Tuesday, August 08, 2006

BP Alaska Pipeline Shutdown

The news report is as follows:
BP began a complete shutdown of the giant Prudhoe Bay oil field after a leak onto the tundra raised new and troubling questions about dangerous corrosion of North Slope pipelines.

The extraordinary shutdown will reduce the flow of all North Slope oil by 400,000 barrels a day -- nearly half the Slope's normal output -- and could rattle oil and gasoline markets. The shutdown also will crimp state tax and royalty revenue by millions of dollars a day.

Shutting down the field and its roughly 1,000 wells will take days to complete, and BP executives said the field will stay down until the company can prove the pipes are safe to operate or until other pipes can be used or built to bypass bad ones.

Company managers decided to shut down the entire field as a precaution and start an intense new round of inspections to see whether the pipes are safe to operate.

BP already had been under intense pressure to deal with corrosion and maintenance problems that in recent months have drawn the scrutiny of state and federal pipeline and pollution regulators, members of Congress and federal criminal investigators.

The scrutiny came in the wake of a corrosion-related spill from another Prudhoe pipeline that sent an estimated 201,000 gallons of crude over about 2 acres of tundra. That spill, discovered March 2, was the largest on the Slope since oil production began there in 1977.
Is this a company getting caught? Is this political maneuvering? It this an attempt to decrease supply (so revenues per gallon go up)? Is it just one of those inevitable maintenance issues?

Just like hurricane Katrina impacted our ability to refine oil at an appropriate level, this oil flow problem in Alaska demonstrates how many bottlenecks and single points of failure we have in our energy system.

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