The nation's largest oil field and the trans-Alaska oil pipeline were shut down Tuesday after poor weather at both ends of the 800-mile pipeline caused havoc.
ANCHORAGE, Alaska -- The nation's largest oil field and the trans-Alaska oil pipeline were shut down Tuesday after poor weather at both ends of the 800-mile pipeline caused havoc.
Analysts said any impact on oil prices would depend on how long it takes to restore production and distribution of the region's oil.
BP PLC said high winds were to blame for a power outage that shut down Prudhoe Bay in northern Alaska. Production fell to about 20,000 barrels Tuesday; about 350,000 barrels were produced Monday.
Separately, Alyeska Pipeline Service Co. shut down the trans-Alaska pipeline as a safety precaution after fiber-optic communication lines that allow operators to remotely control valves were knocked out of service, presumably by flooding.
Alyeska spokesman Mike Heatwole said company protocol calls for the pipeline to be shut when valves cannot be closed _ to limit the size of any spills _ remotely. The valves must be then staffed by crews that can manually operate the valves, he said.
Fimat USA oil broker Mike Fitzpatrick said the market does not appear concerned, for now, at what appears to be a temporary supply disruption. "I don't think it's a very big deal," Fitzpatrick said.
Oil prices fell to their lowest level in eight months Tuesday, settling at $58.52 a barrel, as doubts mounted that OPEC is on the verge of slashing its output by almost 4 percent.
At Prudhoe Bay, layers of dust and dirt blown by high winds built up on high voltage insulators on power lines, causing a short just before 3 a.m., BP spokesman Daren Beaudo said.
"The whole field came down," Beaudo said.
Winds were blowing about 12 mph at Deadhorse near the time of the outage, said Tom Dang of the National Weather Service. However, they were blowing significantly most of Monday, with peak gusts of about 66 mph midday Monday.
Beaudo said crews would work Tuesday to wash insulators, restore power and ramp up production. He could not predict whether the work would take more than one day.
Communications are a critical component for operations of the trans-Alaska pipeline, which carries nearly 17 percent of the nation's domestic oil supply daily.
"We lost communication with five of our remote gate valves just north of Valdez at about 4 a.m. Alaska time," Heatwole said.
Flooding and mudslides along the Richardson Highway, which parallels the pipeline and is the only roadway out of Valdez, disrupted vehicle traffic. The Alaska Department of Transportation closed a 65-mile stretch of the highway, starting near Valdez.
The Weather Service said 6.5 inches of rain fell Sunday and Monday at Valdez. Flooding in Keystone Canyon near Valdez hit three bridges hard and moved one 5 feet, said DOT spokeswoman Shannon McCarthy.
Instead of driving, Heatwole said, crews would be sent by helicopter to the remote valve sites. By midday Tuesday, crews had reached at least two valves and were in transit to others, he said.
Separate crews will seek the cause of the break in the fiber-optic line, Heatwole said.
He could not predict when the oil would again flow through the pipeline.
"We hope to know in the next couple of hours what the projected timeframe is," he said Tuesday morning.
High water along other roads in Valdez was hampering Alyeska's ability to staff the Valdez Marine Terminal, where oil is loaded onto tankers. The terminal is across Port Valdez from the city and a road leading to it was affected by flooding.
Essential employees reported to work at the Valdez harbor and were transported across Port Valdez by boat. Nearly 500 Alyeska employees travel the road to work each day.
The entire Prudhoe Bay oil field had produced more than 400,000 barrels a day _ or 8 percent of total U.S. output _ until leaks and the discovery of pipe corrosion led the company to begin shutting down the eastern half of the field Aug. 6.
The eastern side of the field was restarted late last month as the company began to clean out the eastern transit pipeline.
BP workers this week are continuing to scrape and clean Prudhoe's east side transit line with devices called maintenance pigs. The work follows intensive ultrasonic inspections and other sound wave tests.
Next, workers will put a smart pig that uses ultrasound through the line to check for thin spots. BP officials declined to say exactly when that would occur, only that they were working on a two-week maintenance effort that began Sept. 30.
BP has said it ultimately will replace 16 of 22 miles of transit lines. It expects to get replacement pipe by the end of the year, with construction beginning early next year.
Source: Associated Press