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"We're taking a very serious look at this," said spokesman Craig Stevens, referring to the loss of nearly half of oil shipments from Alaska's North Slope because of a pipeline corrosion problem.
Stevens said the department will be in contact with BP Exploration Alaska Inc. and West Coast refiners later today to assess the situation. "If there is a request for oil we'll certainly take a serious look at that," he said.
The Strategic Petroleum Reserve is the nation's emergency stockpile of crude oil. It was created after the 1973 oil embargo when Arab countries halted petroleum exports to protest U.S. support for Israel.
BP Plc said late Sunday it would shut down the Prudhoe Bay oilfield, which represents 8 percent of daily U.S. crude production, due to possible pipeline corrosion. As a result, crude oil futures surged $1.44 to $76.20 per barrel in electronic premarket trading on the New York Mercantile Exchange.
The spike in oil prices weighed heavily on investors concerned about another rate hike from the Fed. While the economy is slowing, leading many analysts to declare that the Fed would not raise rates Tuesday, there's concern that rising energy prices could lead to broader inflation or a halt to economic growth.
Originally posted by Britguy
Still, that's capitalism at it's best I guess
The aging pipeline system on the North Slope has been fraught with problems lately. BP, which posted a net profit of $7.3 billion for the three months ending June 30, operates the Prudhoe Bay field.
BP PLC said Monday it will replace 73 percent of the pipelines from the nation's largest oil field and that it could be closed for weeks or months, crimping the nation's oil supplies at a time of peak demand.
BP, the world's second-largest oil company, began shutting down the pipelines on Monday and said it would replace 16 miles of the 22 miles of transit pipeline in the Prudhoe Bay field following a leak discovered Sunday.
Originally posted by centurion1211
I see it as more likely BS to artificially keep oil prices high.
Also, I had heard that Alaska oil is sold overseas, and not to the lower 48. So, why all the hand wringing over shortages, etc?
[edit on 8/7/2006 by centurion1211]
Just 4 percent of North Slope oil trickled to Asia between 1996 and 2000, before the flow shut off almost entirely. Since then, the only export was a single tanker in 2004, which delivered a load of oil to China en route to getting repaired at an Asian port.
The reason is that Alaskan oil fields aren't gushing crude as they once did. Alaskan oil production was cut in half between the 1988 peak and 2000. Now West Coast refineries soak up nearly every drop, according to data from the federal Energy Information Administration.
Originally posted by Icarus Rising
...it doesn't surprise me that you would introduce partisan politics to the issue.
BP may not completely shut Prudhoe Bay oil field
Oil major BP Plc (BP.L) is studying ways to avoid a complete shutdown of its Prudhoe Bay oil field in Alaska by using other pipelines to bypass the oil transit pipelines it is shutting down following the discovery of significant corrosion on one transit line over the weekend, a BP Alaska spokesman said.
BP does not intend to continue production without receiving support for its plans from state and federal regulators and a complete shutdown is still being planned, Daren Beaudo said.
everyone knows who's preventing drilling in that area.
by Icarus Rising:
They were using ultrasound and another method, not 'pigs', to check the thickness of the pipe walls, and thought it wouild be sufficient, as most of the water had been removed from the oil they were shipping through the pipe. When they finally did send in the 'pig', they realized they had a major problem, or so the story goes.
It wouldn't surprise me if BP is able to secure federal funds to help with the repairs, just as it doesn't surprise me that you would introduce partisan politics to the issue.
The proposed pipelines will be constructed for a lifetime of a minimum of thirty years.
This is typical of production pipelines on the North Slope. Pipelines can be operated
indefinitely under most circumstances, with the appropriate level of maintenance.
The lifetime of the Alaskan pipeline is now estimated to be many years shorter than originally planned. At that time, perhaps a decade from now, we will undoubtedly hear more about aggressive last-ditch countermeasures being employed to plug leaks, or replace whole sections of the pipeline. Some of these problems may arrive sooner than later. In 1990, plans to increase the pressure in the Alaskan pipeline had to await the results from a detailed federal investigation of the pipeline's corrosion. Although investigators turned up evidence of gross negligence on the part of the pipeline inspectors, they gave the project a clean bill of health and allowed the higher pressures to be used.
BP PLC announced it would keep one side of the Prudhoe Bay oil field open as it replaces corroded pipes, enabling it to funnel up to half its previous output and avert a larger crimp in the nation's oil supply.
The company said Friday it decided to continue supplying oil out of the western side of the field after reviewing 1,400 ultrasound inspections on five miles of the 22-mile pipeline and discussing the matter with federal and state regulators.
Pigs, in this context, are bullet-shaped devices pushed through pipelines by the force of the oil behind them. One type of pig, the scraper or cleaner, scours sediment and other deposits from the pipe's inner walls as it goes. After that, a more sophisticated smart pig can move through with sensors that gauge corrosion and wear.
An early version of the scraper, made of a wooden keg wrapped in burlap and barbed wire, emitted a pig-like squeal as it moved, giving the gadget its colorful name.
"When we conducted an intelligent pigging, which gives you a lot of data, we were shocked and disappointed in what it found," BP spokesman Neil Chapman said. "... Because what it said was that the effectiveness of our (corrosion) program -- we had a gap in the program and we're going to fix it."