Senate passes SB 21

BP production down 9.1 percent

Northstar and Endicott produced 11,000 bpd in 2012, down 35 percent from 2011

According to Petroleum News Alaska, BP produced some 139,000 barrels of oil per day (bpd) in Alaska in 2012, down 9.1 percent from some 153,000 bpd in 2011 after dropping 7.8 percent between 2010 and 2011.

The declines came largely from smaller properties. The Prudhoe Bay field produced 77,000 bpd in 2012, down 1.3 percent from 2011, while Milne Point produced 15,000 bpd in 2012, down more than 21 percent from 2011, and “other fields” including Northstar and Endicott produced 11,000 bpd, down 35 percent from 2011.

Alyeska using pump stations to heat oil

Steep declines in production have resulted in crude traveling slower through the pipeline, allowing it to chill, which creates serious problems. Alyeska is using idle pump stations to keep oil heated during cold winter months

A trans-Alaska oil pipeline pump station, mothballed because of plummeting throughput, has been converted into an oil heater to help keep the line operational during the winter.

“The fact is, we know about operating a pipeline in a cold, challenging arctic climate. We’ve done this successfully for the past 35 years. But it has never been harder than it is today,” wrote Tom Barrett, president of Alyeska Pipeline Service Co., in Alyeska’s January newsletter.

“With technical challenges from declining throughput, we are operating in new territory every day. Issues caused by declining flow – slower moving oil, more wax and water dropout, tank roofs to shovel – are becoming harder to manage in the cold winter months. We’re taking steps to address these issues and we will have to increase these efforts if flow continues to decline.”

Enter Pump Station 7, located approximately 50 miles north of Fairbanks. Alyeska has reconfigured it to add heat to the pipeline’s crude oil stream by using an existing “legacy” pump. The mechanical energy provided by the pump converts to heat energy through pressure reducing valves.

During recirculation, a portion of the crude stream passes through drag valves that produce a pressure drop to develop heat. That same crude oil then flows through a full head pump that adds more heat with friction and increases the pressure. The crude oil goes through yet another drag valve, dropping the pressure again and producing additional heat before the oil re-enters the pipeline.

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MACC can dispatch speakers to all parts of Alaska to talk to groups and employees about the need to meaningfully reform Alaska’s oil taxes. To schedule a presentation, contact Julianne at MSI Communications.

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