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BP Prudhoe Has Daily Problems - Witholding Producting for more money

 
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BP Prudhoe Has Daily Problems - Witholding Producting for more money Can't Post
What's with BP and the Prudhoe operations. Ever since the massive shut down last year things have been shaky. There's always some reason to shut down 1/4, 1/2, etc., of the pipeline for some odd reason BP calls it 'isolated' incidents, I call it an attempt to keep oil prices sky high by restricting supply. Senators in the States are noting this trend too.

For example, the latest problem? A leaky pipe. Corrosion yet again caused the shut down of 1/4 of the pipeline because some water started leaking. Every month there's something new, every month BP reaps billions from higher oil prices, and every month we pay more for energy. Furthermore, one of the biggest problems with gas prices is the fact refineries are in short supply. But then why are BP refineries operating at half capacity? HALF! Apparently we're at 98% capacity but BP is at 50%.

The government needs to step in fast and slap the Brits around for extreme gouging, or in the very least, for not maintaining their facilities. What idiotic business venture can't plan far ahead enough to keep their crucial service online? Or is it just collusion?

dellite
Teller

May 25, 2007, 1:07 PM

Post #1 of 5 (535 views)

Re: [dellite] BP Prudhoe Has Daily Problems - Witholding Producting for more money [In reply to] Can't Post
So you're saying that BP is deliberately curtailing production at Prudhoe Bay so that other oil companies can profit from the high oil prices? Or that they're deliberately skimping on maintenance so the oil prices go up and they can't benefit by those higher prices? That's very curious behavior for a corporation that's only mission is to maximize profits every single quarter for the benefit of its shareholders, isn't it?

Or could a more likely explanation be that since Prudhoe Bay production peaked in March of 1988 at 2,086,000 barrels a day and is last February was at 753,000 barrels a day, BP sees the coming end of economic oil production in Alaska and isn't bothering to put a lot of money into maintenance and only patching as problems arise?
Alaska Crude Oil Production history:
http://tonto.eia.doe.gov/dnav/pet/hist/mcrfpak2m.htm

Also, as fields deplete, the good light sweet crude becomes a smaller part of production and heavier, dirtier crude starts to dominate the oil flow. This stuff generally is more corrosive to the infrastructure and causes things like leaky pipes.

Apparently this situation is becoming more common all over the world, since oil production since May, 2005 is down slightly. We could be past peak oil, and here we are with no hydrogen filling stations in my town! Wink

joewp
Teller

May 27, 2007, 10:41 PM

Post #2 of 5 (525 views)

Re: [joewp] BP Prudhoe Has Daily Problems - Witholding Producting for more money [In reply to] Can't Post
Although I doubt BP has done things intentionally, it has NOT upgraded and ensured their pipelines are safe and have done dismally environmentally (with the breaks etc.) Furthermore they don't care what OTHER companies profit, only if they profit from the loss of production. The pipelines are still being used at capacity as far as I know, that means you need to maintain them so they continue to function. Right now we're getting hit hard in the pocket books because they couldn't maintain a pipes and facilities (see explosions in Texas) despite maintaining billion dollar profits.

econmod
Broker / Moderator

May 29, 2007, 4:31 PM

Post #3 of 5 (503 views)

Re: [econmod] BP Prudhoe Has Daily Problems - Witholding Producting for more money [In reply to] Can't Post
My point is they haven't upgraded the pipeline simply because it's not being used at full capacity since Prudhoe Bay is in severe depletion, pumping only a third of what it was pumping at its peak. I documented that fact with my link. All the refinery issues are related to the fact that light sweet crude oil has peaked as of 2004/2005 and running heavier, more sour crude through refineries designed for light sweet will damage and corrode the equipment faster than normal maintenance can account for.

If you think our pocketbooks are being hit hard now, just wait. World oil production (all liquids) has had a slight decline since May 2005 and this is what has happened. Soon, oil production will start to decline faster, and you'll have bruises where your pocketbook used to be. Pirate

World oil production data available here: http://www.eia.doe.gov/emeu/international/oilproduction.html

joewp
Teller

May 29, 2007, 7:05 PM

Post #4 of 5 (502 views)

Re: [joewp] BP Prudhoe Has Daily Problems - Witholding Producting for more money [In reply to] Can't Post
Why is supply curtailed 75% when one section of the pipeline goes off line? If they only operate at 25% capacity then they could reroute supply to the other pipes thereby not affecting supply.

Furthermore, supply doesn't mean you stop maintaining your pipelines so they break and explode and stop working.

dellite
Teller

May 30, 2007, 12:30 PM

Post #5 of 5 (496 views)

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