Top business stories of 2006: from pipeline shutdowns, to the gas line, to VECO investigations, Alaska business news makes headlines around the world.

• Author: Orr, Vanessa

From shake-ups in the governor's race to shutdowns in BP's oilfields, 2006 was a very exciting year for the people of Alaska. There was good news on a lot of fronts-the construction and mining industries had superlative years, and Native corporations also posted impressive profits.

But the oil industry didn't fare so well, suffering from the shutdown of 16 miles of pipeline in Prudhoe Bay, as well as questions raised from the FBI's investigation into the relationships between several Alaska lawmakers and VECO Corp. And as for construction of the natural gas pipeline, only time--and a new governor elected to replace project stalwart Frank Murkowski--will tell when, and where, that will happen.

Here's a look back at some of the top business stories of 2006.

BP RETURNS TO FULL PRODUCTION TWO MONTHS AFTER PRUDHOE BAY LEAK

In a nation already reeling from record high gas prices, the news that BP Alaska was shutting down its Prudhoe Bay operations in August as a result of corrosion problems on crude oil transit pipelines came as quite a blow. The company decided to shut down the field after a smart pig (an in-line diagnostic tool) in late July showed corrosion-related wall thinning and a small spill, estimated at four to five barrels. At the time, this shutdown was expected to reduce Alaska North Slope oil production by an estimated 400,000 barrels per day, which sent crude oil prices up by three percent the day after BP America Chairman and President Bob Malone made the announcement.

Within days, prices subsided and the company received regulatory approval to continue producing from the western side of the field, which accounted for approximately half of Prudhoe Bay's output. In September, BP Alaska was given permission to restart output from the field's eastern side for the purpose of inspections, and by October, smart pigging in the Eastern Operating Area (EOA) showed no significant areas of corrosion. Western Operating Area (WOA) pigging was started in November. BP Alaska also continued construction of bypass pipelines--the Flow Station 2 to Endicott pipeline bypass and the Crude Oil Topping Unit to the Endicott pipeline bypass were both completed in October.

"At this point, production is well over 400,000 barrels a day, and all indications are normal from a production volume standpoint," said BP spokesman Daren Beaudo. "We are positioning Prudhoe Bay to continue safe production, while re-evaluating the operability of our existing crude oil transit lines. We have put a number of bypass lines in place to provide redundancy, and have also made the decision to replace 16 miles of pipe with new steel." The replacement pipe is expected to arrive in fourth quarter 2006, and construction will begin in first quarter 2002

As a result of the shutdown, changes have been made in the way BP, and state and federal agencies, regulate the pipelines. BP has agreed to increase major maintenance expenditures to $200 million in 2007, and to undertake a number of improvements including the use of cleaning and in-line inspection tools in all of the lines returned to service. The company also has added a technical director to its structure to provide independent assurance of integrity management efforts. In early October, Gov. Murkowski created a Lease Monitoring & Engineering Integrity Coordinator's Office within the Department of Natural Resources to better manage oil and gas infrastructure oversight.

FBI AGENTS RAID LEGISLATIVE OFFICES ACROSS ALASKA

On August 31, 2006, FBI agents raided the offices of six Alaska legislators looking for possible ties between the...