Prudhoe Bay oil field being shut down, 8% of U.S. production

[rzemanfl]

being interupted, 400,000 barrels a day:

http://news.yahoo.com/s/ap/20060807/ap_on_bi_ge/oil_field_shutdown

Think oil will go up Monday?

[rfranklin]

1. BP can use some of its massive profits to take up the slack...

This is total bullshit.

[rzemanfl]

3. Got a car that runs on cash? Mine takes gas. I agree that it is

bullshit that we are the victims of these oil companies.

[screembloodymurder]

58. It's amazing that all those billions in profits

can't even provide timely preventive maintenance on the pipeline. Seems like rust repairs should be made long before the pipe starts leaking.

[don954]

2. you here that sound?

that sucking sound?
that's the $ being sucked out of your wallet.

Oh ya, and that big CHA-CHING! is the oil-traders glee.

Tomorrow, expect oil to go up, the stock averages to drop, gas to go up, gold and all other metals up, and layoffs announced by friday.

[SpiralHawk]

4. Your cash being sucked into republicon crony pockets

the republicons are laughing at American working people -- all the way to the bank as Bush and Con cronies count up their massive profits.

[struggle4progress]

5. " ... a small spill ..." ?

BP chief executive visits site of spill, offers apology
John Browne says company will fix recent spate of problems

By WESLEY LOY
Anchorage Daily News

Published: August 6, 2006
Last Modified: August 6, 2006 at 03:19 AM

In Alaska, corrosion this spring chewed a hole into a major oil pipeline in the Prudhoe Bay field, which BP runs on behalf of itself and other owners, letting loose an estimated 201,000 gallons of crude across the tundra -- the largest oil spill on the Slope since production began there in 1977.

Browne was in Alaska last week to visit the spill site, and to deliver an apology and a promise to fix the company's problems.

Part of the remedy includes spending $50 million to clean or replace corroded and sludge-encrusted North Slope feeder pipes -- work federal pipeline regulators are demanding of BP ...

Although Prudhoe has produced some 12 billion barrels of crude and is rapidly draining, the field remains one of the crown jewels in BP's global portfolio. Overall, Alaska yields about one in every 10 barrels of oil BP pumps worldwide, and last year the firm reported $2.6 billion in profit on Alaska production alone ...

http://www.adn.com/front/story/8049215p-7942242c.html

[rzemanfl]

8. Tonight's article makes it sound like BP is doing this on its own,

as a "good corporate citizen." No mention of pressure by federal regulators.

[cleofus1]

6. BP begins shutdown of Prudhoe Bay oil field ....holy shit!

http://www.adn.com/news/alaska/story/8049449p-7942476c.html


"ANCHORAGE, Alaska (AP) - BP Exploration Alaska, Inc. began shutting down the Prudhoe Bay oil field Sunday after discovering unexpectedly severe corrosion and a small spill from a transit pipeline.
Prudhoe Bay represents about half of Alaska's oil production and about 8 percent of U.S. production, according to the U.S. Energy Information Administration. Company officials said it would take days to shut down the oil field. Once completed, it's expected to reduce oil field production by 400,000 barrels a day."We regret that it is necessary to take this action and we apologize to the nation and the State of Alaska for the adverse impacts it will cause," BP America Chairman and President Bob Malone said in a prepared statement.

Company officials said they did not know how long the field would remain closed."We will not resume operation of the field until we and government regulators are satisfied that they can be operated safely and pose no threat to the environment," Malone said. Officials learned Friday that data from an internal sensing device found 16 anomalies in 12 locations in an oil transit line on the eastern side of the field. Follow-up inspections found "corrosion-related wall thinning appeared to exceed BP criteria for continued operation," the company said in a release.

That's when workers also found a small spill, estimated to be about 4 to 5 barrels. A barrel contains 42 gallons of crude oil."

[Phrogman]

28. I hope the Iranians don't hear about this!

Might give them ideas....

[katty]

55. last $ killings before companies shift to alt energy-sucking

every last penny out of consumer pockets before any belly up.

[City Lights]

7. Swell.

Glad I filled up Friday.

[Vidar]

9. Anything to jack up the prices.

[Deja Q]

10. Well, that will encourage consumption...

Wait, that's what * said in 2001... what we need these days is a program to encourage conservation...

[CHIMO]

11. Wonder

What producers are in a short position. Katrina expectations on a second derivative?

[rzemanfl]

12. Huh? Please explain in non-stock trader terms for us folks who

only buy consumer goods.

[CHIMO]

13. Well

If a company was expecting the price of oil to go up, then they would not commit to future sales at the going market price. They would expect the price to be higher in the future.

Now if they expected more disruptions from hurricanes, then they would be expecting prices to go up.

Now given that computer modeling in the stock market projects prices, and they would use this to buttress their projections. One would expect that the big chiefs are expecting more than last year.

Their projections were not happening. So they then have to make it happen.

Once one becomes confident, then one just has to beat the market.

[alfredo]

14. Oh well, I guess it is time to overhaul the old Trek.

[cmutt]

15. it's criminal

Record profits, and they can't even afford normal upkeep on their infrastructure?!?

[tibbiit]

16. I wouldnt be surprised

If this has something to do with the Govenor and Oil Companies pushing for a giveaway oil tax for the companies, vs what the people and even some repigs in the legislature want to impose on the companies.

A horses head in the bed to the people of ak, to scare us into supporting frank the bank.
tib

[harpboy_ak]

25. It's suspicious right now

With the legislature in special session trying to raise oil taxes, isn't it? No production = no oil taxes = no state govt. income.

A lot of oil company exec jets at the Juneau airport the past several weeks.

[Kelvin Mace]

17. $4 by Labor Day

The oil companies now have free rein to gouge us until we bleed.

[mccoyn]

57. No they don't.

You and I are free to not buy the gas. There is no reason for them to keep prices low unless we exercise this freedom.

[Samurai_Writer]

60. yeah right... not buy gas...

and how are people supposed to get to work, where their car is the only means of transportation, genius?

[mccoyn]

62. Organize your life so you don't need to.

You can bike 10 miles to work every day. The vast majority of families should be able to find two jobs and an affordable home within that distance. It certainly can't happen overnight, but if you value your independance from oil it can work. As long as people don't value their independance from oil (and make choices to prove it) the oil companies still have the power to raise prices to whatever they want.

[Samurai_Writer]

65. What a naive statement

Not everyone can bike to work. Not everyone lives 10 miles or less from work. The 13 miles to my work is all up and down very steep canyon dirt roads with 1,000 foot drop offs on the sides. In the winter, there is at least 2 feet of snow on the ground. Not to mention, not everyone is physically capable of riding a bike. I have two torn ligaments in my left ankle, degenerative disc disease in L1-L5, along with a neurological disorder which makes physical activity very painful.

My son is in a wheelchair and cannot bike to his work. So you think we should just be homebound and starve because of our 'dependence on oil'? And don't give me that 'you can move closer to work' argument. You assume that all families have two incomes and can afford a home anywhere their job might be located. Do I move everytime my job is eliminated or my company closes? Plus, the real estate in the town where my job is, is at least twice as much as where I live, and I cannot afford the rent or mortgages there. And I am living on one income. Not everyone is married, you know.



The solutions are not as simple as you seem to think.

[Nabia2004]

18. I thought Alaska oil was sold to the Asian market?

According to an oil man I spoke with a few years ago, due to the high production costs, the vast bulk of Alaskan oil is sold to Japan and Korea.

[CHIMO]

19. Only For US Consumption

But the pipeline project remained tied up in U.S. courts until an OPEC oil embargo put new pressure on the government to exploit domestic oil reserves in late 1973. In November of that year, President Nixon signed the Trans-Alaska Pipeline Authorization Act to further "the national interest in early development of North Slope oil to domestic markets." The act sparked an outcry from activists who claimed that the government's environmental impact assessment was flawed and that the pipeline's approval process had run roughshod over 1969's National Environmental Policy Act (NEPA).

http://www.pbs.org/wnet/extremeoil/journey/alaska2.html

[Nabia2004]

48. Thank you - turns out 7% was exported from 1995 to 2000

...from a 2004 CRS Report

As a reaction to oil price and supply concerns, questions about the export of crudeoil produced on Alaska’s North Slope are often directed at Members of Congress. The export of this oil had been prohibited by the 1973 law allowing the construction of the pipeline system now transporting oil to the ice-free, southern Alaska port of Valdez. But following a period of depressed oil prices, legislation was enacted in 1995 permitting export. Relatively small amounts — never more than 7% — of Alaskan crude were soldto Korea, Japan, China, and some other countries. These exports stopped by 2000.

http://www.ipmall.fplc.edu/hosted_resources/crs/RS22142_050506.pdf#search='alaska%20oil%20export'

[Doremus]

20. Didn't they ever hear of 'routine maintenance'?

You'd think they could cough up some of their windfall profits to do some routine maintenance now and then, no? You can't tell me that a huge oil company doesn't know the lifespan of their pipelines.

Like CEI that let their nuclear reactor develop a huge hole and electric companies that are content to let their flimsy poles/lines blow down in the weather, these mega-corporations have better uses for their profits than stupid stuff like maintenance. :sarcasm:

So, just coincidentally of course, we all get to pay even higher gas prices because those nasty pipelines surprised everyone with their unpredictable decay. :sarcasm: :sarcasm:

[CHIMO]

22. Maintenance

Maintenance

The pipeline is surveyed several times a day, mostly by air. Due to the placement of the surveillance bases, the pipeline can be surveyed in just two hours, but most surveys take longer to ensure thoroughness. Other methods of surveying include regular pipeline inspection gauges ("pigs"), sent through the line. Some pigs are used to remove buildup of paraffin on the insides of the pipe, others have complex electronics which relay radar scans fluid measurements as they travel down the line.

http://www.answers.com/topic/alaskan-pipeline

The Trans-Alaska Pipeline

Alyeska is owned by six pipeline companies: BP Pipelines (Alaska) Inc., Exxon Pipeline Co., Mobile Alaska Pipeline Co., Amerada Hess Pipeline Corp., Phillips Alaska Pipeline Corp., and Unocal Pipeline Co.
http://72.14.203.104/search?q=cache:teirtlv16cAJ:fairbanks-alaska.com/trans-alaska-pipeline.htm+prudhoe+us+oil+%22trans-alaska%22&hl=en&gl=ca&ct=clnk&cd=1

[Doremus]

23. "...but most surveys take longer to ensure thoroughness."

Yes, so thorough they didn't know 12 sections of pipe were 80% decayed.

Corporate propaganda is so lame.

[CHIMO]

24. I

Think that it is the companies responsibility to maintain the pipeline so it is up to snuff. But, then I guess that depends on the deductible and who has to pay it in the end.

[Tesha]

39. Just so I'm clear on this...

Just so I'm clear on this:

What would you have done differently?

o What design changes would you have made?
o What maintenance techniques would you have instituted?
o What schedule would you have devised for the planned replacement of the pipeline?

I really hate to be in the position of defending an oil company (because
I hate those bastards with the heat of 10,000 suns), but I really need to
know: from a purely technical (engineering and economic) basis, what would
you have done differently?

Tesha

[Doremus]

63. For starters, how about using the best technology to check the lines?

And then doing so routinely, as opposed to only when forced to?

From the article:

"BP, the world's second-largest oil company, discovered the extent of the corrosion with tests that were ordered by the federal government after a big oil spill last March at Prudhoe Bay, situated above the Arctic Circle, 650 miles north of Anchorage.

The oil company said it was surprised to find such severe corrosion, and had gone 14 years without using a device called a "pig" to clean out its lines because it did not believe it was necessary."


Routine maintenance (as in frequent, thorough checking/cleaning of lines using the most advanced technology) would have detected these weaknesses as they occurred, probably avoiding the shutdown that 14 years of neglect have caused.

When profits and next month's financial statement trump all, we can't expect any other outcome. The Davis-Besse nuclear plant here in Ohio came within months or weeks of a meltdown because they skimped on maintenance. If not for a whistleblower, who the utility company later vilified, the whole thing may have blown. I guess we should be grateful for that "minor" oil spill a few months ago or BP would still be blissfully avoiding their responsibilities.

[mbperrin]

45. Hi from West Texas...spend 15 years in the wellhead business,

so a couple of things:
air surveys are not maintenance - when they see something, it's a leak. It's leak detection.
What else could be done? Same thing done at the wellhead - different metals, plastic coatings, ceramics, that sort of thing. But these majors are cheap and shortsighted. Conoco used to bring assemblies in for repair, and if they thought it was too much, just painted it and returned it to service. Course, here in marvelous Permian Basin territory, many resident are just brainwashed to think that the periodic leak of H2S and resulting civilian deaths are just a cost of having an industry in the area. And the truth is, they don't suffer from shutting down - they have many other barrels to sell, now at higher prices, and if you accept that price is inelastic for oil (and all the evidence says there is), they make more money this way. (Except for the eventual replacement of their whole system due to the substitution effect.)

Hope this helps a bit.

[OzarkDem]

21. Well they certainly are creative

You have to give them credit for that. Corrosion in the pipeline, not sure how long it will take to repair. :eyes:

The GOP must think its safe for their candidates to win with gas prices so high.

[Up2Late]

26. NPR just reported they are saying this will add $10.00 per barrel to...

...the price, and yes, it's already gone up a bunch in Japan today.

[katty]

54. $10.+ is plausible as the hysteria mounts

[Eugene]

27. Reuters: Oil soars above $77 on Alaska shutdown

Oil soars above $77 on Alaska shutdown

By Maryelle Demongeot and Janet McBride
Reuters
Monday, August 7, 2006; 5:15 AM

SINGAPORE/LONDON (Reuters) - Oil surged above $77 a barrel in Europe after BP
began shutting an Alaskan field that pumps 8 percent of U.S. crude and anxiety
over the Middle East, supplier of almost a third of the world's oil, ran high.

London Brent crude <CLOc1> climbed as much as two percent to $77.73 a barrel,
within reach of its all-time high of $78.18, on expectations that the United States
would scour European markets for replacement oil. At 0906 it was up $1.17 at $77.34.

-snip-

http://www.washingtonpost.com/wp-dyn/content/article/2006/08/07/AR2006080700134.html

[leftchick]

29. yikes!

I wish I had an electric car. :(

[symbolman]

30. What better excuse to invade and conquer ANWR?

Gee, our poor Prudhoe is running out of oil, time to drill the hell out of ANWR, screw the animals, and the best part is the price will go up..

BTW, for those that were around for the building of the Pipeline it wasn't designed or expected to last this long, I have no doubt that it's rusted like a mofo..

I think it's 20 years past it's expiration date.

I'm writing a book about my adventures in the 80's spending 18 hours a day flying all over Alaska in choppers, even crashing, and seeing ALL of ANWR for two summers.. I got the skinny on all this shit, the environment, the animals, the trashing of the tundra, abandoned stations, etc..

It's going to be a "nonfiction", but a lot of it will be so unbelieveable that some may think I made it all up :)

My goal is to make a film of it so that people can see for themselves firsthand the beauty and destruction, I think it will change a lot of minds, and inspire people deeply.

[DoYouEverWonder]

35. Sounds like a great project

Can't wait to see it.

[symbolman]

37. Think Bukowski meets Hunter Thompson with The Doors attitude

with some Buddism, or basic spirituality thrown in :)

I think it's time to make the Environment a Spiritual Movement, and the best way to do it is to show it, entertain the public, and sneak a profound feeling into them..

Hope ANWR's still there by the time it gets filmed :(

[screembloodymurder]

59. My thoughts exactly.

Expect a vote within the week.

[Fleshdancer]

31. Jeez

According to the talking head on CNN, this interuption is slightly less worse than the interuption during last year's hurricane season...although it will hurt more because of the already sky high gas prices. Let's just hope we don't have to deal with hurricanes in the near future that could make this situation even worse.

[niallmac]

32. I thought oil was what I used in my car to prevent corrosion.

Is it the sulfur(sulphur?) content?
Kinda sudden shut down no warning for a predictably
progressive problem like corrosion.
The Perma Frost melting is not the problem right?

[Tesha]

40. Speculations...

> Is it the sulfur(sulphur?) content?

I'm *GUESSING* that the engineers specified a certain steel alloy
that was expected to last "n" years when exposed to crude oil with
"x"% moisture, "y"% sulfides, "z"% carbonic acid (if they were
using CO₂ to help drain the field), etc.

I'm further guessing that the pipeline probably undershot their
expected lifetime by a little, but probably not by a huge amount.
It will be interesting to see the technical reports as real facts
emerge.

Tesha

[niallmac]

47. Thanks for the expertise. Also doesn't sound like a quick fix.n/t

[Tesha]

52. Here's on interesting bit of data...

A small fact from:

http://sfgate.com/cgi-bin/article.cgi?f=/n/a/2006/08/07/financial/f061740D59.DTL

> BP puts millions of gallons of corrosion inhibitor into the
> Prudhoe Bay lines each year. It also examines pipes by taking
> X-rays and ultrasound images.

Tesha

[Tesha]

64. More data...

BP says the oil flowing in that pipeline was "finished oil"
so it was already de-watered. Because of this, they apparently
didn't expect the level of corrosion they've now discovered.

On the other hand, it appears they have not been doing any
of the sort of the routine maintenance that is conventionally
done by th eoperators of oil pipelines. Up to the time of the
break in the feeder pipeline and the resulting oil spill, it
had apparently been years since they last ran a "pig" through
any of these pipelines, whereas standard practice apparently
is to run a pig through every week or two, if only to remove
the paraffin that accumulates on the pipeline's inner wall.

Sounds like BP's going to take a big fall for their practice
of "deferred maintainance".

Tesha

[liberal N proud]

33. Gotta get those gas prices to $5.00/gallon some how!

"We regret that it is necessary to take this action and we apologize to the nation and the State of Alaska for the adverse impacts it will cause," BP America Chairman and President Bob Malone said in a statement.

While he sits on on his bags of ca$h

[Ragin_mad]

34. Use the Strategic Oil Reserves to make up for any lost capacity

then require BP to replace that oil at NO CHARGE. That will teach them sorry bastards a lesson they won't soon forget.

[Nickster]

44. HAHAHAHAHAHA! Use the Strategic Oil Reserve? Not a chance! That

would cut into the exploitation of the American public. Can't have that now can we?

[jpak]

50. ChimpCo IS tapping the SRP in response

but no word about a quid pro quo...

[MiniMe]

36. Sounds like the Enron generated blackouts in the west n/t

[underpants]

38. You may not want to admit it but this is the greenie ENIVROS fault!!!

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x214032

[dapper]

41. BP shuts oilfield- When it rains it pours.

Note to Mod: I could not find this posted but I'm sure it has been. Please feel free to combine this.

http://money.cnn.com/2006/08/07/news/international/oil_alaska/index.htm?cnn=yes

It's just amazing- the Coincidences that happen, when it rains it pours. Oil up another 5 cents but I'm sure it will be up another 25 cents at the pump.

What's next? Civil war in Iraq causes attacks on oil refineries?

Sorry for being Cynical but... I hate this game, when will it be over?

Dap

[Horse with no Name]

42. It never ceases to amaze me

that on the tails of record profits, that a company would allow their infrastructure to deteriorate to such a level.
No doubt waiting on a government handout to repair it.:mad:
I think it is time for the oil to be nationalized.
Why should Big Oil reap record profits and not have to upgrade or at least maintain their infrastructure on their own dollar?

[catmandu57]

46. They already got a handout

14 billion dollars in tax cuts on top of record profits.

[Nickster]

51. How can you possibly expect them to get by on that paltry sum?

Besides, what's a few more billion amongst friends anyways?

[AndyA]

43. This pipeline responsible for providing 8% of U.S. oil according to

CNN. I would think this pretty much demands a response from The Bush Gestapo Administration. Gas is a NECESSITY in the United States, not an option. With the crisis in the Middle East, poor relations with Venezuela, and now a major supply of oil cut off, something needs to be done. If Bush just sits around with his thumb up his ass, and does nothing, it is further proof of his irresponsible handling of his job duties, and yet another nail in the impeachment coffin.

A good President would take steps to minimize the impact of the cost of oil to the citizens of the country.

If prices do go up, I hope it OUTRAGES people, and they take their outrage to the polls in November and vote the GRAND OIL PARTY OUT OF OFFICE!

[rodeodance]

49. Oil Prices Surge as BP Shuts Down Oil Field (WP)

http://www.washingtonpost.com/wp-dyn/content/article/2006/08/07/AR2006080700131.html
Oil Prices Surge as BP Shuts Down Oil Field

By Fred Barbash
Washington Post Staff Writer
Monday, August 7, 2006; 9:08 AM

Worldwide crude oil prices surged today after BP oil announced that it was shutting down its Prudhoe Bay oil field in Alaska following discovery of a small leak and corrosion in a pipeline.

.........

"Oil prices could increase by as much as $10 per barrel given the current environment," Emori said, though he said it was too early to tell what would be the exact effect.

Light, sweet crude for September delivery on the New York Mercantile Exchange climbed $1.74 to $76.50 a barrel in electronic trading by afternoon in Europe. At London's ICE Futures exchange, Brent crude for September jumped $1.22 to $77.39 a barrel.
BP, in a press release, said its engineers discovered a small leak and wall-thinning in a 22-mile long transit pipeline while conducting maintenance on August 4. It said analysis of data revealed 16 anomalies in 12 locations in the pipeline.

[Doctor_J]

53. No change here in DuPage Co. yet

$3.25 - same as last week.

[TexasLawyer]

56. "Get Shorty"

I don't know-- the cynic in me immediately thought of some of the Enron style con games that monkeyed with supply and demand into and out of a market.

Anyone remember "Death Star," "Fat Boy," "Ricochet," and "Get Shorty"?

[Megahurtz]

61. Sounds pretty suspicious to me.

More games. What else is new?

[DemCapitalist]

66. Not to me.

It sounds like they didn't expect these lines to deteriorate within the specified time-frame. With oil prices being where they are, the owners will not be happy with management.