Pipeline in Peril

Winningreen Issue Alert       A091411

Pipeline in peril

By Gretchen Randall

Date: September 14, 2011

Issue:
  The Trans-Alaska pipeline which carries petroleum from wells at Prudhoe Bay eight hundred miles to the Port of Valdez is approaching the point of being shut down and dismantled.  The first well, known as Prudhoe State Bay No.1, struck oil in 1968 in what turned out to be the largest oil field in the U.S. and one of the largest in the world. However, it was located 250 miles north of the Arctic Circle.

That led to the need for a pipeline to transport the oil to ports where it could be transported to refineries.  The Trans-Alaska pipeline took three years and seventy thousand workers to build while confronting the Arctic temperatures.  In 1977 when the pipeline opened, about 500,000 barrels a day flowed through it.   At the peak production level in 1988, the pipeline carried 2 million barrels a day.  As older fields have become depleted and it has become more difficult to extract the remaining oil, the amount of oil flowing through the pipeline has steadily decreased to about 500,000 barrels a day.

Experts warn that with less oil flowing through the pipeline, the cold temperatures outside can damage the pipeline.  If the pipeline isn’t carrying enough petroleum to keep it safe, it could be forced to shut down. If this happens, according to the law, it must then be dismantled.  To avoid this, additional production is necessary off the coast of Alaska but the Obama administration has not allowed permits for new exploration wells in the area.

For instance, The U.S. Environmental Protection Agency (EPA) this spring refused to give Shell Oil the necessary air permits to begin exploration off the Alaska coast in the Beaufort and Chukchi Seas.  This comes after Shell spent $2.2 billion on leases and over four years planning for the drilling which cost another $4 billion.  According to EPA, the permits were refused because Shell had not included in its environmental impact statement the emissions that might come from an ice-breaking vessel used in the operation.

Other areas that could contribute to the petroleum supply for the pipeline and the U.S. economy are:
    • ANWR which contains 10.4 billion barrels of oil and 8.6 trillion cubic feet of natural gas
    • The National Petroleum Reserve contains 10.6 billion barrels of oil spread over 23 million acres
    • Alaska’s outer-continental shelf contains 25 billion barrels of oil  

Comment: If  President Obama wanted to lower the unemployment rate, increase oil production in the U.S. and eventually increase our exports, he could approve oil and gas exploration in Alaska, the outer continental shelf and the Gulf of Mexico.

Links: Read more in the Wall St. Journal at: http://professional.wsj.com/article/SB10001424052748704570704576274682119735102.html?mg=reno-secaucus-wsj and more about how our government is prohibiting increased Alaska oil exploration: http://www.instituteforenergyresearch.org/2011/02/23/u-s-government-shuts-out-increased-alaskan-oil-production/

Contact: Gretchen Randall
Winningreen LLC
Chicago, IL
Phone: 773-857-5086
e-mail: grandall@winningreen.com