Dec. 14--When oil spilled from corrosion-weakened Prudhoe Bay field pipelines in 2006 then-Gov. Frank Murkowski vowed quick and tough action on what were widely viewed as lapses in industry maintenance of facilities vital to the state's treasury and economy.

In the heat of the moment, Murkowski ordered aggressive state inspections of field pipelines and production facilities not covered by federal pipeline regulators.

Alaska would become the first oil-producing state to introduce comprehensive government inspection and regulation of "upstream" production facilities.

The new inspection bureaucracy Murkowski contemplated sent shivers through industry managers. There were visions of state inspectors crawling through processing plants and offshore platforms writing tickets.

Two and a half years later, there's a different ending to this story. BP has largely completed a reconstruction of its damaged Prudhoe Bay pipelines and has done a major overhaul of internal quality management procedures.

Murkowski's vision of state inspectors playing tough cop has been softened into a more pragmatic and effective approach.

That has largely been the work of Gov. Sarah Palin and Natural Resources Commissioner Tom Irwin, who have reputations for being tough on the industry.

In this case, though, Palin and Irwin quickly ordered the scaling down of Murkowski's plans for the large inspection organization just after the new administration took shape in early 2007. BP's efforts to repair its pipelines were well underway, Prudhoe Bay had resumed full production, and the political furor had died down. The new administration's approach was more level-headed.

Alaska Division of Oil and Gas Director Kevin Banks was put in charge of the new, streamlined Petroleum Systems Integrity Office, or PSIO. The division is part of the Department of Natural Resources. DNR has the responsibility of managing state-owned lands and oil and gas leases, and has broad legal authority to protect the state's interests and the integrity of facilities that produce state-owned resources.

Banks made it clear from the outset that his mission was to cooperate with industry in encouraging good maintenance and management practices, to get people to start working together and sharing "lessons learned," and to play tough cop only as a last resort.

With these marching orders, Allison Iversen, the Petroleum Systems Integrity Office's coordinator, says the core missions of the new PSIO are first, "to break people out of their silos" to share information, starting with state agencies; and, secondly, to educate other agencies on the benefits of quality management programs.

"The end goal is efficient and effective oversight of the petroleum industry," she said.

Iversen is an attorney by training, and was deputy state director of the Joint Pipeline Office before coming to head the PSIO. She has recruited two veterans to help her, Dan Rice and Michael Engblom-Bradley.