Sunday, August 06, 2006

BP shutting down large Alaska oil field

If they close Prudhoe Bay down, does that mean the U.S. will come knocking on Canada's door to tap our resources? We should keep an eye on this situation and make sure we maintain our Rights of Sovereignty in Canada. I guess this also means that gas prices are going to rise in the U.S. and Canada if a 400,000 barrel a day production stops. This does not bode well with the fall coming in a few weeks. The people are going to be hurtin' over this little tidbit of information.


ANCHORAGE, Alaska - 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.

BP says the spill has been contained and clean up efforts are under way. State and federal officials have been informed of the decision.

BP said it was sending additional resources from across the state and North America to hasten the inspection of the remaining transit lines. About 40 percent of the lines have been inspected.

BP previously said it would replace a 3-mile segment of pipeline following inspections conducted after up to 267,000 gallons of oil spilled onto the frozen ground about 250 miles above the Arctic Circle in March.

House Speaker John Harris said it was admirable that BP took immediate action, although it's sure to hurt state coffers.

"This state cannot afford to have another Exxon Valdez," said Harris, R-Valdez.


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