America’s largest oil field will produce very few barrels over the next several days as operator BP scrambles to fix an electrical problem.
So far, the loss of 300,000 barrels a day of Alaskan output has not rattled oil markets.
BP said electrical shorts that shut down Prudhoe Bay on Tuesday followed three days of dust storms, and then rain, coating insulators on high-voltage lines with mud.
The London-based company, which has faced intense criticism following two oil leaks in Alaska over the past seven months, said the shutdown of its power system was not a reflection of aging infrastructure.
BP spokesman Daren Beaudo pinned the problem on a “highly unusual weather event,” partly attributable to the lack of snow in the region.
But at least one industry analyst questioned whether BP’s latest troubles could be blamed entirely on weather.
“People who are bad carpenters hit themselves on the thumb repeatedly,” said Michael Lynch, president of Strategic Energy and Economic Research Inc. of Winchester, Mass.
Lynch acknowledged that BP faces brutal weather conditions on Alaska’s North Slope and that he did not know the details surrounding the recent power failure. However, he added, “things like this should be dealt with pretty quickly, generally, or not even happen.”
Beuado said the company is systematically removing the mud from the insulators and that the oil field will come on line in phases, but he could not specify when production will be fully restored.
“It’s going to take some time. Don’t know how long. We’ll do it as quickly as we can. The emphasis is on safety,” he said.
The electrical system has been partially re-energized, Beaudo said, though that power has been devoted to the living quarters of its workers. Backup generators also are in use.
For unrelated reasons, the price of oil fell to its lowest level this year on Wednesday.
Crude oil futures have plunged by more than $20 a barrel since mid-July amid rising global inventories, concerns about slowing economic growth and a milder-than-anticipated hurricane season. On Wednesday, doubts grew that there is a consensus within OPEC for an immediate output cut, sending oil futures to $57.59 a barrel.
The vast Prudhoe Bay field covers 3,336 square miles. Alaska’s three major oil companies, operator BP, ConocoPhillips and Exxon Mobil Corp., own 98 percent of the field. Production Monday was a 350,000 barrels per day but that fell to just 35,000 barrels Tuesday after the power outage.
Prudhoe Bay had produced more than 400,000 barrels a day — or 8 percent of total U.S. output — until leaks and the discovery of pipe corrosion led the company to begin shutting down the eastern half of the field Aug. 6.
The eastern side of the field was restarted late last month as the company began to clean out the transit pipeline there.
Most of the electricity at Prudhoe Bay comes from a natural gas-fired turbine that produces 168 megawatts of power. The system has 13 substations and miles of power lines.
The system shorted just before 3 a.m. Tuesday. Wind gusts peaked at 66 mph midday Monday, according to the National Weather Service.
Cleanup plans call for crews in helicopters to use a hot water solution from the air to wash the ceramic insulators.
Trying to power up too quickly could cause a repeat of Tuesday’s event, with the entire system shorting out again, Beaudo said.
The recent windy weather at Prudhoe Bay, where the lack of snow cover allowed dirt and debris to be whipped around, had slowed work at the oil field even before the power outage, Beaudo said.
Indeed, such storms have affected the power system at Prudhoe every three to four years but nothing on this scale recently, Beaudo said.