From the
AP, a very short but very alarming story:
BP Exploration Alaska, Inc. began shutting down the Prudhoe Bay oil field Sunday after discovering unexpectedly severe corrosion and a small spill from a transit pipeline.
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Prudhoe Bay represents about half of Alaska's oil production and about 8 percent of U.S. production, according to the U.S. Energy Information Administration.
Company officials said it would take days to shut down the oil field. Once completed, it's expected to reduce oil field production by 400,000 barrels a day.
Follow the link above for the other half of the story - I told you it was short.
This is not an overnight procedure - a BP spokesman goes on to say it will take "several days" to effect the shut down.
Apparently, this is due to a number of long-standing issues with poor maintenance in the Alaska Pipeline that carries crude oil from Prudhoe Bay in the north to terminals in the south.
If you recall, back in March there was a 200,000+ gallon spill in the same field from BP-maintained pipelines that went undetected for days.
Further, whistleblowers had charged that BP was failing to properly maintain it's pipelines.
The DoT, which regulates the pipelines, ordered BP to immediately drain 17,000 barrels of oil from the segment of corroded pipe that leaked on March 2 in the biggest-ever spill at Prudhoe Bay, the US's largest oil field.
The order comes amid increased scrutiny of BP. The company last week shut 12 Alaskan oil wells after whistleblowers said some 50 had been leaking.
It looks like BP complied with the request to properly test their pipelines, and found multiple instances of corrosion.
There is no indication how long this shutdown will last, but even a few days of losing 400,000 bbl (that's barrels, not gallons) of oil could give the market the shock we've been waiting for to push us over the $100/bbl mark that Jerome a Paris has been predicting.
Will update as more news becomes available...
Update 1: For comparison, Hurricane Katrina caused a temporary shutdown 1.3 million bbl/day.