BP shuts down major Alaskan oil field; poop to hit fan

Wouldn't Be Prudhoe

Oil giant BP will temporarily shut down production at its Prudhoe Bay oil field, after "unexpectedly severe corrosion" and a small spill were discovered in an oil transit line on Sunday. That could mean trouble: the Prudhoe field represents nearly half the production from Alaska's North Slope, some 400,000 barrels a day, about 8 percent of total U.S. production. It will take a few days to shut things down, but once the oil is offline, the impact on prices could be substantial -- a bump of up to $10 a barrel, according to one analyst. Alaska could suffer up to $4.6 million a day in lost revenues. Though BP may win some points for its better-safe-than-sorry approach, the shutdown represents unwelcome attention for a company that has faced a series of PR disasters, from a massive oil spill in March, to an explosion at a Texas refinery in March 2005, to propane market price-manipulation charges in early 2004. Ah, oil addiction ... never a dull moment!

straight to the source: San Francisco Chronicle, Associated Press, Mary Pemberton, 07 Aug 2006

straight to the source: Anchorage Daily News, Wesley Loy and Richard Richtmyer, 07 Aug 2006

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Comments: (6 comments)

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oil

Would't you know...........one more nail in the coffin of oil consumption . You would think that all of these companies who are making unheard of profits could be maintaining their operations and equiptment at all times. It is time for greed and stupidity to be inexcusable, not the accepted norm.

by coveark at 8:48 AM on 08 Aug 2006

BP shuts down major Alaskan oil field

Everyone is crying about the cost to American consumers. No one, at least from what I have seen, has said anything about where all the increases to the price of oil is going. Since it certainly won't cost the producers any more to produce, it must be profit. Sure is a convenient time for a situation like this to arise!

Would it be so difficult to maintain prices at current levels, even with the reduction of supply? It's not like the producers are going to lose money.

Supply and demand, isn't it wonderful?

by srspellman at 9:37 AM on 08 Aug 2006

Spill 'Er Up

While Miss Cleo is famous for her future-telling, Alaskan BP workers' predicted this would happen. Since 1999, BP technicians and other workers have publicly voiced concerns about the company's poor maintenance record in Prudhoe Bay. After a 2001 oil spill leaked thousands of gallons of Alaskan oil, workers wrote a letter to company claiming "a major catastrophe is imminent." A similar spill happened in 2003. Now--five months after yet another oil slick--BP is indefinitely shutting down its Prudhoe Bay facility for repairs and cutting roughly 8 percent of total U.S. domestic oil production.

Unfortunately, Congress sees diversifying our energy mix as adding oil from the Atlantic.

Don't let polluters get the last word. Sign up for SNAP at www.newenergychoices.org!

by Matt Painter at 12:24 PM on 08 Aug 2006

yes, srspellman

Notice this bit from the ADN article that Daily Grist links to:

Robynn Wilson, state tax director, estimated the Prudhoe Bay shutdown will cost the state roughly $6.4 million a day.
She said, however, the state won't really be losing any money.
"This is not lost income. It would only be deferred," she said. "When the field is brought back online, there will be a surge in production."

So if oil prices spike because of the shutdown, they can sell all that backed up oil at even higher prices when they decide to come back online. Kind of like knowing when the stockmarket will peak before it drops ...

Frequently asked technical questions about Grist's newsletters and website.

by Corey McKrill at 4:03 PM on 08 Aug 2006

Pipeline Shutdown & Gas Price Increases

Isn't it just such a bad coincidence that a multi-billion dollar company HAPPENS to discover that its pipeline is dangerously corroded after having 30 YEARS to inspect it, just when oil prices have hit $3 a barrol. And just when Congress is going to switch over to the lesser bribed party and might investigate these shananogans. Its time to make hay when the sun is shining...and there's Billions in short term profits to be made before the Good Oil Party totally loses power (comparatively).
My what an untimely co-incidence for us poor consumers?

by nealcran at 6:29 PM on 08 Aug 2006

More industry self (no) regulation.

Good old green and yellow (for solar power?) BP. The biggest oil spill ever from the pipeline 5 months ago, whistleblower warnings suppressed for years.

They haven't pigged (sent a plug through that cleans and inspects it) the pipe for 10 years and stopped injecting anti-corrosion chemicals, all to save money on maintenance.

Save a few bucks when they have record profits? By insuring their pipeline will be closed down for months, a sure loser in terms of revenue from that oil? How is that done?

By manipulating oil markets with an artificial shortage they can blame on the pipeline problem in order to boost oil prices.

This disaster was coming for years and even casual market watchers knew it. People like me who would never own an oil stock. We knew a new Alaskan boom was coming soon, not from ANWR drilling, but from the maintenance now made urgent by war related oil price spikes.

This pipeline upgrade may exceed the original pipeline buildout in employment and an Alaskan economic boom.

And look at the political pressure it will bring to bear for ANWR drilling. A big win for the oily crew wrecking our planet.

http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin

by amazingdrx at 6:33 AM on 09 Aug 2006

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