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Big (Oil) Trouble For BP

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BP shut down the largest oil field in the United States Sunday, amidst suspected pipeline corrosion that caused a leak in the Prudhoe Bay oilfield in Alaska.  The shutdown occurred at 6:30 a.m. Sunday, but BP did not release a statement (and the story did not hit the major news outlets) until today.

This latest news comes during a string of crises for the British gasoline producer. A deadly explosion last year and a major oil spill in March have contributed to the company's negative press.  The indefinite shutdown represents eight percent of all American oil production, at a rate of 400,000 barrels of oil per day. This has led to an immediate price spike of over $1.00 per barrel, according to Yahoo! Finance.

Oil prices are up, but stocks are down today in response to the news.  According to the CBS Radio Network, this news will represent an "immediate increase" in the price American drivers will pay for gasoline at the pump.

BP sent a press release through its Alaskan press office this morning, in an attempt to quell fears that might arise from the shutdown:

BP Exploration Alaska, Inc. has begun an orderly and phased shutdown of the Prudhoe Bay oil field following the discovery of unexpectedly severe corrosion and a small spill from a Prudhoe Bay oil transit line.

But one analyst, Peter Beutel of Cameron Hanover, told CNN that the shutdown may cause additional problems.

"They wouldn't be shutting down Prudhoe Bay if this wasn't absolutely necessary," Beutel told CNN. "Once you shut it down, you don't know what will happen when you come back. It could cause all types of problems."

It may be noteworthy to point out that the advertisements on CNNMoney.com were all BP advertisements.
This comes as CNN was running a series of articles on the rising cost of gasoline, energy conservation and alternative fuel sources. The ads highlight the same points from a BP perspective.

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  • http://www.roblogpolitics.blogspot.com RJ Elliott

    This is what happens when crucial infrastructure is allowed to deteriorate…

  • http://blogcritics.org/writer.php?name=gonzo%20marx gonzo marx

    good point RJ…

    now, ask yerself..”self, why was it allowed to deteriorate to this point?””

    now, the Answer is both simple and tricky…

    ya see, BP doesn’t own those fields or those rigs, they have the contract with the companies that do (Exxon and some others) for providing day to day, maintenance and upkeep

    so, why were the structures allowed to deteriorate that much?

    greed… they waited until the crisis of a spill, and the potential for much worse, before actually maintaining and repairing those pipelines…

    my thing here is the timing…

    i would bet we see $80 a barrel in the next week or two, and i bet gas hits $4 around labor day driving time

    not to mention how fucked folks are going to be this winter for heating oil

    no conspiracy Theory or such here, but something to think about…

    in 2002, pre Iraq invasion, we were bouncing between 20-30 bucks a barrell

    look at the prices now, as well as the corporate welfare of the “energy bill” and the price spikings from instability in the mid-east

    now…just how many of the Administration come from the oil business?

    if nothing else, gross incompetance by people who came from inside the Industry in handling the oil markets, since due to gasoline prices et al, such inflation at the pump royally screws much of our economy… from the price of lettuce at the supermarket, to the cost of people’s commute

    just some Thoughts…

    Excelsior?

  • Heloise

    Bush Should Beat Blair’s Butt Behind BP Spill

    It never ceases to amaze me that the conglomerate that owns BP, the slum landlord of the oil industry, are never known. It is owned by
    the British. BP stands for “British Petroleum” and it is always being called by some other label.

    The latest fiasco with them, recall the oil drums of Katrina; and there is some apology about this and some reassurance at their Web site about this terrible “accident” in Alaska, but who cares? Hell, I did not even know that someone was drilling and sending oil from Alaska. I thought it was still some pristine wilderness. But oh no, BP has drilling and pipeline rights to produce and ship oil.

    You can go to BP home page for more information. I don’t care to link or associate myself with them. It is possible that this will trickle-down to the markets here in the States. They are already saying that California will pay a high price because they are so dependent on that oil source.

    We need electric cars bottomline and not lies, not the high price of gasoline from another foreign source.

    Heloise

  • Heloise

    Jesse Jackson says we should boycott British Petroleum

    His argument, on NPR Monday night 8-7-06, is that there is some funny business going on with the allocation of bids. Blacks are being left out, prices to consumers are rising for home heating as well as gas, while Bush sits back and does nothing to his buddies and nothing for blacks who put in bids for jobs with British Petroleum.

    I avoid the bright-green signs that say “bp.” You can do the same.

    Netemara

  • http://www.roblogpolitics.blogspot.com RJ Elliott

    Well, we’ve got Chavez’s Citgo pulling out of US markets, we’ve got BP screwing the pooch up in Alaska, and we’ve got Exxon-Mobil making record profits…something ain’t right here…