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Old 06-01-2013, 12:38 PM
 
Location: Interior alaska
6,381 posts, read 11,377,726 times
Reputation: 3445

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Figured that its life cycle is ending, do I'm interested in what others think, this is my view...

The State government has so bloated itself with the constant giveaway programs it has such a high cost of sustainment that if the pipeline blew out and is condemned because of corrosion, they simply won't rebuild it. Which is a major reason it's not running at a higher level of production.

The pipeline was built for a 20 year life cycle and we are now at 34 years. Basically we are on a time bomb, they have to pump so many barrels a day to keep the heat up in the oil being pumped, and at the same time they need to keep the pressure low enough not to rupture the pipeline. The local feeder lines in Prudhoe have already had massive failures and they did a major replacement there, but those were short smaller lines, not the 48" lines that is the Pipeline.

When that source of income to the state disappears overnight, there is no way the State can sustain current levels of giveaway, even if everyone paid 100% taxes on income, because there are too many on Government Welfare and don't/won't pay Taxes to start with! So that option is out...

The unemployment would jump to upwards of 80% in a year's time because almost all of the spinoff oil economy is based on the oil flow and companies would just close their doors. In 1985, ARCO laid off a few hundred workers and the State Economy tanked for four years until the EXXON oil spill dumped three Billion dollars into the cleanup.

Yet people are cutting off their noses when other industries are stopped like Pebble Mine to save the "Fish", which has no proof that they would be endangered other than "Boogieman" scare rants so one guy can keep his private upscale fishing lodge intact. People of that region are heavily indebted to State handouts which will stop when the pipeline does. Already high seas fishing from Foreign countries is draining Alaska's fishing industry, so now we have "Frankenfish"."

When the pipeline stops, things like Pebble mine will be pushed through without any environmental safeguards because the Government will be in a panic and will do a lot of stupid things from a position of being broke.

Not a good outlook for the takers at all, and those that are workers will be out of work as well. The PFD will end, and that big Fund will be sucked dry like a broken dam draining and floodwaters washing our lifestyle away.

Anyone's thoughts about this?
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Old 06-01-2013, 01:06 PM
 
4,472 posts, read 4,761,279 times
Reputation: 1996
The entire state will tank and state and local govt's will be panicing looking for someone to squeeze to sustain their bloated spending. This is the states fault because they would not allow other significant industry build in the state so we rely on a single industry.

Anybody who makes good money and wants to keep that money will likely be forced to move out of state. Real estate will be a good deal but the state will likely tax the crap out of it so it becomes unaffordable to even hold it until a better time. This is the behavior of govt's all over our nation. Instead of cutting spending they look for someone ..... anyone to squeeze.
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Old 06-01-2013, 01:08 PM
 
4,718 posts, read 8,231,949 times
Reputation: 2138
Sounds like I should wait to purchase land in AK. Seems like it will be 'dirt' cheap in a few years if I understand you correctly.
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Old 06-01-2013, 02:20 PM
 
Location: Interior alaska
6,381 posts, read 11,377,726 times
Reputation: 3445
Quote:
Originally Posted by Dakster View Post
Sounds like I should wait to purchase land in AK. Seems like it will be 'dirt' cheap in a few years if I understand you correctly.
There will be parts of the State that will do well locally as their small areas keep up with the industry there. The Kenai area will still have oil production in cook inlet, but since most of that is for local sales, that too may suffer since its sales are not exported at this time, but it is a fraction of what comes off the North Slope. Smaller isolated towns with fishing fleets where the fishermen don't run south with their money after the season. But overall, these will be even eaten up by the politicians trying to rape and pillage trying to cover their careers as the house of cards crumbles.

It's not to late to change directions, but too many people have special interests going on and they stop anything that is" change". There would have to be massive cut backs in State services, grants and free programs, subsidies would need to be cut and so forth. But it isn't going to happen, it will keep going until the entire house of cards falls off the cliff, then all bets are of from anything from mineral resource development with little to no regard to enviromental considerations. Just like when the Eco nuts were against building the pipeline in 1969, they kept stopping it until the fake oil shortage in 1973, then they were swept aside in the panic of looming gas rationing. And had to settle for what Congress mandated, and Nixon signed the "TAPS Act", which mandated the pipeline will be built effectively stopping all Eco lawsuits for construction.

History keeps repeating itself, but few people pay attention, so we repeat it regularly.
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Old 06-01-2013, 02:23 PM
 
Location: Wasilla, AK
2,433 posts, read 3,552,797 times
Reputation: 1758
We have definitely put all of our eggs in one basket with the 90% of the state government funded by oil revenue. The timber industry is no more and every mining project proposed (Pebble, Wishbone Hill, etc...) being shot down. The fishing industry has over fished their resources. That leaves some tourism as the only other industry.
Meanwhile we treat the oil companies like the evil villain and tax them to the point that it's easier for them to put their efforts elsewhere.
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Old 06-01-2013, 02:30 PM
 
4,986 posts, read 7,893,175 times
Reputation: 3255
Quote:
Originally Posted by starlite9 View Post
Figured that its life cycle is ending, do I'm interested in what others think, this is my view...

The State government has so bloated itself with the constant giveaway programs it has such a high cost of sustainment that if the pipeline blew out and is condemned because of corrosion, they simply won't rebuild it. Which is a major reason it's not running at a higher level of production.

The pipeline was built for a 20 year life cycle and we are now at 34 years. Basically we are on a time bomb, they have to pump so many barrels a day to keep the heat up in the oil being pumped, and at the same time they need to keep the pressure low enough not to rupture the pipeline. The local feeder lines in Prudhoe have already had massive failures and they did a major replacement there, but those were short smaller lines, not the 48" lines that is the Pipeline.

When that source of income to the state disappears overnight, there is no way the State can sustain current levels of giveaway, even if everyone paid 100% taxes on income, because there are too many on Government Welfare and don't/won't pay Taxes to start with! So that option is out...

The unemployment would jump to upwards of 80% in a year's time because almost all of the spinoff oil economy is based on the oil flow and companies would just close their doors. In 1985, ARCO laid off a few hundred workers and the State Economy tanked for four years until the EXXON oil spill dumped three Billion dollars into the cleanup.

Yet people are cutting off their noses when other industries are stopped like Pebble Mine to save the "Fish", which has no proof that they would be endangered other than "Boogieman" scare rants so one guy can keep his private upscale fishing lodge intact. People of that region are heavily indebted to State handouts which will stop when the pipeline does. Already high seas fishing from Foreign countries is draining Alaska's fishing industry, so now we have "Frankenfish"."

When the pipeline stops, things like Pebble mine will be pushed through without any environmental safeguards because the Government will be in a panic and will do a lot of stupid things from a position of being broke.

Not a good outlook for the takers at all, and those that are workers will be out of work as well. The PFD will end, and that big Fund will be sucked dry like a broken dam draining and floodwaters washing our lifestyle away.

Anyone's thoughts about this?
Your analysis of the economic effects if the pipeline were to shut down is absolutely correct.

However the reason for low throughput is not because the pipeline is old, broken or corroded. There is no systemic corrosion in the TAPS mainline. Every few weeks a scraper pig is run down the line to remove buildups of wax and other foreign contaminants that could accelerate corrosion. Every couple of years or so a "smart pig" (a scraper pig outfitted with an array of sensors, computers, and transmitters) is run also down the pipe to perform an ultrasonic inspection of every inch of the mainline - from Prudhoe Bay to Valdez. Any corrosion detected is immediately repaired.

The pipeline today still runs at the same pressure it did when it was first opened (it's only the flow rate that has changed). The Maximum Allowable Operating Pressure (MAOP) rating of the pipe is unchanged. This rating is heavily scrutinized by State and Federal Regulators and would be instantly challenged should any corrosion be detected. The pipe remains in it's original condition due to the continuous maintenance performed by the operator.

The reason for low throughput is wellhead depletion. Right now the producers at Prudhoe Bay re-inject large quantities of Natural Gas and Seawater into the aging wells to keep pressure and flowrates up. However decline from old wells is inevitable.

The only real solution is to bring new wells on line. This however has been hampered due to extreme red tape, environmental restrictions, and the Draconian Tax structure of ACES. The recently passed SB21 is the latest, best attempt to correct this and encourage new production - but the usual anti-capitalist, political ignoramuses are now trying to undo this effort as well and put us all back in jeopardy.

The reason for Alaska's declining oil production and thus it's uncertain financial future, is purely a man-made political problem at this point in time. Not a technical one.
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Old 06-01-2013, 02:35 PM
 
Location: Interior alaska
6,381 posts, read 11,377,726 times
Reputation: 3445
Quote:
Originally Posted by AKStafford View Post
We have definitely put all of our eggs in one basket with the 90% of the state government funded by oil revenue. The timber industry is no more and every mining project proposed (Pebble, Wishbone Hill, etc...) being shot down. The fishing industry has over fished their resources. That leaves some tourism as the only other industry.
Meanwhile we treat the oil companies like the evil villain and tax them to the point that it's easier for them to put their efforts elsewhere.
Well the next few years are going to be pretty interesting to say the least! Course with the US Congress spending/ borrowing money like drunk sailors, massive inflation isn't far off and all your savings will be wiped out to nothing when it takes a wheel barrel of money to buy a loaf of bread.

Not a pleasant thought, no matter how you look at it, PFD could be worthless even if the pipeline is still running before it shuts down!
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Old 06-01-2013, 02:44 PM
 
Location: MMU->ABE->ATL->ASH
8,593 posts, read 14,387,059 times
Reputation: 8878
Q.. Do you see the Alaska State gov tapping into the Permanent Fund assets to fund the government?

and reducing the dividend over time (due to less asset, then 0 assets) to support the PFD?

Last edited by flyonpa; 06-01-2013 at 03:02 PM..
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Old 06-01-2013, 02:44 PM
 
Location: Interior alaska
6,381 posts, read 11,377,726 times
Reputation: 3445
Quote:
Originally Posted by Moose Whisperer View Post
Your analysis of the economic effects if the pipeline were to shut down is absolutely correct.

However the reason for low throughput is not because the pipeline is old, broken or corroded. There is no systemic corrosion in the TAPS mainline. Every few weeks a scraper pig is run down the line to remove buildups of wax and other foreign contaminants that could accelerate corrosion. Every couple of years or so a "smart pig" (a scraper pig outfitted with an array of sensors, computers, and transmitters) is run also down the pipe to perform an ultrasonic inspection of every inch of the mainline - from Prudhoe Bay to Valdez. Any corrosion detected is immediately repaired.

The pipeline today still runs at the same pressure it did when it was first opened (it's only the flow rate that has changed). The Maximum Allowable Operating Pressure (MAOP) rating of the pipe is unchanged. This rating is heavily scrutinized by State and Federal Regulators and would be instantly challenged should any corrosion be detected. The pipe remains in it's original condition due to the continuous maintenance performed by the operator.

The reason for low throughput is wellhead depletion. Right now the producers at Prudhoe Bay re-inject large quantities of Natural Gas and Seawater into the aging wells to keep pressure and flowrates up. However decline from old wells is inevitable.

The only real solution is to bring new wells on line. This however has been hampered due to extreme red tape, environmental restrictions, and the Draconian Tax structure of ACES. The recently passed SB21 is the latest, best attempt to correct this and encourage new production - but the usual anti-capitalist, political ignoramuses are now trying to undo this effort as well and put us all back in jeopardy.

The reason for Alaska's declining oil production and thus it's uncertain financial future, is purely a man-made political problem at this point in time. Not a technical one.

That same high level of maintenance was suppose to be done on the feeders lines but was cut corners on as well and those pipes were failing and had to be completely replaces a few years ago, and yet the public was being told the same thing you just said now. So if I'm a bit skeptical, don't take it as a personal attack.what is told in the boardroom verses the trenches isn't always the same, so far actions have trumped words.

Nothing I would love better than if the pipeline went another 40 years.
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Old 06-01-2013, 03:12 PM
 
4,986 posts, read 7,893,175 times
Reputation: 3255
Quote:
Originally Posted by starlite9 View Post
That same high level of maintenance was suppose to be done on the feeders lines but was cut corners on as well and those pipes were failing and had to be completely replaces a few years ago, and yet the public was being told the same thing you just said now. So if I'm a bit skeptical, don't take it as a personal attack.what is told in the boardroom verses the trenches isn't always the same, so far actions have trumped words.

Nothing I would love better than if the pipeline went another 40 years.
Well, yes and no. The Regulatory Requirements for feeder and gathering lines up on the slope was never as stringent as the TAPS Mainline, until after that last accident. So that should change going forward.

However, I don't blame you...but I can't vouch for how BP, Exxon, Conoco, and the other producers do business. But keep in mind, When have you ever heard of a failure of the TAPS Mainline due to corrosion? It's been shot, blown up, sabotaged - but never failed due to neglect.
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