Alaskan Oilfield - Total Shutdown

[Zzzzzzzzzzzzzzzzzzzzzzzzzz]

Heard yesterday that the US has closed down its Alaskan oilfield, due to serious pipeline corrosion, and various other infrastructural problems - it will be out of production for some time - oil markets will react badly no doubt.

http://seattletimes.nwsource.com/html/loca...423_oil07m.html

http://news.bbc.co.uk/1/hi/business/5251458.stm

Edited August 7, 2006 by gruffydd

[tinecu]

Heard yesterday that the US has closed down its Alaskan oilfield, due to serious pipeline corrosion, and various other infrastructural problems - it will be out of production for some time - oil markets will react badly no doubt.

http://seattletimes.nwsource.com/html/loca...423_oil07m.html

http://news.bbc.co.uk/1/hi/business/5251458.stm

This is SERIOUS!

Oil prices will leap further....economic downturn guaranteed....inflation forcasts must be revised upward.

[boo]

This is SERIOUS!

Oil prices will leap further....economic downturn guaranteed....inflation forcasts must be revised upward.

Wont good old Gordon Brown just says its "temporary" so we can ignore it and our inflation will not be affected?

[oracle]

This is SERIOUS!

Oil prices will leap further....economic downturn guaranteed....inflation forcasts must be revised upward.

impeccable timing don't ya think???

..just getting into hurricane season proper and BP have announced the shutdown,which will be for several months.

Chevron and exxonMobil also have a stake in the pipeline which supplies the west-coast refineries.The US administration have said they'll release oil from the strategic reserves to cover it,and are making overtures to Saudi to make up the shortfall.

Problem is,transport of the Saudi oil will take 6 weeks,and that ASSUMES no more flare-ups of violence in the region....and what if there is a repeat of hurricane katrina which knocks out supply and refining capability in the gulf??

$100bbl here we come.

[redwing]

And add in this bit of news from the Guardian

Iran threatens to use 'oil weopon' in nuclear stand off

The 'weopon' being they are threatening to turn off their oil supply.

Iran is the fourth largest oil producer and is reported to have the second largest reserves.

Edited August 7, 2006 by redwing

[Realistbear]

http://www.signonsandiego.com/news/busines...d-shutdown.html

ASSOCIATED PRESS

12:32 p.m. August 7, 2006

Associated Press

Bob Newton uses ultrasound Friday to scan a section of pipe looking for weak spots along an oil transit pipeline that leaked 200,000 gallons of oil in March 2006 at the Pardoned Bay oil field on Alaska's North Slope.

ANCHORAGE, Alaska – BP PLC said Monday it will replace 73 percent of the pipelines from the nation's largest oil field and that production could be closed for

weeks or months, crimping the nation's oil supplies at a time of peak demand.

And we are supposed to believe this was unforseeable? Corrosion in the pipes of a multi-billion pound industry vital to the interests of the UK and the West and no one noticed it? Umm-hmmm.

And the timing? Impeccable--just as demand peaks and the Hurricanes are due in the Caribbean.

No no no no, this is another scam. $100bbl soon and very soon.

All together now at the Oil companies: "We're in the Muneeee"

[Zzzzzzzzzzzzzzzzzzzzzzzzzz]

There are hundreds of miles of pipelines on that oilfield. What the hell are the managers at BP playing at? No wonder their motto is Beyond Petroleum - totally useless!

Edited August 7, 2006 by gruffydd

[Willy Weasel]

RB - I thought this story first broke last week when someone discovered the leak. I don't think BP will get richer by reducing output by 400,000 barrels a day

[Realistbear]

RB - I thought this story first broke last week when someone discovered the leak. I don't think BP will get richer by reducing output by 400,000 barrels a day

They will probably produce less but get more for the oil they do produce. Since oil companies appear to work together, who knows, they may divvy up the extra windfall.

[IamSpartacus]

No no no no, this is another scam. $100bbl soon and very soon.

All together now at the Oil companies: "We're in the Muneeee"

Care to explain why the BP share price fell 2.12% today?

[Realistbear]

Care to explain why the BP share price fell 2.12% today?

Punter's reaction. BP don't care about the shareholders its the mega bucks they are after and $100 bbls is within sight if they curtail production. I am sorry, but I find all of this too suspicious. Corrosion in the pipeline? Sounds like one of Billy Connolly's stand up routines.

Hauld OHHn theres one in the Pipeline!

[IamSpartacus]

Punter's reaction. BP don't care about the shareholders its the mega bucks they are after and $100 bbls is within sight if they curtail production

Punters? I think you mean highly paid and talented analysts. Jealous?

Who do you mean by "BP"? Lord Browne? I think you'll find that the shareholders have a legal right to any excess profits and can oust any board of directors they aren't happy with.

[oracle]

There are hundreds of miles of pipelines on that oilfield. What the hell are the managers at BP playing at? No wonder their motto is Beyond Petroleum - totally useless!

Bp.....Bloody Predictable!!!

Barefaced Profiteering!!!

Buying Plutonium????

[music man]

So is it a good time to buy a house then?

Yip a dee doo daa yip a dee day, My o my what a wonderful day.

I can't believe I'm happy that the greedy home owning generation sucking leaches are gonna have to pay at last. At bloody last!!

It was gonna happen and the question to me is how it will be orchestrated. I think we'll see from now on, just as bankrupcies were stabilising as well - ahh. I'm sorry for the genuine home owner and not for the profit making bankwagon screw you neighbour profiteer builder.

Hey do I sound like a non-capitalist - oops.

Wollop, what a picture what a photograph.

This could be so serious that house prices must go up further. After all with the one main component of oilised / industrialised society is energy generation for a consumer led society.

With less consuming there is a slump in manufacturing as we all know. And inflation is gonna go. Interest rates on the way up for now I think. time will tell.

[IamSpartacus]

So is it a good time to buy a house then?

Yip a dee doo daa yip a dee day, My o my what a wonderful day.

I can't believe I'm happy that the greedy home owning generation sucking leaches are gonna have to pay at last. At bloody last!!

It was gonna happen and the question to me is how it will be orchestrated. I think we'll see from now on, just as bankrupcies were stabilising as well - ahh. I'm sorry for the genuine home owner and not for the profit making bankwagon screw you neighbour profiteer builder.

Hey do I sound like a non-capitalist - oops.

Wollop, what a picture what a photograph.

This could be so serious that house prices must go up further. After all with the one main component of oilised / industrialised society is energy generation for a consumer led society.

With less consuming there is a slump in manufacturing as we all know. And inflation is gonna go. Interest rates on the way up for now I think. time will tell.

Have you been drinking?

[Sledgehead]

And we are supposed to believe this was unforseeable? Corrosion in the pipes of a multi-billion pound industry vital to the interests of the UK and the West and no one noticed it? Umm-hmmm.

In a former life I used to work for a corrosion consultancy and inspection services group (I was a member of NACE - the N.American Corrosion Engineers, - the only real use I ever had for a chemistry degree). One of our clients was BP. I have to tell you that maintenance is the LAST thing on the minds of oil companies (actually, almost any company - another of our clients was Thames Barrier and they hated us turning up telling them works were necessary - if I had not have been so forceful on certain occasions, who knows how much water the capital could now be under! ).

Maintenace just ain't sexy. It also has the nasty habit of reducing profitability, both from direct costs (small) and indirect costs - downtime of installations or infrastructure (huge). In a business where management and shareholders share the same interests, this would not be a problem. However modern remuneration packages depend not on long term sustainability but on profitability. It' s hardly surprising therefore that management prefer to open new installations (earnings enhancing) rather than report increased maintenance costs on old installations (earnings imparing).

Maintenance, which should be a preventative measure, all too often becomes a corrective measure. That makes budgetting for corrosion consultancy and inspection firms difficult, especially in the oil business. When times are lean, they don't want the expense, but when times are good (high oil prices) they don't want the downtime. Hardly surprising then that my employer went bust.

Seeing the world pay $2 a barrel more for oil, or $161,454,840 / day, somehow seems like poetic justice on a grand scale!

[DabHand]

Have to agree on the timing comment. To me this brazen supply manipulation indicates a maximisation of a rapidly dwindling stock. Perhaps things are much worse than any peak oil 'nut' could predict. Or maybe its late and l've had one or two ales.

[Sledgehead]

Have to agree on the timing comment. To me this brazen supply manipulation ....

Look, you ain't gonna intentionally off-line your production in the middle of an oil price boom. Try and remember that BP are gonna take a hit from this. Why would they agree to be the fall-guy for world oil production? Why not Exxon or Shell?

[kevino]

http://www.signonsandiego.com/news/busines...d-shutdown.html

ASSOCIATED PRESS

12:32 p.m. August 7, 2006

Associated Press

Bob Newton uses ultrasound Friday to scan a section of pipe looking for weak spots along an oil transit pipeline that leaked 200,000 gallons of oil in March 2006 at the Pardoned Bay oil field on Alaska's North Slope.

ANCHORAGE, Alaska – BP PLC said Monday it will replace 73 percent of the pipelines from the nation's largest oil field and that production could be closed for

weeks or months, crimping the nation's oil supplies at a time of peak demand.

And we are supposed to believe this was unforseeable? Corrosion in the pipes of a multi-billion pound industry vital to the interests of the UK and the West and no one noticed it? Umm-hmmm.

And the timing? Impeccable--just as demand peaks and the Hurricanes are due in the Caribbean.

No no no no, this is another scam. $100bbl soon and very soon.

All together now at the Oil companies: "We're in the Muneeee"

Yeah, my shares are doing ace thanks.

Maybe I should ask for a pay rise as well....................

[clv101]

An interesting question to think about is why minor incidents like that are having such significant global impacts where a decade ago they were non-events.

The answer I believe is that we no longer have a ‘swing producer’. Note that we saw essentially no production response from Saudi Arabia last year after the hurricanes. Texas served as swing producer from about 1935 to 1970. Saudi Arabia from about 1970 to 2005. The new swing producer is the release of emergency reserves. The problem is replenishing the reserves.

As oil fields are depleted there now isn’t the spare capacity to cover minor incidents. It’s no conspiracy, it’s a wholly predictable response as the world approaches ‘peak oil’.

[kevino]

Bp.....Bloody Predictable!!!

Barefaced Profiteering!!!

Buying Plutonium????

Or how about:

Bloody Propping up the FTSE and SHELLing out for your pension funds........................

[rockdoctor]

BP must have been seriously cutting corners to keep the oil flowing.

I thought all pipelines were regularly 'pigged' - a 'pig' being a robot device that is placed into the oil pipe and swept along by the flow of oil. As it travels down the pipe it logs the internal condition of the pipe.

The corrosion in the 16 miles of rotten pipe was so bad that it had started to leak - surely any pig could have picked that up?

I'd be asking what the regulators were doing to let BP away with letting it get this bad.

[OnlyMe]

I'd be asking what the regulators were doing to let BP away with letting it get this bad.

Crossing their fingers?

Who knows what goes on behind closed doors, maybe BP were being encouraged to keep supply going as long as possible. Threats of fines over spillages may have been the turning point, BP then decided OK we'll take all the toys away with us, it's shut, OK? Whilst we fix it properly. Now how do you feel about it?

[Fancypants]

In a former life I used to work for a corrosion consultancy and inspection services group (I was a member of NACE - the N.American Corrosion Engineers, - the only real use I ever had for a chemistry degree). One of our clients was BP. I have to tell you that maintenance is the LAST thing on the minds of oil companies (actually, almost any company - another of our clients was Thames Barrier and they hated us turning up telling them works were necessary - if I had not have been so forceful on certain occasions, who knows how much water the capital could now be under! ).

Maintenace just ain't sexy. It also has the nasty habit of reducing profitability, both from direct costs (small) and indirect costs - downtime of installations or infrastructure (huge). In a business where management and shareholders share the same interests, this would not be a problem. However modern remuneration packages depend not on long term sustainability but on profitability. It' s hardly surprising therefore that management prefer to open new installations (earnings enhancing) rather than report increased maintenance costs on old installations (earnings imparing).

Maintenance, which should be a preventative measure, all too often becomes a corrective measure. That makes budgetting for corrosion consultancy and inspection firms difficult, especially in the oil business. When times are lean, they don't want the expense, but when times are good (high oil prices) they don't want the downtime. Hardly surprising then that my employer went bust.

<sigh> why does none of this surprise me? The problem with contemporary civilisation in microcosm. No thought for tomorrow - the next generation - the future. Who cares? It's all about me, it's all about now.

2 million years of human history, don't we have a duty to pass this on, or are we the very pinnacle?

[DabHand]

Look, you ain't gonna intentionally off-line your production in the middle of an oil price boom. Try and remember that BP are gonna take a hit from this. Why would they agree to be the fall-guy for world oil production? Why not Exxon or Shell?

Fair point, however l am sure the late night bbc news indicated there were other large oil companies (other than BP) who also had some sort of operational stake in this pipeline. l'll see if l can find a link.