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View Full Version : Can't get 30 years out of nothin no more



wierdscience
08-07-2006, 09:14 PM
http://apnews.myway.com/article/20060807/D8JBPDN01.html

A.K. Boomer
08-07-2006, 09:43 PM
Don't understand a complete shutdown,,, why cant they build the new line right next to the old one and then turn it off for an hour to make a new connection?

Evan
08-07-2006, 09:47 PM
I understand it perfectly.


"BP deeply regrets it has been necessary for us to take this drastic action," said Bob Malone, chairman of BP America.

Sure you do. Prices went up two bucks on the news. I bet that just breaks his heart.

mark61
08-07-2006, 09:48 PM
Better question is why haven't they had an ongoing repair/replacement plane with the TONS of profits they have been getting from it? Seems like now a days business management completely excludes any common sense!

mark61

ASparky
08-07-2006, 10:03 PM
Phewwww I betcha whoever decided the ultrasonic inspection was enough is in trouble.

Now with 80% they have no choice but shutdown, unless they (if the gov allowed) want to risk it busting and pay the bill to fix the spill.

I guess fixing the old one will take less time than putting in a new one. Though I suspect soon after they have it operational, they will tell the stock market they are adding another to "increase" capacity - then quietly shutdown and fully repair (actually more or less replace) the old ones one at a time.

Dan Craig
08-07-2006, 10:58 PM
The figures I can't believe are that they are planning to spend $72 million on corrosion prevention this year - yet their last quarter net profits are $7.3 billion - so figuring their profits aren't too great for the whole year and they only make about $22 billion net - that $72 million is a little more than .3% - not 3% just three tenths. Don't forget the tax benefit those expenses are as well.

Optics Curmudgeon
08-07-2006, 11:32 PM
This has been warned about for some years now, I expect BP is hoping Uncle Sam declares an emergency and comes up with the dough. If only there were some oil industry friendly people in power....

Joe

JRouche
08-08-2006, 01:39 AM
I expect BP is hoping Uncle Sam declares an emergency and comes up with the dough. Joe


And that's the pisser. They will prolly be subsidized in some way or another, whatta bitch, fat cats getting fatter off the tax payers sweat.

Doc Nickel
08-08-2006, 02:26 AM
I understand it perfectly. Prices went up two bucks on the news. I bet that just breaks his heart.

-Yep. Price goes up two bucks but production drops fifty percent. Sure sounds clever and sneaky to me!

You might want to have that knee checked. A jerk like that could hurt somebody.

Doc.

Doc Nickel
08-08-2006, 02:41 AM
And that's the pisser. They will prolly be subsidized in some way or another, whatta bitch, fat cats getting fatter off the tax payers sweat.

-Does anyone even read the papers? Or do you guys get all your info from "The Daily Kos"?

Oil companies paid the State of Alaska something like four-point-five billion dollars in taxes last year.

We get money back every year, and oil-tax-based funds mean most of the state has no sales taxes.

Going further on the "greedy oil bastards" meme, if you do the math, companies like ExxonMobil, which you guys assume are raking in piles of cash, had roughly a 9% to 10% profit margin.

That's pretty good, earning a billion off of ten billion in sales.

But why not accuse, oh, say, Google of being greedy bastards? They had a forty-five percent profit margin last year.

You guys are all perfectly welcome to stop paying money to those greedy oil companies. All payments to them, unlike taxes to the Government, are purely voluntary. There's alternatives to everything the oil companies make or provide.

What's that you say? Those 'alternatives' are more costly, or harder to get or not as good? Then doesn't that mean what you're paying to those greedy oil fat cats is actually cheaper in both the short term and the long run?

Funny that this group of otherwise intelligent and talented individuals can't seem to get past the "Oil companies = evil" propaganda.

Doc.

Rustybolt
08-08-2006, 09:52 AM
It's not like they stuff it in a mattress or something. I wonder how much of the cost of repairs are for environmental remediation. There is also the fact that with the profits they will create jobs.They will have to spend it or they'll get taxed on it. The profits are another incentive to draw other people into producing petroleum products.

free market (capitolistic)processes are far from perfect, but they are much more efficient than any of the other alternatives.

Evan
08-08-2006, 10:07 AM
Yep. Price goes up two bucks but production drops fifty percent. Sure sounds clever and sneaky to me!

You didn't read the article, did you? It accounts for 2.5 percent of thier total production. If the price goes up $2.50 they make a killing. The price of oil is all about perceptions, not reality.

A.K. Boomer
08-08-2006, 11:02 AM
WOW -- never knew google had the same kind of responcibilities that big oil does, the more you know huh.... also didnt realize they could bring a country to its knee's if they were negligent... i really dont think we should compare the two do you ?

Evan
08-08-2006, 11:25 AM
I invest in oil. The price of oil is entirely controlled by the perception of the speculators and market manipulation is normal. Geopolitical events are a far bigger factor than actual supply and demand. It's a high risk game investing in the oil business and it requires extreme attention to what is going on worldwide. I pay attention because I sometimes have a lot at stake. Earlier this year I missed an additional several thousand dollars profit by placing a sell order 24 hours too late. I still made 16% profit in 3 days though. I don't lose money either.

It's a giant game of poker and the secret is knowing when to hold'em and knowing when to fold'em.

As a friend of mine in the investing business says, "You can make money in a bull market, you can make money in a bear market but pigs get eaten".

The oil market is all about making money and lots of it. Big oil companies are not charitable organizations. At the higher levels of investing, especially by those with the power to make decisions that affect the markets, it is usually about greed. I forget the name of the guy who was convicted of insider trading back in the 80s but when asked about greed he replied that "greed isn't the main thing, it's the only thing".

A chance to manipulate the market in this manner without a significant impact on the supply of a global corporation such as BP is too good to pass up. The measly 2.5 percent of production isn't lost either. It will ship later when the price is even higher.

Trying to analyze this in terms of what makes sense from a standpoint of what should be done to make the pipeline reliable and low maintanance gets you nowhere. Those aren't the terms of reference of the people who built it. Their goal is to maximize profit in the shortest period of time possible.

Evan
08-08-2006, 11:34 AM
You guys are all perfectly welcome to stop paying money to those greedy oil companies. All payments to them, unlike taxes to the Government, are purely voluntary. There's alternatives to everything the oil companies make or provide.

Sure thing. The oil companies are the dealers and Americans are the Junkies. Don't expect the junkie to kick the habit without a fight and don't expect the dealer to have any morals or sympathy.

pcarpenter
08-08-2006, 12:26 PM
The article said 2.5% of "supply" including imports according to the U.S. Energy Information Administration.

I read that to be 2.5% of all the oil we use. Numbers being tossed about yesterday said 8% of domestic oil supply (all oil companies combined) if I recall correctly. It could be a much bigger percentage of BP's supply alone.

If we are all worried about how much we pay for gas, how about the hogs share the Government gets.....way exceeding oil company profits. Look, for example, at the fact that there is a U.S. Energy Information Administration. I wonder what it cost us for that bureaucracy to spit out that statistic for our consumption;)
Paul

Rustybolt
08-08-2006, 12:26 PM
Well. If you're talking about futures markets, you're right. But futures trading IS a zero sum game.For every gain therre has to be a loss. The futures markets are actually about trading dollars not commodities.And that goes for any futures.But it is after all a market place and subject to the rules of the marketplace.
There are other factors that determine the price besides the nervousnes of speculators. There is no oil shortage. You can buy all you want at $3.21 a gallon. What there is, is a throughput shortage. Too much oil going after too little refining capacity. It isn't isn't in the best interests of current refinery owners to increase capacity and the US government won't allow any new refineries to be built.
Greed isn't necessarily a bad thing in a freemarket system. After all who has created more jobs Microsoft or Jesse Jackson? Both are greedy.

Evan
08-08-2006, 12:57 PM
BP has a 26 percent stake in the Prudhoe Bay field, meaning its own production would be cut by 100,000 barrels a day, or around 2.5 percent of the company's worldwide production, said spokesman David Nicholas.

http://vts.bc.ca/pics/pixel.gif

Evan
08-08-2006, 01:05 PM
The futures markets are actually about trading dollars not commodities.And that goes for any futures.

Not so. The futures market is about delivery contracts. The contracts have a settlement date and the contract can be traded before settlement. On the settlement date somebody must take delivery of the commodity and the contract must be fulfilled.

Options are a different matter and do not require delivery but only give an option to buy at a certain price. The person letting the option must be able to deliver.

Alistair Hosie
08-08-2006, 02:25 PM
Whydoes a pipe that carries oil need rust prevention treatment does that make sense ?? not to me !!Alistair

Evan
08-08-2006, 02:48 PM
It isn't refined oil Alistair. It contains all sorts of nasty compounds including sulphur compounds.

Millman
08-08-2006, 02:52 PM
One report says the oil has no moisture to CAUSE erosion, so why is that?

Millman
08-08-2006, 03:09 PM
As far as trading futures,, Evan knows his POOP. Is it ever going to happen that the consumer will know what to invest in to be secure? No; the big boys know and we don't. It all is manupilated in "those in the know" FAVOR. These people have NO guilt and...never will. That's the way of business ventures,,,,always has been, and always will be. Personally, I try to stick up for the underdog; which is us. Human nature has always been to take advantage of the unknowing. Then these "Mealy Mouthed Mother ****ers will always take advantage of the unsuspecting. Same on this forum...someone has to be head HONCHO, even though they lie, like government officials;;;;;and the masses believe the bull**** they have to spurt forth. All I can do is hope the majority are smarter than the REST.

Rustybolt
08-08-2006, 03:55 PM
One report says the oil has no moisture to CAUSE erosion, so why is that?


Depending on what kind of crude it can almost anything. Yes there is water in crude. There are also, waxes, acids and metals. Light sweet crude has very few impurities and is the easiest to refine. heavy dark crude has the most impurities and is more difficult to refine and has more waste products. Refineries are built around the type of crude they will most likely encounter.Refineries that can handle many different kinds of crude oil are expensive to operate.



I know it's a contract Evan. But most traders have no intention of of taking delivery of 10,000 bushels of corn at say 2.35 a bushel in dec.. They are trading dollars with the someone who is convinced that their contract will be worth 2.40 a bushel in dec. who also has no intention of taking delivery. By trading back and forth they are setting the price of corn for someone who is going to take delivery of 10,000 bushels of corn in dec is going to pay.

topct
08-08-2006, 03:56 PM
"Same on this forum...someone has to be head HONCHO, even though they lie, like government officials;;;;;and the masses believe the bull**** they have to spurt forth."

Don't say that Millman.

Millman
08-08-2006, 04:06 PM
Well Gene, I have news for you...This little problem is the reason so many forums have been corrupted by ONE person alone, the young guy WANTING TO JOIN has become Numbed to all reactions of his ideas, that he is intimidated by the so-called experts..which DO NOT EXIST. ONLY that person's cronies KEEP outsiders out of a forum. Wake up, you'll be surprised by some of their ideas.

Doc Nickel
08-08-2006, 04:06 PM
You didn't read the article, did you? It accounts for 2.5 percent of thier total production. If the price goes up $2.50 they make a killing. The price of oil is all about perceptions, not reality.

-As a matter of fact, I did read the article. Keep in mind, this is "local news" to me, I read it in the newspaper, not online.


Quoth the Anchorage Daily News, August 7, 2006:
"The extraordinary shutdown will reduce the flow of all North Slope oil by 400,000 barrels a day- nearly half the Slope's normal output[.]

So now we assume that all four North Slope oil companies have colluded to "stage" a pipeline problem in order to jack prices up even more, over what you guys are already considering astronomically-inflated prices? BUT, that boost in prices will be offset by the loss in production...

Wow. No wonder we had a forty-page debate on the other board about whether or not Dowsing works. Seems reality is optional here.


One report says the oil has no moisture to CAUSE erosion, so why is that?

-It's "fresh from the ground" oil, as in just up from the wellhead. There's a considerable amount, sometimes as high as 2% though usually lower than that, of what we call "BS&W", or "base, sand and water".

In other words, anything that isn't oil. Sand and water is obvious, 'base' is basically anything else that settles out, like globules of waxes and other solids.

Basically the pipes get a low level sandblasting all day, and when nooks and voids form at the bottom of the pipe, pockets of water get caught in there, which rusts it, etc.

It's a very slow process, but then again, some of these pipes have been in place and flowing raw crude daily for upwards of 20 and 30 years.

Doc.

topct
08-08-2006, 05:07 PM
"Well Gene, I have news for you...This little problem is the reason so many forums have been corrupted by ONE person alone, the young guy WANTING TO JOIN has become Numbed to all reactions of his ideas, that he is intimidated by the so-called experts..which DO NOT EXIST. ONLY that person's cronies KEEP outsiders out of a forum. Wake up, you'll be surprised by some of their ideas."

The most recent corruption of this BBS is from you. Butt Head.

Millman
08-08-2006, 05:09 PM
Yeah, Gene, you are a FORCE to be reckoned with.

topct
08-08-2006, 05:24 PM
"Yeah, Gene, you are a FORCE to be reckoned with."

Maybe.

You wanna play stink finger, play it with me. You leave everybody else alone.

Evan
08-08-2006, 05:34 PM
So now we assume that all four North Slope oil companies have colluded to "stage" a pipeline problem in order to jack prices up even more, over what you guys are already considering astronomically-inflated prices? BUT, that boost in prices will be offset by the loss in production...

Let's see... We have a company in control of the pipeline that shuts it down. It jacks up prices worldwide and has minimal effect on that company's production while the worldwide price increase boosts their revenue. Further, it does have a significant impact on the production of their competitors and their reputation for reliability.

If I was the Board I would fire the CEO for not doing it.

Doc Nickel
08-08-2006, 09:36 PM
Let's see... We have a company in control of the pipeline that shuts it down. It jacks up prices worldwide and has minimal effect on that company's production while the worldwide price increase boosts their revenue. Further, it does have a significant impact on the production of their competitors and their reputation for reliability.

If I was the Board I would fire the CEO for not doing it.

-And you missed it again. There are four companies on the North Slope, all of whom share much of the piping. You're trying to tell me that all four of them colluded to apparently fake this pipe problem just to jack up the stock price another buck or two, at a time they're already posting record profits.

And that you're saying the jump in price will both offset the halving of North Slope production, AND the current estimate of $50 million plus it'll cost to replace the pipelines.

Not every energy CEO is Ken Lay, and remember, Lay got caught.

Doc.

Evan
08-08-2006, 09:57 PM
And that you're saying the jump in price will both offset the halving of North Slope production, AND the current estimate of $50 million plus it'll cost to replace the pipelines.

Sure, if you are BP. I said nothing about collusion, it's their part of the pipeline in trouble. As I said, the "lost" production isn't lost, just deferred. Meanwhile a 3% increase in price easily covers a 2.5% reduction in current production. They win.

J. Randall
08-08-2006, 09:57 PM
Doc, I worked for severel yrs. as a gauger purchasing crude oil. I never heard of BS standing for base and sand. I always thought BS&W stood for basic sediment and water. We always heated the sample before running it through the centrifuge and any wax globules, parafinn or petroleum solids went into solution in the oil leaving the sediment and water on the bottom. We were allowed to buy a combination of up to 1 percent of the impurities.

As to the corrosion, I worked as a corrosion tech before that. The turbulence of the pumping oil in the line tended to knock the water out of the oil and it would settle in any low spot or imperfections in the line. We also continually battled a bacteria that could live in that enviorment and eat holes in the pipe from the inside out. The chemical name we used escapes me, but it smelled like rotten fish and if you got any on you, it just had to wear off.

I can't beleive that they had not ran a smart pig since 92, especially in that large a line. It is a little expensive, but not hard to do. This problem could not have been any surprise to them, they knew it was coming. James

Doc Nickel
08-08-2006, 10:34 PM
Doc, I worked for severel yrs. as a gauger purchasing crude oil. I never heard of BS standing for base and sand. I always thought BS&W stood for basic sediment and water. We always heated the sample before running it through the centrifuge and any wax globules, parafinn or petroleum solids went into solution in the oil leaving the sediment and water on the bottom. We were allowed to buy a combination of up to 1 percent of the impurities.

-I had a similar job. I worked for the third party (Either CTE or SGS, depending) and we'd either pull samples from the automatic inline sampler, or physically dip the tank, either the shore tank or sometimes we'd pull the samples off the ship or barge itself.

But same game, samples were heated slightly, a demulsifier added to help the water precipitate out, then spun in the centrifuge. We rarely saw 2%, and that's be an "okay, something's wrong" moment, but 0.5% to 1% was pretty common.

My documents read "Base, Sand and Water", though it's possible I'm misremembering the comma. It's been over ten years since I was in the oil field. :) Oddly enough, I seem to remember a LOT fewer evil, heartless bastards than Evan seems to think there are...

Doc.

wierdscience
08-08-2006, 10:34 PM
My gut feeling is this hole,like many a hole in other lines would have been patched externally and put back in service,EXCEPT,someone saw the leak and blabbed.Once it hit the media and the DEQ,EPA got hold of it there was no other choice but to shutdaown and fix it.Course it could also be that fixing a leak repeatedly would cost more than a proper job in the long run

As for oil company profits,they are not excessive by any standards.In addition the bills have not yet begun to roll in from all the damage in the Gulf from Katrina.The repairs to the rigs and production platforms alone is in the tens of billions and they haven't even started working on the pipelines.

I hear plenty of folks crying about the profits now,but nobody said anything about the losses when oil was $14/barrel just a few years ago.That was when my brother,and nearly all of my friends and nieghbors lost the're jobs in the oil patch.

So far as experts,well many have been proven wrong.Like the one who said the north slope would at best produce 1.5billion barrels,now that we are well past 14billion we can safely say he was wrong.Then another said the pipeline would kill all the wildlife and turn Alaska into a desolate wasteland,still hasn't happened after 30 years,guess he was wrong too.

Wareagle
08-08-2006, 11:39 PM
Has anybody stopped to consider the price per gallon of whatever you are drinking (unless it is from a well or tap)? Take bottled water for example; around here a 20 oz bottle will cost you $1.29. There are 128 ounces in a gallon, so that bottled water is costing you $8.26 a gallon. Gasoline is cheap in comparison!

If I were to go into business selling a choice between oil or water, I'd pick the water! Less environmental headaches, less political pressures, and more profit per unit!

LarryinLV
08-08-2006, 11:54 PM
Oil company profits as a percentage of product sold have been pretty consistent the past few years.

China has come online as an industrial nation and has increased demand many times over, but there is still enough crude available.

Most of the problem is all the day traders who panic at any hint of a pipe dripping, dumping and buying oil futures like drunken sailors (its a fugure of speech; no offense to sailors) and driving the cost of a barrel through the roof.

Northslope oil is a nice addition but in the world market is only a drip, but watch the panic that follows.

wierdscience
08-08-2006, 11:56 PM
Has anybody stopped to consider the price per gallon of whatever you are drinking (unless it is from a well or tap)? Take bottled water for example; around here a 20 oz bottle will cost you $1.29. There are 128 ounces in a gallon, so that bottled water is costing you $8.26 a gallon. Gasoline is cheap in comparison!

If I were to go into business selling a choice between oil or water, I'd pick the water! Less environmental headaches, less political pressures, and more profit per unit!

Yup,cheap cup of coffee is $0.75/cup.More suprising is the amount of money spent each year on makeup and haircare products.Seems like $72billion a year for something that literaly gets washed down the drain.

I think the real thieves here are the speculators,they make millions while producing nothing.

In the case of Google,it has been proven time and time again that it's okay to be filthy rich,so long as your also very liberal.

ASparky
08-09-2006, 12:32 AM
Before you get too exited about fixing as the leaks occur, you may want to consider how long it takes to shut off. I might guess it to be 1000 tons or so traveling at say 30mph thats gonna take a few minutes to slow down. Any oil patch people know some real figures?

Millman
08-09-2006, 12:43 AM
[[a 20 oz bottle will cost you $1.29.]] Actually, only the insane would pay for water. People are basically dumber than a box of rocks. Look what they do...pay a church, pay for water, pay for religion, support someone that has to kill another who refuses to believe, such as Catholics, Protestants, any and ALL organized religions. People are so stupid. No longer have an individualistic thought. The best they can do is repeat what someone said before.

cam m
08-09-2006, 01:03 AM
Asparky
Here in Canuckland, most lines have isolation valves every 10 to 20 miles that can be shut off to limit the volume of a spill to that volume between valves. Having said that, the leak has to be discovered and the isolation valves actuated to shut off the flow... Having said that, a 6" line 100,000 ' (19 miles) long holds 3130 bbl of fluid... a 24" line 100000' long holds some 52400 bbls of fluid.

wierdscience
08-09-2006, 01:13 AM
After reading another account of the corrsion in the lines it seems the problem has two componets,one the errosion inside the line and the corrosion on the outside caused by water soaked insulation.

That I have seen here before,only it happens faster here what with no real winter and all.Add to that the wall thickness in the pictures I have seen look to be 3/8" maybe 1/2" at the most,that's not allowing much for corrosion.

Millman
08-09-2006, 01:32 AM
The "PIG" goes through the line and they don't know how to weld or build up a weak section of pipe? Would have to fire them all.

Evan
08-09-2006, 02:04 AM
I was reading that the lines have up to a foot of sludge in them and they tried a pig and had to give up. They decided to use ultrasound but the sludge foiled that testing. So the solution they chose was to do nothing.

The greedy people in the game aren't the people working for the oil companies although some of them make pretty good coin. I know some people in the business including my brother in law. It's the decision makers at the top end of the organizations.

The profits that the oil companies declare are the result of some pretty creative accounting practices that are permitted by law. The same companies enjoy incredible tax breaks that are so rich that even congress and the president are starting to feel embarrased and have decided to cut them back somewhat. They will have to make some pretty drastic cutbacks to make up for the feeding trough full of money that the oil companies received in the last few years.

http://vts.bc.ca/pics/eeio.jpg

http://www.taxpolicycenter.org/publications/template.cfm?PubID=9788

Millman
08-09-2006, 02:12 AM
{{creative accounting practices that are permitted by law}} Evan, why is it that people have a hard time calling a thief ..a thief? Go to the internet and prove to us all how to be "Politically Correct" and why we should use these cute terms. You know it's Bull snot and so does everyone else. People are basically afraid to use the real terms. Congress should be having fisticuffs over this stupidity. Man has no balls, anymore?

Rustybolt
08-09-2006, 08:39 AM
-I had a similar job. I worked for the third party (Either CTE or SGS, depending) and we'd either pull samples from the automatic inline sampler, or physically dip the tank, either the shore tank or sometimes we'd pull the samples off the ship or barge itself.

But same game, samples were heated slightly, a demulsifier added to help the water precipitate out, then spun in the centrifuge. We rarely saw 2%, and that's be an "okay, something's wrong" moment, but 0.5% to 1% was pretty common.

My documents read "Base, Sand and Water", though it's possible I'm misremembering the comma. It's been over ten years since I was in the oil field. :) Oddly enough, I seem to remember a LOT fewer evil, heartless bastards than Evan seems to think there are...

Doc.

I worked for UOP when I got out of college many, many years ago. At the CBC refinery in Canada the first thing they built was a dewatering system.Even before the crude went into the ships it had salt water in it. The next thing was a sulfer plant. They had so much sulfer they couldn,t initially find buyers for it.