Alaska pipeline restarted, oil flowing

by Mary Pemberton / The Associated Press Fairbanks Daily News Miner

ANCHORAGE, Alaska - Oil began flowing again Monday through the trans-Alaska pipeline after workers installed a pipe to bypass a leak at a pump house station on the North Slope.

Alyeska Service Pipeline Co. said it hoped to increase the amount of oil in the 800-mile pipeline to 500,000 barrels during the next 24 hours.

The pipeline was carrying about 630,000 barrels a day before the leak was discovered on Jan. 8 in an underground pipe encased in concrete.

"We are really monitoring the pipeline and the equipment very carefully as we bring it up," said Michelle Egan, a spokeswoman for Alyeska, which operates the pipeline.

The pipeline delivers about 13 percent of the nation's daily domestic oil production to tankers for West Coast delivery.

The oil began flowing again after crews completed a 157-foot bypass.

"It is a complicated process," said Rachel Baker-Sears, a spokeswoman for the Joint Information Center set up in Fairbanks to handle the crisis.

She said the restart went smoothly, but it could take a few days for the pipeline to return to previous pumping levels.

During the initial shutdown, the flow was scaled back to 5 percent of previous levels and oil was collected in two large storage tanks at Prudhoe Bay.

The pipeline was temporarily restarted after four days but was shut down again on Saturday so the bypass pipe could be installed.

During the shutdown, a containment vault was used to collect the estimated 13,326 gallons of oil that leaked from the pump station pipe.

Egan said there had been no known harm to wildlife or the environment.



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TAPS Shut Down Because of Leak

TAPS shut down at midnight Friday for replacement pipe installation
Anchorage (Platts)--
Alyeska Pipeline Service Company began a planned 36-hour shutdown of the Trans Alaska Pipeline System as expected overnight to install new piping at Pump Station 1, bypassing a section of damaged pipe that caused TAPS to shut down last Saturday. The shutdown began at 12:07 a.m. Alaska Standard Time (0907 GMT) Saturday. The company is installing 157 feet of 24-inch pipe that had been fabricated in Fairbanks and moved to the North Slope earlier in the week. Federal and state regulators had allowed TAPS to do a temporary restart Tuesday night so that warm crude oil moving in the line would keep critical systems functioning and prevent a freezeup in winter conditions. TAPS was carrying about 630,000 b/d of crude when it was shut Saturday.

Pump station leak shuts down TAPS

Pump station leak shuts down Trans Alaska Pipeline System

By CASEY GROVE

Published: January 8th, 2011 07:23 PM

The 800-mile trans-Alaska oil pipeline is shut down due to a leak at Pump Station 1 on the North Slope.

tool nameclose tool goes here North Slope oil producers have been asked to cut their production to 5 percent of normal.

An oil line encased in concrete leaked an unknown quantity of crude oil just outside a booster pump building, according to Alyeska Pipeline Service Co. spokeswoman Michelle Egan. Alyeska operates the line and its pump stations.

A crew doing a routine inspection noticed the leak this morning and Alyeska shut down the pipeline at about 9 a.m., Egan said.

"There's no visible oil on the tundra," Egan said. "We believe it's all inside that casing."

While Alyeska staff believe the leak is contained, Egan said, they wouldn't know for sure if it had escaped that concrete structure until crews had a chance to excavate around the pipe. Crews are working to determine how to fix the line and get the pipeline running, Egan said.

Alyeska is unsure when oil might start flowing, she said.

"We want to make sure that we aren't going to make the situation worse by restarting, so we're being very careful and methodical about that," Egan said.

BP is in the process of cutting off production at the fields it operates, said Steve Rinehart, Alaska spokesman for the oil company. It will take time for wells to be shut in and pipelines and other facilities to be freeze protected.

Normal production from the North Slope fields averages around 630,000 barrels a day of oil. A 5 percent production level would be about 31,500 barrels a day. The oil fields have limited storage capacity, and the production that occurs will go into storage while the trans-Alaska pipeline is shut off.

BP runs most of the oil fields on behalf of itself and the other leaseholders. Conoco Phillips and Pioneer Natural Resources also run fields. BP, Conoco and Exxon Mobil are the major producers on the North Slope.

Rinehart said it was unclear how long the pipeline shutdown would last.

The pipeline runs from the North Slope to a tanker port in Valdez. Pump Station 1 is at the beginning of the pipeline. Alyeska runs the pipeline for the five oil companies that own it: BP, Conoco, Exxon, Koch Industries and Chevron.

Deep-water drilling in the Gulf of Mexico could resume within weeks

Path Clears for Deep-Water Drilling

By BEN CASSELMAN And DANIEL GILBERT
Deep-water drilling in the Gulf of Mexico could resume within weeks under a policy announced Monday by the Obama administration, which has come under increasing criticism from the oil industry and politicians in the region over the impact of the drilling halt.

Oil and gas exploration in the Gulf's deep waters has been stopped since May, when President Barack Obama announced a six-month drilling moratorium in the wake of the April explosion of the Deepwater Horizon drilling rig, which killed 11 workers and set off the worst offshore oil spill in U.S. history.

The administration lifted the ban in October—a month ahead of schedule—but hasn't issued any permits for new deep water oil wells.

On Monday, The Wall Street Journal reported that the delay has hurt both the oil industry, which has seen billions of dollars in projects put on hold, and the Gulf Coast's economy, which has been hit hard by the slowdown.

The administration said Monday that it would clear the path for 13 companies, including Chevron Corp. and Royal Dutch Shell PLC, to resume work on a handful of wells that were already approved and under way when the moratorium took effect. The 16 projects must still comply with strict new safety rules announced after the Deepwater Horizon disaster, but in most cases won't be subjected to new environmental reviews.

The announcement means that some drilling could resume in a matter of weeks, although the exact timing remains unclear. But the policy doesn't affect the more than a dozen permit requests that were pending when the moratorium took effect or have been filed since. Those must still undergo enhanced environmental reviews.

GE Bets on Deep Water Oil With $1.3 Billion Wellstream Bid Access thousands of business sources not available on the free web. Learn More Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, the newly formed federal agency in charge of offshore drilling, said projects that were interrupted by the moratorium deserved special consideration.

"For those companies that were in the midst of operations at the time of the deep-water suspensions, today's notification is a significant step toward resuming their permitted activity," Mr. Bromwich said in a statement.

Oil companies in recent weeks had become increasingly pessimistic about a quick resumption of drilling in 2011, with some predicting that the wait would last into the second half of the year. On Monday, the industry praised the decision but said more details were needed.

"It appears to be a step in the right direction," Randall Luthi, president of the National Ocean Industries Association, a trade group, said in an interview. However, he said, "there are still major questions and some confusion among the companies about what is being required."

Elgie Holstein, a staff expert for the Environmental Defense Fund, an environmental group, said he didn't see any reason for projects halted by the moratorium to be treated as special cases. But he said the new policy was reasonable as long as regulators enforced the new safety and environmental rules. "I actually thought it was a balanced response," Mr. Holstein said. "It does relieve some of the pressure that the Gulf Coast has been feeling from an economic standpoint."

The administration has come under increasing pressure from Republicans and some Gulf Coast Democrats to allow drilling to resume. On Monday, lawmakers reacted cautiously to the announcement. Sen. Mary Landrieu, a Louisiana Democrat who has been a vocal critic of the administration's drilling policy, said some projects could still be thwarted.

"We need to know more about the conditions under which drilling will be allowed to resume and make sure those conditions don't actually undermine the intent," Ms. Landrieu said in a statement.

Doc Hastings, the Washington Republican who is incoming chairman of the House Natural Resources Committee, was also skeptical.

"Today's announcement by BOEMRE only ensures the possibility that previous drilling activity can resume at some point in the future if certain requirements are met," Rep. Hastings said in a statement. "The Obama administration can prove it's serious about resuming drilling in the Gulf by actually issuing permits and allowing people to return to work."

—Siobhan Hughes and Tennille Tracy contributed to this article.