- The Washington Times - Tuesday, August 8, 2006

1:41 p.m.

Energy Secretary Samuel W. Bodman said today it could take months to resume normal shipments of Alaskan oil but that there are adequate supplies to make up for the loss to West Coast refineries.

“My sense is we’re in pretty reasonable shape,” Mr. Bodman told reporters at a news conference.

He said there are relatively high inventories of crude oil in the system and that oil can be diverted from other producers, including Saudi Arabia and Mexico, to meet refinery needs.

About 400,000 barrels a day of Alaskan crude oil is expected to be lost because of a shutdown of North Slope operations because of corrosion problems with pipelines.

Mr. Bodman said officials at BP Alaska told him it would “take probably months to fix” the pipeline problem, “so we are going to have to deal with the issue at hand.”

BP Alaska was forced to shut down its North Slope oil field because of extensive corrosion in two of three feeder pipelines that transport oil into the trans-Alaska pipeline. The 400,000-barrel-a-day oil field accounts for half the oil from the North Slope.

However, Mr. Bodman said, “a complete shutdown of the Prudhoe Bay system may not be necessary.” He said company officials had told him they may be able to make repairs to some of the damaged lines while continuing production.

Mr. Bodman gave an upbeat assessment on the supply picture for West Coast refineries, which rely heavily on Alaskan crude.

“Substitutions for Alaska crude oil, we believe, are available,” he said.

The secretary cited a new report released yesterday by the Energy Information Administration that showed oil inventories at 5 million barrels a day higher this July than at the same time a year ago.

In addition, Mr. Bodman said, there are indications that other producers, including Saudi Arabia, have spare capacity and can divert oil to the West Coast, if necessary. Also, the government is prepared to make oil available from the Strategic Petroleum Reserve, if necessary, he noted.

“We believe we know how to handle this type of situation. … There appears to be adequate supplies,” Mr. Bodman said.

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