Alaska's governor imposed a state hiring freeze because of the millions of dollars in revenue Alaska is losing as a result of a major oil field shutdown, and says he has directed the state attorney general to investigate whether oil company BP could be held fully accountable for the losses.
Earlier this week, London-based BP PLC said it would shut down Prudhoe Bay -- the biggest oil field in the US -- because of a small leak and severe pipeline corrosion. Energy officials have said the pipeline repairs are likely to take months, curtailing Alaskan production into next year.
The expected loss of 400,000 barrels per day (bpd) at today's oil prices means the state is losing about US$6.4 million a day in royalties and taxes, Revenue Commissioner Bill Corbus said.
PHOTO: AP
The state receives 89 percent of its income from oil revenue; Alaska has no state sales tax and no personal income tax. The Prudhoe Bay shutdown will cut in half Alaska's total oil production and the resulting revenue.
Critical
Without money coming in from Prudhoe Bay, Alaska's government can operate for only about two months before going into the red, Corbus said.
"BP must get the entire Prudhoe Bay back up and running as soon as it is safely possible," Governor Frank Murkowski told a joint session of the state legislature on Wednesday.
BP, the world's second-largest oil company, said it would replace 26km of pipeline that carries oil from Prudhoe Bay to the nearly 1,300km Trans-Alaska Pipeline. The Prudhoe Bay field accounts for 8 percent of US domestic output.
"We obviously apologize for the impact this is having on people, and we regret having to take these actions, but our focus is on safe operations and environmental protection, and that's the reason why we've undertaken the action we have," BP spokesman Neil Chapman said.
BP and the US authorities have until today to decide whether the company can maintain some production at the Alaskan oilfield. BP said it was working on two plans, one involving total shutdown of the 400,000bpd field which provides 8 percent of US production, and a second allowing it to keep oil flowing from the western side of the 101,000-hectare site.
"While we have one plan moving forward for the orderly shutdown, we also have a second independent, but parallel plan to look at the possibilities of safely keeping portions of the field operating," Bob Malone, chairman and president of BP America, said.
Decision awaited
BP is carrying out further inspections of 300m of pipe in the western section to assess whether it can continue production, which would run at just under 200,000bpd. The authorities and the company have to reach a conclusion by the weekend, when its shutdown plan is due to be triggered.
"We will be making a decision with the federal and state governments by Friday [today] as to whether we need to continue to take down that line for safety purposes or whether we can maintain production," Malone told US energy analysts in a conference call.
BP has not said how long it expects the replacement programme to take but the US Energy Information Administration said on Tuesday if the field was shut down in its entirety, full production might not be restored until January.
"This production outage forecast is based on BP's initial estimate that the shutdown would last `several' months. Our forecast could change as new information becomes available," the EIA said.
Steve Marshall, president of BP Exploration Alaska, told a conference call that the onset of the Alaskan winter would help rather than hinder the company's replacement program.
"We are far more restricted in the summer months when the tundra is unprotected by a layer of snow and ice. The winter is our friend when it comes to the construction and installation of new equipment and pipe. Productivity does slow down when the temperatures approach minus 60 degrees, but that is several months away," Marshall said.
BP said it was unable to calculate how much the shutdown would cost. Head of investor relations Fergus MacLeod noted that BP's share of the field's production ran at about 100,000bpd and its second-quarter net profit margin was US$25 a barrel.
Japan has deployed long-range missiles in a southwestern region near China, the Japanese defense minister said yesterday, at a time when ties with Beijing are at their lowest in recent years. The missiles were installed in Kumamoto in the southern region of Kyushu, as Japan is attempting to shore up its military capacity as China steps up naval activity in the East China Sea. “Standoff defense capabilities enable us to counter the threat of enemy forces attempting to invade our country ... while ensuring the safety of our personnel,” Japanese Minister of Defense Shinjiro Koizumi said. “This is an extremely important initiative for
Chinese Nationalist Party (KMT) Chairwoman Cheng Li-wun (鄭麗文) today accepted an invitation from Chinese President Xi Jinping (習近平) to lead a delegation to China next month, saying she hopes to promote the peaceful development of cross-strait relations and bring stability to the Taiwan Strait. “I am grateful and happy to accept this invitation,” Cheng said in a statement from the KMT chairperson’s office. Cheng said she hopes both sides can work together to promote the peaceful development of cross-strait relations, enhance exchange and cooperation, bring stability to the Taiwan Strait and improve people’s livelihoods. At today's news conference, Cheng said any efforts to
MORE POPULAR: Taiwan Pass sales increased by 59 percent during the first quarter compared with the same period last year, the Tourism Administration said The Tourism Administration yesterday said that it has streamlined the Taiwan Pass, with two versions available for purchase beginning today. The tourism agency has made the pass available to international tourists since 2024, allowing them to access the high-speed rail, Taiwan Railway Corp services, four MRT systems and four Taiwan Tourist Shuttles. Previously, five types of Taiwan Pass were available, but some tourists have said that the offerings were too complicated. The agency said only two types of Taiwan Pass would be available, starting from a three-day pass with the high-speed rail and a three-day pass with Taiwan Railway Corp. The former costs NT$2,800
The nation’s fastest supercomputer, Nano 4 (晶創26), is scheduled to be launched in the third quarter, and would be used to train large language models in finance and national defense sectors, the National Center for High-Performance Computing (NCHC) said. The supercomputer, which would operate at about 86.05 petaflops, is being tested at a new cloud computing center in the Southern Taiwan Science Park in Tainan. The exterior of the server cabinet features chip circuitry patterns overlaid with a map of Taiwan, highlighting the nation’s central position in the semiconductor industry. The center also houses Taiwania 2, Taiwania 3, Forerunner 1 and
RSS