Alaskan quake affects some oil facilities, but not all

By Robert Tuttle and Sheela Tobben on 12/2/2018

ANCHORAGE -- U.S. federal authorities issued an emergency declaration for Alaska after a magnitude 7.0 earthquake struck last Friday, Nov. 30, leaving thousands without electricity and temporarily shutting the state’s most important oil pipeline.

Authorities were directed to provide assistance for Anchorage, as well as Kenai Peninsular and Matanuska-Susitna boroughs, according to an alert from the Department of Homeland Security. The temblor hit 8 mi north of Anchorage.

The earthquake affected the 800-mi Trans Alaska Pipeline System that carries crude from the Arctic coast to the marine terminal in Valdez, which was shut for 7 hr. It was restarted late Friday, Alyeska Pipeline Service Co. spokeswoman Michelle Egan said by phone. The line, which has the capacity to move 2 MMbopd, had transported 530,000 bbl on Thursday.

Alaska Gov. Bill Walker (Independent) said it will take more than a week or two to repair roads damaged by the powerful earthquake. The Anchorage airport was reopened Friday afternoon and was operating at reduced capacity, a state official told the Associated Press.

Alaska Air Group Inc. said it temporarily suspended operations at the Anchorage airport following the quake. “We understand there’s considerable damage being reported” at the airport, the company said in a statement.

Progress was made late Friday to restore electricity to thousands of homes, while city workers also responded to reports of 28 mainline water breaks and dozens of requests to cut off residential service because of flooding, the Associated Press reported.

Reduced operations

There was one oil tanker at the Anchorage port, the Pacific Beryl, which was delivering jet fuel from South Korea to ports in Alaska.

Marathon Petroleum Corp. said it reduced operations at its 63,000-bopd refinery in nearby Kenai, while conducting inspections. Hilcorp Energy Co. temporarily shut some of its operations in the area and was inspecting assets, which include oil platforms in Cook Inlet, not far from Anchorage. There had not, as of late Friday night, been any spills or injuries, the company said in an emailed statement.

As of September, Alaska was producing 471,000 bopd, with most of it sent down the Alaska pipeline to Valdez, where it’s shipped out by tanker, usually to U.S. West Coast refineries. No tankers were at the terminal when the quake struck, and “everything is fine down there,” Egan said. A few smaller vessels were moved away from the shoreline.

Alaskan oil production bottomed out in the last two years, after almost three decades of declines from a peak of more than 2 MMbopd in 1988, according to U.S. Energy Department data. The state was the sixth largest oil producer in the U.S. in September, down from third last year. It trailed Texas, North Dakota, Colorado, New Mexico and Oklahoma, states that have experienced a boom in shale fracing in the past decade.

Oil rich

Shortly after the quake, President Donald Trump tweeted that the U.S. government would "spare no expense." The Department of Homeland Security and Federal Emergency Management Agency have since been authorized to provide assistance, as well as federal funding for the disaster.

The recent uptick in oil production came amid new investments along the Arctic coast and a push by Trump to expand drilling in the state. The U.S. administration is moving to expand the territory open for oil exploration in Alaska’s National Petroleum Reserve.

ConocoPhillips said it "doesn’t believe" that the earthquake had impacted its assets in the area. In October, ConocoPhillips received approval to develop its Greater Mooses Tooth 2 project, just a week after announcing first production from the Greater Mooses Tooth 1 development.

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