This is the VOA Special English Economics Report.
The oil company British Petroleum has shut down a pipeline connecting
the Prudhoe Bay oil fields in Alaska to the Trans-Alaska pipeline. The Prudhoe
Bay field, north of the Arctic Circle, provides 8 percent of America’s oil
production. It is the largest oil field in the United States.
On August seventh, B.P. said it had discovered a leak and a small oil spill
of four or five barrels in the frozen arctic area. The company said thinning of
the wall of the pipeline had taken place. At the time, B.P. said it was testing
the 35 kilometer oil transit pipeline.
Last Sunday, B.P. cut the flow of 200,000 barrels of oil a day. B.P. plans to
shut down the rest of the line soon. The company says the 400,000 barrels of oil
a day represent half of all the oil produced in Alaska’s North Slope area.
On news of the shutdown, the price of oil increased three percent to
about 77 dollars a barrel.
The Department of Energy remains hopeful that the reduction in oil production
will be limited. On Wednesday, Secretary of Energy Samuel Bodman said he
believed other supplies could be found to take the place of the Alaskan oil.
But, experts say it would probably be months before the flow of oil from Prudhoe
Bay returns to normal.
B.P. said it deeply regretted the action it had to take. It said it is using
all necessary resources to complete the work. BP is not the only company
affected by the shutdown. The Wall Street Journal reports that oil companies
Exxon Mobil and ConocoPhillips own even larger shares in Prudhoe Bay than B.P.
The shutdown is expected to affect the economy of the state of Alaska the
most. Almost 90 percent of Alaska’s money comes from taxes on oil. The
state does not have a sales tax or income tax. The Associated Press reports that
Alaska is losing more than 6 million dollars in oil taxes every day. Alaska
Governor Frank Murkowski has temporarily stopped all hiring of new state
employees. He has called for an investigation of the shutdown.
The affected pipelines are not part of the Trans Alaska pipeline, but feed
into it. B.P. owns 47 percent of the Trans-Alaska pipeline system.
And that's the VOA Special English Economics Report, written by Mario Ritter.
Transcripts and archives are at voaspecialenglish.com. I'm Steve Ember.