Oil pipeline shutdown costs Alaska $18.1 million daily

The Anchorage Daily NewsJanuary 11, 2011 

The shutdown of the trans-Alaska pipeline is likely to extend into a fourth day, making it the third longest closure in the line's 33-year-history. Officials haven't yet announced how or when they intend to restart it, which is challenging in the dead of winter.

About 600,000 barrels of crude oil -- some $50 million worth -- that normally would pulse into the pipeline remain in the ground every day it is shut down. North Slope oil field operators are producing only about 5 percent of their usual amount, or about 30,000 barrels a day.

Every day of the shutdown costs the state of Alaska $18.1 million in oil royalties and taxes at current oil prices, according to the state Department of Revenue. That's money it won't be able to collect this budget year, although eventually, when all the oil is pumped from the ground, the state presumably will get its share. Oil proceeds are the main source of state revenue.

Alyeska Pipeline Service Co., which operates the 800-mile-long pipeline on behalf of oil producers, cut off the flow of oil just before 9 a.m. Saturday after workers discovered crude leaking from a secondary line into the basement of a building at Pump Station 1 on the North Slope. The underground piping system is mainly encased in concrete, but oil flowed into the basement at the point the pipe passes through a wall.

As of 10 a.m. Monday, 18 barrels of oil -- or 750 gallons -- had been recovered from the pump house basement, about double the total as of the day before. Residual oil in the piping or spill path is continuing to seep into the building, the state Department of Environmental Conservation said in a situation report released Monday evening.

To read the complete article, visit www.adn.com.

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