End of Alaskan Oil?

Jim Brown
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If new drilling in Alaska is not approved soon the Alaska pipeline will have to shutdown and the remaining oil in the National Petroleum Reserve will be lost.

I have written about this several times but new information just appeared in a new article on ASPOUSA.ORG. First some background. The Trans-Alaska Pipeline System (TAPS) was built between 1974-1977 to deliver oil from the North Slope to the closest ice free port of Valdez in southern Alaska. The pipeline is just over 800 miles long and it has delivered more than 16 billion barrels of oil since it was completed. At any given time there are nine million barrels of oil in the pipeline and it takes an average of 14 days for a barrel of oil to flow from start to finish.

The peak flow rate was 2.145 mbpd in January 1988. Since then the decline has been steady and dramatic as the production from the North Slope fields declines. The average flow in July was 459,376 bpd. That compares to the average over the past year of 572,835 bpd.

As I have reported before the problem facing the pipeline system is the declining flows. Below a certain flow rate the pipeline will become inoperable due to a number of factors. Those factors include ice buildup, wax buildup and clogging of valves and systems.

Oil comes out of the ground hot and enters the pipeline at roughly 145 degrees when it was flowing at full capacity because the transit time was shorter. The volume of hot oil moving through the pipe kept the pipe warm for a longer distance. The oil would exit the pipe in Valdez at 56 degrees. The pipes are insulated to protect the oil from the sub zero temperatures and to protect the permafrost from the heat of the oil.

At the current lower production levels the oil entering the pipe is not 110 degrees and that means the pipeline cools off quicker. As temperatures decline the wax in the oil begins to separate and cling to the walls of the pipe. This narrows the pipe diameter and increases friction and further slows the transit of oil. This begins to occur at 75 degrees.

As winter approaches the potential for ice buildup increases. The water in the oil begins to freeze at 31 degrees. That is lower than normal because it is slightly salty. The ice flakes in the oil further serves to clog valves and pumps and further slow the transit of the oil. As the water separates from the oil it also increases the corrosion inside the pipes. Several recent leaks have been due to this corrosion.

Pipeline Route

The pipeline manger, Alyeska, recently released a report on the future impact of the declining flows. Read report here

They found that water separates from the oil at rates lower than 500,000 bpd. At rates less than 550,000 the temperature in the pipeline can drop below freezing in winter months and form ice.

Wax buildup is already occurring at current levels and will increase as production declines. There are "pig" runs every 14 days in an effort to scrape out the wax. The pig is a device that is inserted in the pipeline and pushed along by the oil and it scrapes the wax off the walls. As temperatures fall from lower production volumes the amount of wax will increase and the pig will not be able to continue pushing the wax ahead of it and become stuck. Volumes below 350,000 bpd would not be sufficient to push the pig and accumulated wax down the pipe.

Pipeline Wax March 2010

Production of less than 350,000 bpd could allow dirt surrounding the buried sections of the pipeline to freeze and create the potential for leaks as the frozen ground expands and creates "frost heaves."

Alyeska claims that absent any mitigation of the problems above the flow level of reliable operation is 550,000 bpd. Below that level problems will occur and increase in severity as flows decrease.

Solutions being discussed are heating the oil. Unfortunately keeping nine million barrels of oil warm is a major and expensive project. They are considering adding insulation to the pipeline to keep the oil warmer longer but that is also an expensive project given the 800 miles of pipeline through remote areas.

They are also studying ways to speed up the transit of the oil but unfortunately you have to put oil in the North end before you can take oil out the south. You can't speed up transit without liquid input to feed the pumps.

They are considering ways to reduce the water content in the oil before it enters the pipeline. Since the north end of the pipe is well below freezing most of the year that would also be an expensive and time-consuming operation.

They can also inject antifreeze and chemicals into the oil at the north end to reduce freezing and slow the formation of wax. The cost of the chemicals and the cost of getting enough to the North Slope to treat 500,000 bpd is also expensive.

Pipeline Volume Chart

It should be obvious to everyone reading this article there is one sure way to fix the declining flow rates and eliminate all these problems. Produce more oil.

The current administration including the House and Senate are still opposed to producing more Alaskan oil. The environmentalists have them running scared even though we have been producing oil from the North slope for more than 35 years.

Permits are delayed or refused. Leases are not being sold. The entire exploration industry in northern Alaska is on hold. There is plenty of oil there to keep this pipeline running for another 20-30 years. Currently 15% of our oil comes from Alaska. If the volume in the pipeline declines much lower it may have to shutdown or spend hundreds of millions of dollars in mitigation expenses.

The USA is going to need more oil from Alaska very soon. It takes 5-7 years to explore and develop fields and build the infrastructure to bring the oil to market. In Alaska much of that infrastructure already exists in the TAPS pipeline.

We need the government to wake up to the fact there is a serious problem developing and the easiest way to fix it is simply allow companies to explore. Sell more leases and avoid spending millions to upgrade the pipeline. Create jobs, reduce our dependence on foreign oil, keep fuel prices low, produce revenue for the state and the federal government in the form of taxes and royalties. This is a no brainer until you realize there are no brains in Washington.

Jim Brown

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