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.
‘TAIWAN-FRIENDLY’: The last time the Web site fact sheet removed the lines on the US not supporting Taiwanese independence was during the Biden administration in 2022 The US Department of State has removed a statement on its Web site that it does not support Taiwanese independence, among changes that the Taiwanese government praised yesterday as supporting Taiwan. The Taiwan-US relations fact sheet, produced by the department’s Bureau of East Asian and Pacific Affairs, previously stated that the US opposes “any unilateral changes to the status quo from either side; we do not support Taiwan independence; and we expect cross-strait differences to be resolved by peaceful means.” In the updated version published on Thursday, the line stating that the US does not support Taiwanese independence had been removed. The updated
‘CORRECT IDENTIFICATION’: Beginning in May, Taiwanese married to Japanese can register their home country as Taiwan in their spouse’s family record, ‘Nikkei Asia’ said The government yesterday thanked Japan for revising rules that would allow Taiwanese nationals married to Japanese citizens to list their home country as “Taiwan” in the official family record database. At present, Taiwanese have to select “China.” Minister of Foreign Affairs Lin Chia-lung (林佳龍) said the new rule, set to be implemented in May, would now “correctly” identify Taiwanese in Japan and help protect their rights, the Ministry of Foreign Affairs said in a statement. The statement was released after Nikkei Asia reported the new policy earlier yesterday. The name and nationality of a non-Japanese person marrying a Japanese national is added to the
AT RISK: The council reiterated that people should seriously consider the necessity of visiting China, after Beijing passed 22 guidelines to punish ‘die-hard’ separatists The Mainland Affairs Council (MAC) has since Jan. 1 last year received 65 petitions regarding Taiwanese who were interrogated or detained in China, MAC Minister Chiu Chui-cheng (邱垂正) said yesterday. Fifty-two either went missing or had their personal freedoms restricted, with some put in criminal detention, while 13 were interrogated and temporarily detained, he said in a radio interview. On June 21 last year, China announced 22 guidelines to punish “die-hard Taiwanese independence separatists,” allowing Chinese courts to try people in absentia. The guidelines are uncivilized and inhumane, allowing Beijing to seize assets and issue the death penalty, with no regard for potential
‘UNITED FRONT’ FRONTS: Barring contact with Huaqiao and Jinan universities is needed to stop China targeting Taiwanese students, the education minister said Taiwan has blacklisted two Chinese universities from conducting academic exchange programs in the nation after reports that the institutes are arms of Beijing’s United Front Work Department, Minister of Education Cheng Ying-yao (鄭英耀) said in an exclusive interview with the Chinese-language Liberty Times (the Taipei Times’ sister paper) published yesterday. China’s Huaqiao University in Xiamen and Quanzhou, as well as Jinan University in Guangzhou, which have 600 and 1,500 Taiwanese on their rolls respectively, are under direct control of the Chinese government’s political warfare branch, Cheng said, citing reports by national security officials. A comprehensive ban on Taiwanese institutions collaborating or
RSS