North Slope spill costs state, could threaten line

January 10, 2011|By Jackie Bartz | Channel 2 News

ANCHORAGE, Alaska — The Trans-Alaska pipeline remains closed after an oil spill over the weekend. Crews are working around-the-clock on repairs, but the state says every day the pipeline sits inoperable, the state loses millions.

The pipeline transports around 630,000 barrels of oil each day, but right now it sits at zero, and response crews say they don't know when it will be up and running again.

The spill occurred at Pump Station 1 Saturday morning. It was contained in a cement building.

Emergency crews from Alyeska and the state and federal government have cleaned up about 17 barrels of oil -- that's about 700 gallons.

It's risky repairing the pipeline in the cold, but it's also dangerous to just let the oil sit.

“Restarting under those conditions can cause a whole host of other problems. So we want to get that oil moving as quickly as possible, so we can avoid a very long duration shutdown,” said Michelle Egan, a spokesperson for Alyeska.

Cleanup crews say there's a trace of water in the oil.

Alyeska is worried that water could freeze in the pipeline and ice could destroy pumps if it passes through.

The emergency response team has decided to construct a 170-foot long pipe to bypass the leaking section. The spill came from a line that feeds the main line.

The construction will take place in Fairbanks. The pieces will be shipped to the North Slope.

While crews work on a fix, Alaska's economy is feeling the effects.

According to the Department of Revenue, the state is losing $18.1 million a day in royalties and production taxes.

“It is an impact. Oil production is the lifeline of our economy; our state commerce depends on money that's being generated from oil and it will have an impact on the state, and it will have a smaller impact on the companies that are developing,” said Jason Brune, with the Resource Development Council.

Production companies on the North Slope have scaled back production to 5 percent -- that crude is being put in storage tanks.

Meanwhile, crude oil prices rose about $1.20, putting it at over $89 a barrel. Economists say as the days pass without a functioning pipeline, that figure will likely go up.

Because the oil spill was contained in a cement building, crews say there was no environmental impact.

Contact Jackie Bartz at jbartz@ktuu.com

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