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Oil prices fall as Alaskan oil replaced
CBC News
Crude oil prices slipped back Tuesday after U.S. Energy Secretary Samuel Bodman said extra supplies can replace the oil that will be lost during the shutdown of Alaska’s Prudhoe Bay oil field.
Most of a 35-kilometre length of the Alaska pipeline will have to be replaced. (CBC) Most of a 35-kilometre length of the Alaska pipeline will have to be replaced. (CBC)
Bodman told a news conference Tuesday that there are enough supplies of crude oil to make up for any short-term losses from Alaska, the biggest oil field in the United States.
(8 Aug 2006)
Related: Country Can Cope With Oil Loss, Energy Chief Says (NY Times).
Prudhoe Bay raises questions about aging oil fields
Mary Pemberton, Associated Press via Santa Barbara News-Press
BP’s problem of corroding pipes is worsening as the nation’s largest oil field ages and more water and less oil is produced during drilling.
”Really, we are a giant water field,” said Bill Hedges, BP PLC’s corrosion expert, explaining that what comes up now during drilling is three-quarters water.
Water contains carbon dioxide, ideally suited to corroding pipelines.
The shutdown this week of the Prudhoe Bay oil field because of severe corrosion found in transit lines is raising questions about the condition of the rest of the field. Oil first flowed at Prudhoe Bay on June 20, 1977.
The Prudhoe Bay oilfield, which accounts for 8 percent of domestic output, is very different now from what it was when it was first brought onstream, said ING Financial Markets analyst Jason Kenney.
”The changing quality of the crude that is being produced has presented an issue with the infrastructure that’s in place and the development and that is what BP are battling against,” Kenney said.
(8 Aug 2006)
For BP, a Pair of Repairs
Steven Mufson and Juliet Eilperin, Washington Post
Along With a Leaky Pipeline, Oil Producer Has Its Image to Fix
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Sitting in his Madison Avenue offices two weeks ago, with contemporary art on the walls and a commanding view of Midtown Manhattan, BP PLC chief executive John Browne was asked about the different images of BP, then the world’s second-largest oil firm, and its larger rival, Exxon Mobil Corp.
“It’s not a matter of competition,” Browne said. “It’s a matter of different character.”
Now the character of BP is being tested. On Sunday, the company revealed that a March oil spill in Alaska stemmed from pipeline corrosion so widespread that BP will suspend all production in Prudhoe Bay, the largest U.S. oil field, while it replaces 16 miles of pipe.
The pipeline fiasco has dealt a particularly hard blow to BP because it has smudged the company’s environmentally correct image.
(9 Aug 2006)
With Alaskan oil crimped, Californians look for options
Ron Scherer, Christian Science Monitor
NEW YORK – Maybe California needs its own Strategic Petroleum Reserve.
After hurricane Katrina interrupted oil production from the Gulf of Mexico, President Bush quickly opened the spigots of the nation’s emergency oil supply to provide crude oil once the region’s refineries were back up and running.
With BP shutting down most of the production from Prudhoe Bay, Alaska, the nation’s largest oil field, the Department of Energy has once again offered to supply oil from the Strategic Petroleum Reserve (SPR), located in Texas and Louisiana.
It won’t be so easy this time.
Delivering crude from the Gulf of Mexico to California will take at least 14 days, say energy experts. This includes a 24-hour passage through the Panama Canal, which can accommodate only relatively small tankers. Getting refined product to California is even more difficult, because the state requires a special gasoline blend designed to cut down on pollution.
The result? Californians will just end up paying more to tank up, most experts say.
(9 Aug 2006)
Alaskans Speak Up About Oil Field Shutdown (Audio)
All Things Considered, National Public Radio (NPR)
Libby Casey, a reporter for KUAC in Fairbanks, Alaska, describes the local reaction to BP’s shuttering of the oil field in Prudhoe Bay.
(7 Aug 2006)
Leak is latest of Alaska’s pipeline woes
Brad Knickerbocker, Christian Science Monitor
Some 500 spills a year occur in the Prudhoe Bay oil fields and along the 800-mile, three-decade-old pipeline system.
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When oil began flowing south from Alaska’s North Slope to the port at Valdez nearly 30 years ago, it was a new era for US energy production and distribution. From the start, it was a technologically daring and politically controversial project. As evidenced by this week’s shutdown of a portion of pipeline in the Prudhoe Bay oil field due to a spill, it remains so today.
Despite what industry supporters say are more environmentally friendly ways of detecting and extracting oil from the North Slope today, the means of transporting the liquid gold south is old and – critics say – becoming dangerously decrepit. In some places pipeline walls have lost as much as 80 percent of their thickness as a result of corrosion, industry officials say.
Meanwhile, environmental, economic, and legal fallout continues from the 1989 oil spill, which dumped at least 11 million gallons of oil onto 1,200 miles of shoreline in Prince William Sound after the tanker Exxon Valdez had filled up at the pipeline’s southern terminal.
All of this adds urgency to the long-running debate over whether to allow drilling in the Arctic National Wildlife Refuge.
(9 Aug 2006)
Prudhoe oil may still flow
Wesley Loy, Anchorage Daily News
BP, officials seek ways to keep some Prudhoe oil flowing
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BP continued deactivating the mammoth Prudhoe Bay oil field on Tuesday, but signals began to emerge that the shutdown might be shorter and less extensive than first feared.
A BP spokesman, Daren Beaudo, said company managers along with state and federal regulators were studying options to possibly keep the western half of the field running.
(9 Aug 2006)
That’s Some Smart Pig in the Pipeline (Audio)
Nell Boyce, All Things Considered, National Public Radio (NPR)
BP decided to shut down its largest Alaskan oil field after inspections by “smart pigs” — multimillion dollar robots that root through the pipelines — showed damage from corrosion. But the pigs still aren’t perfect when it comes to monitoring pipeline safety.
(8 Aug 2006)
Lessons From Prudhoe Bay
Editorial, NY Times
…Until we have marketable alternatives to oil, the only thing that will truly reduce Americans’ vulnerability to oil shocks is reduced demand. According to the nonprofit National Environmental Trust, if Americans had started a 10-year phase-in of 40-mile-a-gallon driving standards in 2001, they would already be saving 267 million barrels of oil a year. That’s nearly twice the amount produced annually at the Prudhoe Bay field.
No matter what Mr. Domenici and other oil company cheerleaders say, the BP fiasco also reminds us why we should not put the fate of America’s wilderness in the hands of the oil companies.
BP has a lot of explaining to do, starting with why the ragged condition of its pipelines went undetected for so long. But it has already reinforced one lesson: True energy security does not entail more drilling, especially in Alaska.
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(9 Aug 2006)
