LARGEST DOMESTIC OIL DISCOVERY IN THREE DECADES …
A Spanish oil company and its partner organization have discovered an estimated 1.2 billion barrels of oil in Alaska’s North Slope.
That’s the largest domestic discovery in three decades …
According to a press release from the company – Madrid-based Repsol SA – the new discovery could generate upwards of 120,000 barrels of oil per day beginning in 2021.
“Repsol has been actively exploring in Alaska since 2008 and finally hit a big one,” noted Nick Cunningham of OilPrice.com.
“The successive campaigns in the area have added significant new potential to what was previously viewed as a mature basin,” Respol SA’s press release stated. “Additionally Alaska has significant infrastructure which allows new resources to be developed more efficiently.”
That’s true. The Trans-Alaskan Pipeline System (TAPS) – built with $8 billion in private money – runs 800 miles from Alaska’s northern coast on the Arctic Circle to Valdez on its southern coast.
The pipeline has been facing “falling output levels” from the North Slope in recent years, though, according to Cunningham.
“The pipeline has a throughput capacity of 2 million barrels per day, but actual oil flows have declined to roughly 0.5 mb/d, and are falling by about 5 percent per year,” Cunningham reported. “That isn’t just a problem from a revenue standpoint, but also from an operational one. Declining throughput means slower moving oil, which means lower temperatures for that oil. Slower and colder oil leads to water separating from the oil and freezing. That can damage the pipeline.”
“Also, oil contains some small amounts of wax, and when the crude flow slows and gets cold, wax separates and sticks to the pipeline,” Cunningham added. “Removing that wax requires more cleaning and maintenance, raising costs and operational problems.”
Former U.S. president Barack Obama did everything within his power to shut down the Alaska oil industry. On repeated occasions – as recently as December 2016 – he invoked his executive authority to prohibit oil and gas exploration on tens of millions of acres of federally owned land in Alaska.
Obama also famously stonewalled several pipeline projects in the continental United States – although new U.S. president Donald Trump has issued several executive orders reviving those projects.
Our energy policy is simple: We support whatever keeps the motors running/ lights on at the lowest possible cost for consumers. Hopefully this new discovery – combined with a more pro-free market approach from the new administration in Washington, D.C. – can keep prices low and keep us from relying on oil from nations that subsidize radical Islamic terrorism.
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