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In other oily news......
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| MisterOpus1 |
For the tin foil hatters like myself, the timing of this sucker seems to be a wee bit suspicious:
| quote: | BP Shutdown to Remove 8 Pct. of US Crude
Monday August 7, 11:11 am ET
By Mary Pemberton, Associated Press Writer
BP Can't Say How Long Largest U.S. Oil Field Will Stay Down Due to Pipeline Problems
ANCHORAGE, Alaska (AP) -- Oil company BP scrambled Monday to assess the pipeline corrosion that will shut shipments from the nation's biggest oil field, removing about 8 percent of daily U.S. crude production and driving oil and gasoline prices sharply higher.
BP, which is already facing a criminal investigation over a large spill in March at the same Prudhoe Bay oil field, said it did not know how long the field would be offline. "I don't even know how long it's going to take to shut it down," said Tom Williams, BP's senior tax and royalty counsel.
The news sent the price of light, sweet crude oil up $1.59 to $76.35 a barrel in electronic trading Monday on the New York Mercantile Exchange. Gasoline prices rose more than 4 cents to $2.2725 on the Nymex.
Because of the disruption of supplies, the Energy Department is prepared to provide oil from the government's emergency supplies if a refinery requests it. Spokesman Craig Stevens said the department will be in contact with BP and West Coast refiners later Monday to assess the situation.
"If there is a request for oil we'll certainly take a serious look at that," he said..........
http://biz.yahoo.com/ap/060807/oil_...down.html?.v=24 |
Then again, if BP's gonna be losing profits on the matter then that tin foil hat's gotta hole in it as well. Time will tell how this will develop. Nevertheless, 8% of our oil ing sucks a duck bad.
Now we're hangin' on the $76/barrel mark, which is nothing shy of ing astounding.
And does anyone recall Bush and the GOP's Energy Policy Act?:
http://www.whitehouse.gov/news/rele...20050808-6.html
You know, the one that handed out billions of tax breaks to our lovely oil buddies, all because:
| quote: | | "it will take pressure off the global supply and it will help take pressure off price for American consumers." |
I mean, who woulda thunk that one was a wee bit shy of reality? Not that too many folks believed Bush's bull in the first place, but the rhetoric never ceases to amaze me. The Doublethink really never stops.
Hmmm, this is interesting:
| quote: | "The U.S. market is actually well-supplied; crude inventories are very high," he said. "So while this won't have any immediate impact on U.S. supplies, the market is in very high anxiety."
http://www.nytimes.com/2006/08/07/us/07oil.html?ex=1312603200&en=77feac91523a2f69&ei=5090&partner=rssuserland&emc=rss |
As one radical, America-hating, unpatriotic, Lefty-winging freaknut blogger Kos astutely points out:
| quote: | Oil giant Exxon Mobil has posted the second-largest quarterly profit ever recorded by a publicly-traded US firm.
Helped by high oil prices, the company earned $10.4bn (£5.6bn) in the second quarter of 2006 - a 36% increase on the same period of 2005.
Exxon, which is the world's biggest oil company, said its quarterly revenues rose by 12% to $99bn.
http://news.bbc.co.uk/1/hi/business/5220954.stm |
So how are those alternative fuels going lately? |
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| Shakka |
So now Dubya is to blame for a leaky pipeline in Alaska that had to be shut down? You never cease to amaze me.
Of course from my perspective this is just another piece of anecdotal evidence that supports my view of a serious pending economic slowdown (though I am more dour in my prediction for a recession). Even without this wonderful event, I don't see how or why energy prices would come down in earnest anytime soon, even with the economic slowdown I expect at home. Given a lack of refining capacity and ever increasing demand from emerging markets, let alone that much of the oil in the world comes from more openly hostile, politically unsavory locales.
In any event, this is certainly a bad event (certainly given the timing), especially if you're a tree-hugging hippie living in California. Hell, I bet Bush did it just to get even with Cindy Sheehan, even though she prefers Texas these days. Nevertheless, I chose to fill up my gas tank at lunch today (somewhat a panic reaction and somewhat because I was totally out of gas).
I was thinking about just not talking to you anymore, but given your endearing comments about Kos (sarcastic as they may have been), I figured why the hell not. |
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| MisterOpus1 |
| quote: | Originally posted by Shakka
So now Dubya is to blame for a leaky pipeline in Alaska that had to be shut down? You never cease to amaze me. |
Nor does your leap of logic. Exactly how did you come to the conclusion that I somehow indicted Bush to a rusty pipeline? Jesus, Shakka, get a grip.
| quote: | | Of course from my perspective this is just another piece of anecdotal evidence that supports my view of a serious pending economic slowdown (though I am more dour in my prediction for a recession). Even without this wonderful event, I don't see how or why energy prices would come down in earnest anytime soon, even with the economic slowdown I expect at home. Given a lack of refining capacity and ever increasing demand from emerging markets, let alone that much of the oil in the world comes from more openly hostile, politically unsavory locales. |
To which I cannot disagree.
| quote: | In any event, this is certainly a bad event (certainly given the timing), especially if you're a tree-hugging hippie living in California. Hell, I bet Bush did it just to get even with Cindy Sheehan, even though she prefers Texas these days. Nevertheless, I chose to fill up my gas tank at lunch today (somewhat a panic reaction and somewhat because I was totally out of gas).
I was thinking about just not talking to you anymore, but given your endearing comments about Kos (sarcastic as they may have been), I figured why the hell not. |
Touching. My point was NOT to demonstrate some strange connection between a rusty pipeline and Bush's oil policies. Jesus I couldn't even begin to muster that one together (though give me a nice bottle or Red Cab. and I'll come up with anything ;) ). However, the point I was trying to bring forth is the fact that the last thing our ing country needs by any stretch of the imagination is to keep giving out corporate welfare to these oil companies. It absolutely boggles my mind how some Bush supporters can scream at the top of their lungs about no welfare to those who need it the most, yet we see corporate welfare like this to those who absolutely need it the least and are doing nothing but raking in profits.
And please don't consider this as an anti-capitalist argument. I'll be the first one to jump on the capitalist bandwagon as I understand and even agree to the concept (which took some years of doing but I'm there). But when we see rhetoric coming from this Administration saying that giving billions of $ of handouts to the oil industries will somehow and some way cut down the price of gas, and the reality of course smacks us all in the face otherwise, I think it demands pointing out the obvious. Those companies are, of course, entitled to their profits. They are NOT, however, entitled to my own $ if the philosophy from Bush is to bring down the price of gas and what we clearly see is otherwise.
And if memory serves, I believe our dear libertarian economist Occ made similar arguments some time ago. |
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| Shakka |
| quote: | Originally posted by MisterOpus1
Nor does your leap of logic. Exactly how did you come to the conclusion that I somehow indicted Bush to a rusty pipeline? Jesus, Shakka, get a grip. |
I think I must've read "Tin foil hat" and saying it made you suspicous and concluded that you were suspcious of a conspiracy to keep oil prices high, which would somehow have to get back to the current administration. Honest mistake and an erroneous conclusionary jump on my part I guess. I just spent $46 filling up the tank. |
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| MisterOpus1 |
| quote: | Originally posted by Shakka
I think I must've read "Tin foil hat" and saying it made you suspicous and concluded that you were suspcious of a conspiracy to keep oil prices high, which would somehow have to get back to the current administration. Honest mistake and an erroneous conclusionary jump on my part I guess. I just spent $46 filling up the tank. |
Yeah, my little Accord filled up at $41. This bites, and I'm still commuting my ass to school in Kansas City!
Time for carpool (even though the kids I'd have to carpool with drive me up the ing wall......). |
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| MisterOpus1 |
The news has gone from bad to worse:
| quote: | BP: Pipeline closing may last for months
ANCHORAGE, Alaska - BP said Monday it will replace 16 miles of pipeline from its huge Prudhoe Bay oil field and production could be closed for weeks or months, crimping the nation's oil supplies.
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The news drove oil prices up by more than $2 a barrel and boosted gasoline prices. The West Coast was expected to be squeezed particularly hard and the government was considering releasing oil from emergency stockpiles to ease an expected crunch.
BP PLC, the world's second-largest oil company, began shutting down pipelines Sunday after a leak was discovered. The company said Monday it would replace about 73 percent of the 22 miles of transit pipeline it operates in the Prudhoe Bay field 650 miles north of Anchorage..........
http://news.yahoo.com/s/ap/20060807...mhuBHNlYwNtdHM- |
Read the rest. Pretty much ensures relatively higher oil prices well into the fall elections. That can't be good news for Bush, but moreover, that really sucks for us all.
And it does make one wonder - with all those ing profits BP was receiving, would it not have been a bit more prudent to check your ing product or transportation security of your product with that money earned rather than go into the ing executives' collective pockets? Just a random thought on the matter........ |
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| Groundhog Boy |
| quote: | Originally posted by MisterOpus1
And it does make one wonder - with all those ing profits BP was receiving, would it not have been a bit more prudent to check your ing product or transportation security of your product with that money earned rather than go into the ing executives' collective pockets? Just a random thought on the matter........ |
This parallels my thoughts on the topic when I first heard this on CNN this morning. When the Senate hearings were going on regarding the oil companies' record profits, all that we heard was how much money they've been sinking into research & development, equipment, etc. So how the hell do they suddenly have such major equipment problems that necessitate cutting off 8% of the US crude production?
Their failure to maintain their facilities and machinery is going to cost us tons of money, and in the long run, will make them more, as the price of oil will skyrocket now, never fall back down to current levels (or even levels equal to now when adjusted for other factors like inflation, etc.), and they'll make a killing when they get supplies back up again. |
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| Shakka |
| quote: | Originally posted by MisterOpus1
The news has gone from bad to worse:
Read the rest. Pretty much ensures relatively higher oil prices well into the fall elections. That can't be good news for Bush, but moreover, that really sucks for us all.
And it does make one wonder - with all those ing profits BP was receiving, would it not have been a bit more prudent to check your ing product or transportation security of your product with that money earned rather than go into the ing executives' collective pockets? Just a random thought on the matter........ |
Wow. That got ugly in a hurry! The last I read at the end of the day today, BP said the pipeline would be down for 3-5 days but they weren't certain when it would be able to be reopened. This certainly sounds bad. I also read a headline on the news ticker that said the pipeline had some unexcpected (which reminds me--do you know how ing sweet it is that I have access to Bloomberg from my home PC?! Office perks rule) kind of corrosion on them.
Yup, this story sounds a little more negative (though almost the same exact story. In other news, it sounds like you can thank the government for preventing a possible environmental disaster as well. ;)
| quote: |
ANCHORAGE, Alaska (AP)--BP PLC (BP) said Monday it discovered corrosion so severe that it will have to replace 16 miles, or 73%, of the pipeline at the huge Prudhoe Bay oil field - work that could shut down the nation's single biggest source of domestic crude for months and drive gasoline prices even higher.
Bob Malone, chairman of BP America, said that in a worst-case scenario, it could take weeks or months to replace the pipelines. But the company said it will try to put portions of the network back into operation as they are repaired.
"BP deeply regrets it has been necessary for us to take this drastic action," Malone said.
Oil prices climbed more than $2 a barrel on the news, and gasoline futures rose, too. The West Coast is expected to be squeezed particularly hard, and the government is considering releasing oil from its emergency stockpile to ease the crunch.
BP PLC said it will have to replace most of the 22 miles of so-called transit pipeline at Prudhoe Bay, which produces about 2.6% of the nation's daily supply, or about 400,000 barrels a day.
BP, the world's second-largest oil company, discovered the extent of the corrosion with tests that were ordered by the federal government after a big oil spill last March at Prudhoe Bay, situated above the Arctic Circle, 650 miles north of Anchorage.
The oil company said it was surprised to find such severe corrosion, and had gone 14 years without using a device called a "pig" to clean out its lines because it did not believe it was necessary.
BP operates the Prudhoe Bay oil field for itself and for other oil companies, namely ConocoPhillips (COP) and ExxonMobil (XOM). Prudhoe Bay and other oilfields on Alaska's North Slope feed oil into the 800-mile trans-Alaska pipeline. The North Slope produces approximately 800,000 barrels a day; Prudhoe Bay accounts for half of that.
BP officials said they did not immediately know how much it would cost to replace the lines. The company made $7.3 billion in profit during the most recent quarter.
"We estimate it could take between 2-3 months to get it back on line," Bruce Lanni, an industry analyst with A.G. Edwards, wrote in a research note. "However, there are no assurances that it will return to current capacity, given the complexities and age of the reservoirs. Thus, we would not be surprised to see volume losses in the area of 5% to 10%."
Steve Marshall, president of BP Alaska Exploration Inc., said tests Friday indicated that there were 16 anomalies in 12 areas in a transit line on the eastern side of Prudhoe Bay. Tests found losses in wall thickness of between 70% and 81%. Repair or replacement is required if there is more than an 80% loss.
BP also said Sunday that workers found a small spill of about four to five barrels. The aging pipeline system on the North Slope has been fraught with problems lately.
BP discovered corrosion in the transit lines only after the U.S.
Transportation Department ordered their inspection following a spill of up to 270,000 gallons in March. It was the biggest spill in North Slope history, and has become part of a criminal investigation into the company's Alaskan operations.
Company officials said they did not believe a routine maintenance "pigging" of those lines was necessary because they carry clean crude from which water has been removed.
Marshall said the company believed ultrasonic testing of pipeline wall thickness was sufficient. But he said the company has since learned otherwise. "Clearly, we are already in the process of adjusting considerably our corrosion program," Marshall said.
The news sent the price of light, sweet crude oil up $2.22 to settle at $76.98 a barrel Monday on the New York Mercantile Exchange, after peaking at $77.30 earlier in the day. The average U.S. retail price of a gallon of unleaded, regular gasoline was $3.036 on Monday - near its all-time high of $3.057, reached Sept. 5 after Hurricane Katrina hit the Gulf Coast.
Gasoline futures also rose, indicating that the market expects prices at the pump to increase further. Because of the disruption of supplies, the Energy Department said it is prepared to provide oil from the government's emergency supplies if a refinery requests it.
"If there is a request for oil we'll certainly take a serious look at that," spokesman Craig Stevens said. California gets about 20% of its oil from Alaska, with the remainder coming from in state and foreign sources.
The reserve has about 700 million barrels in storage on the Gulf Coast to be used in case of a serious supply disruption. The Energy Department in the past has lent some of the oil to refineries when there were disruptions because of pipeline problems or other troubles.
Bill Hedges, BP's technical expert on corrosion, said the Prudhoe Bay
pipelines were initially designed to last 25 years, but have now lasted 29 years, with many of the lines in "excellent condition."
The company said it is spending $72 million this year to fight corrosion, up from $60 million last year. BP puts millions of gallons of corrosion inhibitor into the pipelines each year. It also examines pipes via X-rays and ultrasound images.
BP has a 26% stake in the Prudhoe Bay field, meaning its own production would be cut by 100,000 barrels a day, or around 2.5% of the company's worldwide production, said spokesman David Nicholas. He declined to say what the effect might be on earnings.
U.S. shares of BP PLC fell $1.19, or 1.6%, to $71.35 in morning trading on the New York Stock Exchange. Shares of BP Prudhoe Bay Royalty Trust, which derives revenue from royalties of BP's Prudhoe Bay oil, fell $9.12, or 10.4%, to $78.77 on the NYSE.
(END) Dow Jones Newswires
08-07-06 1903ET
Copyright (c) 2006 Dow Jones & Company, Inc.- - 07 03 PM EDT 08-07-06 |
Just like the 70's man! Energy crisis 21st Century style.
And for the record, I too think that Corporate salaries are off the charts and are outrageous. I just don't think it should be the government's mandate to force change. I'd much prefer the shareholders to wake up and make some noise. When the government gets involved with this it invariably ends up in a cluster. With all of the good intentions we got out of Reg FD and Sarbox, it has cost companies billions in aggregate and driven many public companies private in the process, ultimately making them even less transparent. In the end of the day I guess it's a matter of whose hands you want all that money in while you're waiting for a real, final solution. I'll almost always side with a private individual over the government (even if he is a filthy rich sonnofabitch). |
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| LiquidX |
| This is hell of a news to me. My job required me to drive around 140 miles per day.. mmm yeah.. Im screwed. |
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| LazFX |
| quote: | Originally posted by LiquidX
This is hell of a news to me. My job required me to drive around 140 miles per day.. mmm yeah.. Im screwed. |
Damn!!! 140 a day?!?!? I feel for you, I moved just 2 blocks from work, its a ty neighbor hood, but I save on gas by walking. Every little bit helps, |
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| occrider |
Federal government aside, it strikes me odd that while oil companies are making record profits, their maintenance records are so wholly inadequate that repair work requires a complete shutdown of a pipeline resulting in the shutdown of the flow of an inelastic product that will drive profits up further.
Pardon me if I'm incorrect, however, corrosion doesn't just happen one day, such that it's an unexpected surprise. A flow glitch because of bad control equipment is a surprise.
Corrosion, cavitation, and plaque are all modeled, known factors. A pipeline which must endure a sudden, massive shutdown due to a completely progressive problem is not the fault of lady luck, but a fundamental lack of proper engineering and monitoring upkeep expenditure. It's the same with sewers, water systems, and every other type of product delivery pipeline.
This is by no means a 9/11 conspiracy theory. This is more so in line with examples set forth by Enron, Tyco, Worldcom, etc., in other words it's a plausible theory of corporate malfeanse. |
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| Q5echo |
| quote: | Originally posted by occrider
This is by no means a 9/11 conspiracy theory. This is more so in line with examples set forth by Enron, Tyco, Worldcom, etc., in other words it's a plausible theory of corporate malfeanse. |
the thing with water and sewage is thay can be easily diverted re-routed through other ancillary pipes. the oil industry will always have their hands tied when engineering pipelines for one reason or another.
of course corrosion, and any symptom that relies on preventative maintenance to keep up with is progressive however the nature of this industry is determined by demand. demand is high. demand has only been getting higher dramatically, safe to say, since this problem started probably years ago if you believe corrosion is progressive. BP saw a problem with the corrosion a few months back when prices were at around $60/bbl and they lost a quarter million barrels pumping close to half a million a day through the pipeline.
BP is probably not ignorant to the fact that oil prices are only going to go in up these months it takes to repair anyway, despite their decision to take 8% offline to prevent what could be a major natural disaster at their hands. BP certainly shouldn't ignorant to the fact that that 8% can and will be easily taken up somewhere else once the initial $2.50 "shock" to the market subsides while repairs are being made. i know i'm not.
...but anything is "plausible" i guess. |
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