Weather disrupts Alaska oil flow

ANCHORAGE, Alaska – The nation’s largest oil field and the trans-Alaska oil pipeline were shut down Tuesday after poor weather at both ends of the 800-mile pipeline caused havoc.

Analysts said any impact on oil prices would depend on how long it takes to restore production and distribution of the region’s oil.

BP PLC said high winds were to blame for a power outage that shut down Prudhoe Bay in northern Alaska. Production fell to about 20,000 barrels Tuesday; about 350,000 barrels were produced Monday.

Separately, Alyeska Pipeline Service Co. shut down the trans-Alaska pipeline as a safety precaution after fiber-optic communication lines that allow operators to remotely control valves were knocked out of service, presumably by flooding.

Alyeska spokesman Mike Heatwole said company protocol calls for the pipeline to be shut when valves cannot be closed – to limit the size of any spills – remotely. The valves must be then staffed by crews that can manually operate the valves, he said.

Fimat USA oil broker Mike Fitzpatrick said the market does not appear concerned, for now, at what appears to be a temporary supply disruption. “I don’t think it’s a very big deal,” Fitzpatrick said.

Oil prices fell to their lowest level in eight months Tuesday, settling at $58.52 a barrel, as doubts mounted that OPEC is on the verge of slashing its output by almost 4 percent.

At Prudhoe Bay, layers of dust and dirt blown by high winds built up on high voltage insulators on power lines, causing a short just before 3 a.m., BP spokesman Daren Beaudo said.

“The whole field came down,” Beaudo said.

Winds were blowing about 12 mph at Deadhorse near the time of the outage, said Tom Dang of the National Weather Service. However, they were blowing significantly most of Monday, with peak gusts of about 66 mph midday Monday.

Beaudo said crews would work Tuesday to wash insulators, restore power and ramp up production. He could not predict whether the work would take more than one day.

Communications are a critical component for operations of the trans-Alaska pipeline, which carries nearly 17 percent of the nation’s domestic oil supply daily.

“We lost communication with five of our remote gate valves just north of Valdez at about 4 a.m. Alaska time,” Heatwole said.

Flooding and mudslides along the Richardson Highway, which parallels the pipeline and is the only roadway out of Valdez, disrupted vehicle traffic. The Alaska Department of Transportation closed a 65-mile stretch of the highway, starting near Valdez.

The Weather Service said 6.5 inches of rain fell Sunday and Monday at Valdez. Flooding in Keystone Canyon near Valdez hit three bridges hard and moved one 5 feet, said DOT spokeswoman Shannon McCarthy.

Instead of driving, Heatwole said, crews would be sent by helicopter to the remote valve sites. By midday Tuesday, crews had reached at least two valves and were in transit to others, he said.

Separate crews will seek the cause of the break in the fiber-optic line, Heatwole said.

He could not predict when the oil would again flow through the pipeline.