BP Closes Major Alaskan Oil Field

Due to a leak, British Petroleum announced an indefinite shutdown of the Prudhoe Bay field, which produces 8% of the US oil supply. Crude oil prices rocketed past $76.

“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,” said BP President Bob Malone in a statement.

WSJ reported the leak was around 200 gallons, which is less than five barrels.

While that might seem overcautious, BP is just exercising its short term memory. It wasn’t but this March 2, 2006, when a BP worker discovered a large oil spill in western Prudhoe Bay. Over 267,000 gallons splooged out, the largest ever on Alaska’s north slope.

Both the March 2 and this August’s oil splooge were due to a corroded pipeline.

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  1. Paul D says:

    I remember not so long ago when news reports breathlessly informed us
    that the price-per-barrel for oil had exceeded $40. Unprecedented! they
    said.

    Now it’s $76.

  2. Ben says:

    Oh, so now they are worried about the environment?

    (also – what percentage of the Gulf of Mexico hasn’t been repaired after the hurricanes of last year? Get a grip, America, we use a bunch of oil and it comes from some not-so-stable places, and every little blip is an excuse to jack gasoline prices up)

  3. something_amazing says:

    Seriously Ben…

    I heard on the radio that gas prices were expected to rise “10 dollars a barrel” because of this little incident. What surprises me is in that news report that the Alaskan oil field only supplies 2.5% of the nation’s oil.

    OK so where did the math get fucked up? If you assume that the current oil rate is 76$ (as quoted above), then by my ignorant understanding doesn’t that mean that the price should go up 2 dollars? OK so it’s an unstable market– but is that any excuse to raise the cost by 8% ??

  4. Ben says:

    Oil prices shoot up when a tropical depression forms in the Atlantic, just in case it might mess up an oil platform 1,000 miles away in the Gulf.

    There isn’t really any logic to it. This latest – that their pipeline was neglected long enough that they had to shut it down – is just the latest.

    Go figure – oil industry profits are at record levels, but they don’t inspect or maintain their equipment well enough to keep it functional. Why? Because when they close the field, prices go even higher, and profit will climb (just watch, I bet Exxon Mobil sets a new record this quarter, BP will write in all kinds of accounting contingencies related to repairs in this field so it’ll look on paper like they don’t have a record profit this quarter)

  5. Ben says:

    Oh, I’m so eloquent. “This latest is just the latest.” I’ll just be sitting over here waiting for my literature prize…

  6. AcidReign says:

    …..If there’s a silver lining to this, it’s that these high prices have made some previously unprofitable oil sites affordable. The shortages are spurring exploration, and reclamation of old oil fields. In my local paper today:

    http://www.al.com/news/birminghamnews/index.ssf?/base/news

  7. masd says:

    Environmentalist rejoice! Not only does enormous gasoline prices make people want to drive more efficient vehicals/appliances it’s also too much of a commodity to allowed to be spilled.