Alaska Pipeline Leak Could Result in Higher Oil Prices

Jan. 10, 2011

Alaska environmental regulators are overseeing the cleanup of a small oil spill at Pump Station 1 of the 800-mile trans-Alaska oil pipeline, which carries more than 13 percent of U.S.

Alaska environmental regulators are overseeing the cleanup of a small oil spill at Pump Station 1 of the 800-mile trans-Alaska oil pipeline, which carries more than 13 percent of U.S. domestic oil production, according to a report by the Alaska Dispatch. The pipeline remains shut down after a leak was discovered on Saturday.

The pipeline released 9-10 barrels before the leak was detected and the line was shut down, said John Kingston, Platts global director of Business News, in a report on CNBC. While the pipeline should be repaired in relatively short order, Kingston says there is concern about a lengthy delay in bringing the line back into service, as the operators wait on the U.S. government to provide the necessary approvals for a re-start. Currently, 95 percent of oil production from sources that feed into the line has been halted. If there is a significant delay in re-starting the pipeline, Kingston says the per barrel price of oil could rise rather quickly and exports from the Port of Valdez could run dry by as early as the end of the week.

To read the full Alaska Dispatch report on this story, CLICK HERE.

To view the CNBC report on this story, CLICK HERE.

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