Wednesday, May 23, 2007

BP Shuts 100,000 Barrels of Alaska Oil

From the AP via the Huffington Post courtesy of AlterNet:

BP said Tuesday it will shut down 100,000 barrels, or one quarter, of its Alaskan oil production for a "few days" after discovering a water pipeline leak.

Analysts said the temporary loss of output at Prudhoe Bay should not have a dramatic impact on world oil markets, but with supplies already tight and crude futures trading near $66 a barrel, any snag in the industry tends to make energy traders jittery.


BP's Prudhoe Bay shutdown was disclosed late Monday by Rep. Bart Stupak, D-Mich., who has been critical of the company's maintenance practices in Alaska, where two separate leaks occurred last year. BP confirmed the shutdown Tuesday morning.

Internal company documents released at a hearing chaired by Stupak last week suggested that budget cuts by BP had put pressure on managers to ignore corrosion prevention at the oil company's North Slope pipelines.

More here.

Hmmm. So the latest spike in gas prices has to do with what the industry calls "refinery problems." Now this. Like I said a couple of weeks ago, this is really reminding me of how the energy industry manipulated generator maintenance in order to cause the California electricity crisis six or seven years ago. Are these BP "budget cuts" for real, or simply a pretense?