Open Thread - BP Loses Prudhoe Bay Supply

by Steve

On a day when the AP reported the results of a study that indicated oil refiners were lining their pockets with extra profits not tied to the cost of oil, British Petroleum Alaska reported tonight that they have suddenly found corrosion in a Prudhoe Bay oil transit line and will have to shut off what could be 400,000 barrels a day from Alaska as early as this week.

BP officials said they didn't know how long the Prudhoe Bay field would be off line. "I don't even know how long it's going to take to shut it down," said Tom Williams, BP's senior tax and royalty counsel.

Once the field is shut down, in a process expected to take days, BP said oil production will be reduced by 400,000 barrels a day. That's close to 8 percent of U.S. oil production as of May 2006 or about 2.6 percent of U.S. supply including imports, according to data from the U.S. Energy Information Administration.

At a time of record profits, significantly generated it turns out from refining markups and not the cost of oil itself, it appears that BP isn’t spending any of that money on maintenance or line replacements. I’m sure the shareholders have been happy with their dividends, but this is another great argument why this country’s economy should not be held hostage to Big Oil’s priorities.