CNN/AP: Oil shutdown expected to hit West Coast hard

[DeepModem Mom]

Oil shutdown expected to hit West Coast hard
U.S. considers releasing oil from emergency stockpile
Tuesday, August 8, 2006

ANCHORAGE, Alaska (AP) -- BP's decision to shut down the nation's biggest oil field is expected to squeeze the West Coast particularly hard and the government is considering releasing oil from its emergency stockpile to ease the crunch.

BP said it discovered corrosion in the transit lines and will have to replace most of the 22 miles of the pipeline at Prudhoe Bay, which produces about 2.6 percent of the nation's daily supply including imports. (Watch BP man apologize -- 4.26)

Most of the crude oil produced out of Alaska's North Slope each day goes to refineries in Washington, California and Hawaii, said Joe Sparano, president of the Western States Petroleum Association, a trade group based in Sacramento, California.

The loss may hit Alaska hardest. Eighty-nine percent of the state's income is from oil revenue, and central to that cash flow is Prudhoe Bay. The expected loss of 400,000 barrels per day at today's oil prices means $6.4 million lost daily in royalties and taxes, Revenue Commissioner Bill Corbus said....

http://www.cnn.com/2006/US/08/08/oilfield.shutdown.ap/index.html

[marmar]

1. "U.S. considers releasing oil from emergency stockpile"

Hmmm. It must be an election year or something.

[klyon]

15. so we can fill it with real expensive oil

:wtf:

[jayfish]

21. The Cabal Is Going To Make A Killing On This One.-NT-

Jay

[TX-RAT]

23. Bingo

[acmavm]

2. That's what happens when all the billions they made went to

the bottom line, the profit margin, and they skimped on the cost of doing business which was upkeep and repair.

Greedy bastards.

[ixion]

4. which, ironcially, results in greater profits for them

nice deal, huh?

:crazy: :grr:

[acmavm]

7. The OPPOSITE of damned if you do and damned if you don't

[demnan]

3. I smell a rat

Watch this happen in other places too, just to raise the price of oil.

[Child_Of_Isis]

5. At 2.6 percent,

so do I.

[Poll_Blind]

6. Isn't this similar to what the power companies did a few years ago...

...taking power stations down for maintenance all, more or less, at the same time to drive up the price of electricity? This is how Californians got stiffed with that multi-billion-dollar bill...

PB

[acmavm]

8. I think we'll see a LOT of this shit until we get rid of the repubs.

They'll all be trying to cash in before it's too late.

Although I don't have that much faith in the dems putting a halt to it either.

[GliderGuider]

9. You'll see a lot of it afterwards, too

The reason everyone is so concerned about this is because of the lack of any global swing production capacity. If the Canadians or the Mexicans or the Norwegians or the Saudis could simply open the taps and replace 400,000 bpd there would be very little concern about this problem. With the global supply situation as bad as it is, there is no way to make up the shortfall beyond opening up the Strategic Petroleum Reserve. You can whale on BP and the other majors all you like, but the plain fact of the matter is that the profits they are making right now are not of their own doing. And while they may have skimped on their maintenance inspections (we don't actually know that yet), the sulphur reducing bacteria responsible for this corrosion can take hold over relatively short timeframes.

The panic and anger we're seeing right now are more the fault of geology than Big Oil - the fact that we're getting tapped out of oil globally means we can no longer respond to what in bettter times would have been a reltively minor hiccup. Laying blame won't help, and even electing Democrats won't fix the geology. This is what happens at Peak Oil.

[ForPeace]

10. Pity they "Killed the Electric Car"

If you haven't seen the movie "Who Killed the Electric Car" I highly recommend it. The EV1 worked but the oil companies could see no profit in it so killed it. If they hadn't done that we wouldn't be worried about oil shortages.

[Pierzin]

28. i just saw that today! go see it!!

[daleo]

11. I agree, that peak oil means this will become more common

A side effect of peak oil is that monopolists can play more games with supply, though. A more rational government would help to get the transition process going, but this is not in the cards right now. Even with the best of efforts the transition will be rocky.

[GliderGuider]

12. There are no monopolists in the oil world today.

The major oil companies control only a tiny percentage of global oil reserves, and they have even less control over thge pricce. The big players today are of course the national oil companies of Saudia Arabia, Venezela, the FSU etc. They could hold production off the world market, and prices could go up as a result. However, there's a strong case to be made for that being a good thing. The resulting early, smaller shocks would not only get us wroking on transition plans, but the restriction of supply means the transition plateau would last longer and give us more of a chance. However, I really don't think anyone is playing games with supply right now, with the potential exception of the FSU who are in a very precarious position. I also don't think anyone will restrict supply, especially given the geopolitical pressure they would come under. Nope - we will keep producing it. The fact that three of the four largest oil fields in the world are known to be in decline, with the decline of the largest (Ghawar) strongly suspected, means that we are hurtling towards the bad times with our foot firmly on the accelerator.

[maseman]

13. OK I have a conspiracy theory

Gee the weather experts were predicting another bad hurricane season beginning in June. Therefore the big oil companies could start building into their quarterly peformance the rise in oil prices due to "weather conditions."

Of course we have not had any of those predicted hurricanes yet so far so the oil companies have not been able to increase their barrels of oil as predicted. So, they needed another "crises." What better then some corroded pipes?

OK, far stretched, but nothing would suprise me.

[GliderGuider]

14. Far fetched is right.

The amount of oversight this litle problem is going to get makes any notion of a manufactured crisis preposterous. In this one everybody loses - BP, Alaska, consumers and the feds.

There are plenty of real crises in the petroleum world these days - no need to make them up. If you get off on being scared, start looking into Peak Oil seriously, with an emphasis on what's happening in Mexico, Kuwait and Saudi Arabia. Then read up on how a geological production limit could interact with the derivatives market and the fractional reserve banking system in general. Spend some time finding out exactly what we use oil for and what the realistic prospects for any replacements are (or aren't...). Find out what some people think could be the outcome of a 8% decline in global oil production sustained for a decade. Then read up on how likely an 8% decline is.

This stuff can give you nightmares. Trust me on that.

For an introduction, you can look at a Peak Oil Primer Powerpoint I've prepared to accompany a talk I'm going to be giving to Canadian audiences. Careful - it's over 6 MB.

[Lady Effingbroke]

24. Excellent Powerpoint, GliderGuider!

I think your talk will go very well! :thumbsup:

[GliderGuider]

26. Thanks!

I'm looking forward to giving it for the first time in the next few weeks. I've also been asked to modify it a bit for delivery to a group of Anglican church hierarchs. I've taken the bait, even thought I don't have a religious bone in my body. The title for the version they get will be: Petroleum, the Modern Manna: The Danger of Dominion and the Failure of Stewardship.

As well as the facts of Peak Oil, the talk will include the roles of human nature and church teachings in contributing to the crisis, and a discussion of the moral and spiritual challenges the church will have to deal with in the aftermath of the Oil Age. Should be fun! B-)

[Straight Shooter]

29. GliderGuider, do you have that in another format besides PowerPoint?

I don't have that program.

Are you a hangglider instructor? :)

[Canuckistanian]

22. Very informed post

You sound like an expert.

BTW, a belated welcome to DU from a fellow Ottawanian (well, actually, I just work there)

:toast:

[GliderGuider]

27. Not an expert, but I play one on the internets

Greetings to you too, fellow Canuckistanian. I love Ottawa - the place our tax dollars go to die.

I got shocked into Peak Oil awareness a couple of years ago, right after I cured my recto-cranial inversion and realized there was indeed a scientific consensus on anthropogenic climate change. What I started to hear about oil depletion concerned me so much that it has become my primary interest. I think it ranks a fair bit higher on the "imminent threat" scale than climate change.

[cliss]

16. OK, that's us DU:ers.

I'm in Portland Oregon and I'm fully expecting for gas to go up to around $4.50/gallon.

Last night I tanked up, and it was still $2.99/gal. That will change very quickly.

The problem is, we on the west coast (Washington, Oregon and not so much California) get almost all our oil from Alaska.

This is going to be bad.....

[Le Taz Hot]

17. We get 25%

from the BP Alaskan pipeline.

Now would be a good time to switch to public transportation if feasible.

[XemaSab]

19. Hah!

It's 3.49 here in Santa Barbara, where we DRILL for it. :eyes:

[Protagoras]

18. DESIGNED to hit west coast hard

and DESIGNED to shelter BP and deflect some attention away from their actually grotesque profits.

[catzies]

20. And we have an ELECTION here in CALIFORNIA this NOVEMBER

And I'm sure "Joe Sparano, president of the Western States Petroleum Association, a trade group based in Sacramento, California" KNOWS that. :mad:

[Tight_rope]

25. "Government is considering releasing oil from its emergency stockpile"

If they do that, what will the chimp use to go back and forth from the monkey ranch to DC.:spank: :think: