Monday, August 07, 2006

Another reason we shouldn't drill in ANWR

Aside from it not being anything other than a boon for the oil companies. From CNN:

BP shuts largest U.S. oil field due to damaged pipeline

NEW YORK (CNNMoney.com) -- In a blow to drivers already struggling with high gasoline prices, BP was forced to shut off about 8 percent of the nation's oil supply after discovering "unexpectedly severe corrosion" in the Alaskan pipeline.

BP announced early Monday that the pipeline problems had caused it to begin the first shutdown ever in the biggest oilfield in the United States, Alaska's Prudhoe Bay.
...
Oil analyst Peter Beutel, president of Cameron Hanover, said shutting down an oil field is an expensive and risky step that is only taken in extreme circumstances. He said that suggests the 400,000 barrels a day produced in Prudhoe Bay could be shut off for some time to come.
...
And the funny part
Beutel said he expects about a 5 cent a gallon rise in gasoline futures due to the pipeline problems.


So futures will go up 5 cents. How much do you expect we'll see at the pump? A quarter? It went up 20 cents this week for no apparent reason.

The outage will cut global daily oil output by about half a percent, putting more strain on an already tight market. Beutel said he believed the news in Alaska was outweighing even new threats out of Iran to shut production there if that country is hit with United Nations sanctions over its nuclear program.

"This is almost all Alaska," he said about Monday's price hikes. "It doesn't look like something that will have a quick fix or can be ignored by the markets. I think it's going to be measured in weeks, not days, and it could drag on for months."

1 comment:

schmidlap said...

I read some more on this (can't find the link right now) which stated that shutting down production in an orderly way is a major engineering project in its own right. And, worse, if they screw that part up, there is a risk that when they eventually turn it back on, they may lose some efficiency, or, even worse yet, "lose" some of the oil in the ground such that it could never be pumped up.

This is serious, serious shit.