Speaking of oil, Washington and Cali are about to get bent over due to pipe line.....

[O. L. T.]

If what analysis are saying is true, this particular BP oil pipe line that will be shut down for weeks indeed supplies 8% (the largest supply) of american oil, HOWEVER it only supplies California, Washington, and Hawaii. Therefore, this is where they expect the biggest crunch on prices as barrels will push past $80 up to an expected record high of potentially $100 per barrel!

I expect some increases on the east coast, but it looks like Cali and Washington will be the focus of dramatic spikes in prices.

[mmarshall]

Originally Posted by O. L. T.

If what analysis are saying is true, this particular BP oil pipe line that will be shut down for weeks indeed supplies 8% (the largest supply) of american oil, HOWEVER it only supplies California, Washington, and Hawaii. Therefore, this is where they expect the biggest crunch on prices as barrels will push past $80 up to an expected record high of potentially $100 per barrel!

I expect some increases on the east coast, but it looks like Cali and Washington will be the focus of dramatic spikes in prices.

How can it supply Hawaii? Laying an undersea phone or Internet cable is one thing, but you can't lay a concrete oil pipeline across 2200 miles of ocean from the West Coast.

As far as any further price rises, the only way I can see to stop or limit them is to use less oil...which may mean further cutbacks in driving or other conservation measures. Shut-down pipeline of not, they can't raise the price of oil at the pumps it they can't sell it.

[Lil4X]

I've been gritting my teeth over this story for the better part of the past year. While I have friends at BP who are fine people, there has been a storm gathering on the horizon. BP seemed to be possessed of some kind of magic, spending billions on research and trumpeting their new technologies to the world. Heck, to see their TV and magazine ads, you’d never guess they were in the oil business. Solar power, biofuels, clean energy that belied the fact it was all funded by grubby old facilities that were barely limping along.

As the company spent several fortunes in the development of alternative energy, it spent even more re-inventing itself. It is one of the largest corporations in the world, and has experienced explosive (no pun intended) growth over the past ten to twenty years. First they were "British Petroleum", then to somehow camouflage the fact they were a "foreign" oil company, took the less formal "BP" to reflect their new international nature. Most recently, they have advertised their "BP" as "Beyond Petroleum" - reflecting their growing leadership in alternative energy. Millions upon millions have been spent simply in positioning the company image, but sadly very little has been spent on the infrastructure of the company's basic business - oil and gas exploration, development and refining. Through the smoke and mirrors of the PR campaign, a new, more accurate picture of BP is emerging.

There are the fundamentals of the business, the dirty and costly parts that require regular inspections, maintenance, and overhaul. There are costs associated with compliance with new safety and environmental standards, and maybe because they aren't the sexy technologies they have not received the attention (and budget) they should. We have had two major explosions and fires in BP's Texas City plant in the past year and a half - people were killed - due to maintenance items that were known but not sufficiently addressed. Similar accidents have taken place at other BP facilities here in the US. Granted, much of the blame for these incidents can be placed on obsolete processes that BP inherited when they took over these old Amoco plants in their merger in 1998, but they seem to have made no move to rectify these problems. In each case, the situation was well known and documented, but no action taken.

Now, we discover that some of the pipelines in Prudhoe Bay have not been inspected in since 1999. Serious corrosion went undetected because standard ANNUAL inspections were neglected for years. This is unconscionable. BP’s excuse is that these were feeder lines that were not operated under high pressure, thus were not considered critical. Potentially worse, BP is shutting in production on the last 12 of some 57 wells on the North Slope, most in the Prudhoe Bay area because the wells are leaking fluids under the ice and into the permafrost. Rather than repair the problems, BP plans to plug and abandon them. As these wells are probably nearing the end of their production, that may be a valid option, but one wonders . . .

Amoco seemed to handle the basics of the business well, despite the fact they weren’t a leader in environmental causes. They became a takeover candidate because they couldn’t meet new standards with a network of facilities that were teetering on the brink of obsolescence, and they hadn’t the funds to fix the problems. In their day they made some bold moves into the arctic and deep offshore waters, but the costs of this boldness became overwhelming.

Now BP does not have the lock on the employment of morons – every company has their share. They did not somehow “inherit” a raft of undisclosed problems when they took over outmoded facilities on the verge of collapse. These problems were known and well documented. The company has even been paying regular fines to operate refineries and petrochemical facilities that have been deemed hazardous by federal agencies for over ten years. The Texas City facilities were decrepit monuments to 1950’s technology, but little or nothing was being done except the patchwork required to keep them on stream.

What is becoming painfully evident is that BP has been funding their “environmentalist” image by neglecting the basics. As any car owner knows, if you neglect maintenance, the long-term cost is devastating. You ignore the details at your peril. What seems to be broken here is a corporate culture that pinches pennies on the ordinary costs of business to provide lavish budgets for extreme image campaigns. Like juggling flaming pianos, while it’s an awe-inspiring act, the likelihood and consequences of one little slipup are real and catastrophic.

[Lil4X]

Originally Posted by mmarshall

How can it supply Hawaii?

While a trans-oceanic pipeline would be a technical challenge, it's not impossible. Pipelines are regularly laid offshore by joining and jacketing (with concrete to maintain negative buoyancy) conventional steel pipe sections for great distances - even in deep water. Even better, Coiled Pipeline technology allows somewhat smaller continuous lines to be laid several miles at a time as they are unspooled from a large reel or from the hold of special pipeline lay vessels.

We tend to think of pipe as rigid, but you'd be surprised to see four to six-inch pipe manufactured in a continuous length and spooled onto a 30' to 50' reel for transport. It's really pretty flexible, and handled properly, can be laid at about a strolling pace. Oddly enough, that's the same WW2 technology that fueled the Normandy invasion in the summer of 1944. PLUTO (Pipelines Under The Ocean) floated huge spools of pipe that were laid across the English Channel in a matter of days after the beachheads were secure.

[Lil4X]

Funny isn't it, that the same folks who were against drilling the ANWR are the same ones screaming about the loss of North Slope oil? Now that wells are being shut in - which had been predicted for at least the last twenty years - the "environmentalists" are among the first to raise a stink over potential $4 gasoline.

No field produces forever. the 'Slope has had a good run for 25 years, but the in limited areas where drilling is permitted the pumps are beginning to suck air. We learned a lot about drilling and production in the arctic - drilling contractors and oil operators discovered and implemented new technologies that have revolutionized the industry and made hydrocarbon recovery in the most severe environments clean and practical. We have proven we can meet the strictest standards of environmental protection AND produce large, valuable reserves . . . when a few posturing Senators get out of a business they know absolutely nothing about.

To all of the greenies who were sooo concerned with the herds of caribou, their lifestyles and breeding habits: the herds are larger than they were 25 years ago - this may be your opportunity. As gas prices climb through the roof, maybe you can grab one, jam a bit in his mouth, and ride him to work.

[SCRUFFDOGG]

What gets me is we have one of the biggest refineries on the west coast in Blaine just north of Bellingham, Cherry Point. The crude comes from Alaska on tankers but when Katrina hit and the rigs were lost in the gulf our prices went up, and it's always the most expensive in Bellingham. You can go out to the middle of Idaho or Oregon and gas is $2.50 / gallon, drive to Blaine less than a mile from the refinery and it's $3.30 / gallon. And jump the border 2 miles away in Canada and it's $4.75 / gallon. It's all BS

[mmarshall]

Originally Posted by SCRUFFDOGG

What gets me is we have one of the biggest refineries on the west coast in Blaine just north of Bellingham, Cherry Point. The crude comes from Alaska on tankers but when Katrina hit and the rigs were lost in the gulf our prices went up, and it's always the most expensive in Bellingham. You can go out to the middle of Idaho or Oregon and gas is $2.50 / gallon, drive to Blaine less than a mile from the refinery and it's $3.30 / gallon. And jump the border 2 miles away in Canada and it's $4.75 / gallon. It's all BS

The reason it is $4.75 a gallon in Canada is mostly their outrageous taxes.

It is not surprising that it is cheaper in rural Idaho or Oregon than in the Greater Seattle area where taxes, land and property costs, and the general costs of doing buisness are much higher.

[SCRUFFDOGG]

It's just crazy that even Seattle is less expensive than Bellingham, where you pay the most in our state but can stand there looking at the refinery

[mmarshall]

Originally Posted by SCRUFFDOGG

It's just crazy that even Seattle is less expensive than Bellingham, where you pay the most in our state but can stand there looking at the refinery

I wouldn't want to stand near...or look at......an oil refinery all day. Have you ever SMELLED what comes out of those stacks? I have......in Newark, NJ, the Capital City of oil smoke.

[SCRUFFDOGG]

yeah, I have a friend who is an engineer at the Richmond Chevron refinery in the bay area. He gave me a pretty extensive tour one weekend I was down there to visit a few years back. Not my idea of a healthy work environment.