As of Thursday, August 10, 10:00 am
Background on Alaska Crude Production and Transport
Alaska ranks second, after Texas, among the States in crude
oil reserves. On December 31, 2004, Alaska's proved reserves
totaled 4,327 million barrels.
Although Alaska's production declined from 2 million barrels
per day (bbl/d) in 1988 to 864,000 bbl/d in 2005, it is still
the second largest oil producing State when Federal offshore
production is excluded.
Alaskan Production
figure data
The Trans-Alaska Pipeline Systems (TAPS) connects the North
Slope oil fields with the Port of Valdez in southern Alaska.
From Valdez, crude oil is shipped primarily to refineries located
on the U.S. West Coast.
Shut-in and Impacts on Energy Markets
On August 6, 2006, BP America announced the shutdown of about
400,000 bbl/d of crude oil production from the North Slope Prudhoe
Bay field because of corrosion discovered in the pipelines that
gather crude oil from the producing wells for delivery to the
Trans-Alaska Pipeline. The greatest impact of the lowered Alaskan
crude oil production will likely be on the West Coast, which
consumes almost all of the Alaskan oil production. Since the
initial announcement, BP has been revising their production
estimates.
CA and WA State Refineries Still Depend Heavily on Alaskan
Crude
figure data
The reduction in Alaska crude oil supply can be made up for
in several ways. The primary means is via a drawdown of crude
oil or product stocks and substitution of other supplies for
the Alaskan crude oil. As of August 4, 2006, crude oil stocks
on the West Coast were 2.2 million barrels higher than August
5, 2005, and U.S. crude oil stocks were over 11.8 million barrels
higher. Similarly, gasoline and distillate fuel product inventories
are above last year's levels for the United States (4.6 and
2.5 million barrels, respectively). Gasoline inventories for
Petroleum Administration for Defense District (PADD) V (PADD
V includes Washington, Oregon, California, Nevada, Arizona,
Alaska, and Hawaii) were 30.2 million barrels, slightly less
than last year. Distillate stocks were 12 million barrels, almost
2 million barrels more than last year. The Strategic Petroleum
Reserve (SPR), which currently holds about 688 million barrels
of crude oil, may also serve as a source of crude oil supply.
Additional imports of crude oil and petroleum products are another
feasible source of replacement supply.
EIA's
Short-Term Energy Outlook (released August 8, 2006)
raised the forecast for the August 2006 West Texas Intermediate
(WTI) crude oil price to $76.50 per barrel, an increase of $3.00
per barrel from our forecast last month. The higher forecast
WTI price is a result of the additional pressures that occurred
in July and the projected reduction in Alaskan oil production.
Petroleum product prices are also expected to be higher in August,
particularly on the West Coast where substitute oil supplies
will likely require higher transportation and processing costs.
While complete estimates of the volume and duration of reduced
Prudhoe Bay crude oil production are not yet available and will
not likely be for several days, the Short-Term Energy Outlook
assumed that Alaskan crude oil production will be reduced by
300,000 bbl/d from EIA's expected level in August, 400,000 bbl/d
in September and October, 300,000 bbl/d in November, 200,000
bbl/d in December, and 100,000 bbl/d in January, then return
to full production. This production outage scenario was based
on BP's initial estimate that the shutdown would last "several"
months and is subject to change as further information becomes
available.
Weekly Stocks and Inputs
|
8/4/2006
|
7/28/2006
|
change from previous week
|
Year
Ago |
change
from previous year |
Crude
Oil Stocks (million barrels) |
US |
332.6
|
333.7
|
-1.1
|
320.8
|
11.8
|
PADD V |
53.8
|
55.5
|
-1.7
|
51.6
|
2.2
|
Total
Motor Gasoline Stocks (million
barrels) |
US |
207.7
|
210.9
|
-3.2
|
203.1
|
4.6
|
PADD V |
30.2
|
31.9
|
-1.7
|
30.3
|
-0.1
|
Distillate
Fuel Stocks (million barrels) |
US |
132.4
|
132.6
|
0.2
|
129.9
|
2.5
|
PADD V |
12.0
|
12.3
|
-0.3
|
10.1
|
1.9
|
Crude
Oil Refinery Inputs (thousand
barrels per day) |
US |
15,608
|
15,516
|
92
|
15,972
|
-364
|
PADD V |
2,790
|
2,751
|
39
|
2,542
|
248
|
|
source: EIA. This Week in Petroleum,
August 9, 2006
|