a pretty decent track record — I have to say an enviable track record — for the two-plus years this management team has been in place,” Giesler added.

Late last year, Cook Inlet Energy filed an application with the U.S. Army Corps of Engineers to drill an exploration well in Cook Inlet. Giesler says the company is also completing four new production wells in Cook Inlet this spring.