Gas prices headed up on news of pipeline shutdown



You may not be familiar with a company called British Petroleum, but that's what the letters "BP" stand for in those ubiquitous green and yellow service station signs throughout Minnesota and Wisconsin. And soon, no matter where you buy your gas, you'll be paying more for it because of BP's pipeline problems in Alaska.

"Well I don't think it's going to be pretty," said the Carlson School of Management's Alfred Marcus, "This could mean 25-30 cents more, maybe even higher than that."

BP is shutting down the Prudhoe Bay oil field in Alaska for weeks, possibly longer, so that it can replace 16 miles of pipelines that are badly corroded by sludge. The lines link Prudhoe Bay to the Alaska Pipeline which carries the oil down to the southern port at Valdez. It will mean the loss of 400,000 barrels of crude a day, roughly eight percent of domestic production.

"Only when we're absolutely satisfied that those lines are in good condition will we bring those lines back into service, " Steve Walker of BP's exploration division told reporters Monday.

According to NBC news BP operates the Bay for a group of companies, including Exxon, Conoco and Chevron so it will affect more than just BP customers. In addition any disruption in supply is reflected in the world markets and the price, which jumped $1.24 per barrel Monday closing at $76.98.

It comes at a time when oil markets are already jittery over unrest in the Middle East and the approaching hurricane season in the Gulf Coast.

Oil industry analyst John Kilduff told NBC Nightly News Monday that a spike of 15-20 cents at the pump is likely in response to the pipeline incident.

But Kilduff cautioned, "I think we're just one event away from getting upwards of $100 a barrel."

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

He added,"On behalf of the BP Group I apologize for the impact this has had on the nation and our great state of Alaska."

The first sign of trouble in the pipeline came last March when 200-thousand gallons of crude leaked onto the Alaskan tundra. Ultrasonic tests of the lines led BP to conclude much of the line is badly corroded by built-up sludge.

At one point the company used automated devices known as "pigs" which traveled the inside of the pipelines checking for sludge, but according to the Associated Press BP stopped using pigs in 1992 and switched to ultrasonic detection done outside the pipe.

"I would think this would provide a huge incentive for all of us to find ways to conserve on our use of gasoline," Alfred Marcus told KARE-TV Monday.

Marcus, an economist who teaches strategic management at the Carlson School, predicts the latest gas price setback will drive more consumers into hybrids and other fuel efficient cars. And, as workers look for ways to shorten their commutes, it will increase the demand for the high rise condos already changing downtown skylines in cities such as Minneapolis and St Paul.

But Marcus notes even those who aren't in the market for new cars or homes will be seeking ways to cut back on their driving.

"We do have choices as to whether to take trip X versus trip Y, and whether to walk some place rather than starting the car."

The days of just waiting for prices at the pump to head back into the comfort zone are quickly disappearing, as Marcus sees it.

"You know there's short-term, medium term, long-term. In the short term I think people should begin to adjust to the fact that energy prices in the United States are going be higher and they're going to be more typical of what people in most parts of the world are facing."

He also projected that the pipeline shutdown could add more inflationary pressures to the US economy at a time when the Federal Reserve Board has been working to fight off inflation with interest rate hikes.

The energy crunch will no doubt play into the coming elections. Governor Pawlenty last week called on federal regulators to approve E85 conversion kits for cars. And on Monday his DFL opponent Attorney General Mike Hatch said, if elected, he'll create a new cabinet level position of Commissioner of Energy.

The Energy Commissioner's mission would be "to diversify Minnesota's energy portfolio, make the state less reliant on foreign energy sources, and stimulate and promote economic development."

Hatch also pledged to offer more tax breaks and other incentives to help consumers cover the cost of making homes more energy efficient and buying hybrid cars.

In the meantime Independence Party senate candidate Robert Fitzgerald is touring the state in a campaign bus that runs on vegetable oil, namely used French fry oil from restaurants.



CLIFF NOTES: BP is shutting down a 16 mile stretch of oil lines in Alaska (for up to 6 months). Thus, gas prices can increase from anywhere from $.15 to $.50 real soon......


Ain't that just great news!!!!

 

:censored: :censored:

 

I just bought a 4cyl neon for this coming winter. Ill probably be using that everyday now too.

Oops, meant to hit edit, not quote

 

I hear the West Coast is going to get whacked even harder because we get like 20% of our oil from that pipeline or something like that.....that's odd, the west coast would get screwed regardless.....I've said this several times, but how on earth do you guys in the mid-west pay less for gas than we do on the west coast.....we have LOTS of oil refineries right in our backyard and yet we pay some of the highest, if not the highest prices in the nation. It's stupid.

 

I filled up both my cars recently...the mustang took $36 and my neon took $30. I bet a lot of people will be filling up asap before teh prices go up. Sometimes my friend fills up a bunch of gas tanks too when he knows the prices are going to rise.

 

It's a freakin dirty *** game they play........Probaly should fill up before prices jump.

 

this freaken sucks!!!

 

hmm...i think the sixers will have a better time with this than those V8's...lol even though i get just as bad as some v8's do because i dont care about my gas

i just put in 10$ last night at quick trip and that gave me like 3 and a half gallons worth...it was 2.94 and the quicktrip and a halfmile down the road at a BP (closer to my house but i go to QT) had some price like 3.01 or somethin higher

this is when i am glad i made a deal with my parents! i mow everyweek and they pay for my gas! which i would get around 40$ per 2 weeks if they didnt pay for my gas...so it comes to my favor when it will cost me 50$ every 2 weeks to fill it up

 

thats y i go to wawa!!haha

 

damn I think good ol George dubyu needs to go kill us some middle eastern ***** and steal their oil. lol j/k but in all seriousness this sucks monkey ***** but at least i have my 240 to drive which gets good gas millage but the downside is that I have to run Premium 93 octain in it. Damn Japs need to make it run on regular!

 

I honestly think the Feds need to put some kind of price regulations in place to monitor the oil companies....I think exon made like $78 billion dollars last year in profits......They are price gouging just like the energy companies were doing in Cali......the problem is we have a president who's getting rich off the market....no, I don't think he is using his role as president to influence his own personal gain, but he sure as heck isn't doing anything to stop it and the oil companies know that....so guess what we get screwed!

 

couldnt have said it any better

 

jjtgiants put it perfectly. until there is an alternate fuel on the market such as hydrogen or electricity, gas prices are just gonna get higher and higher because the companies know that the country would literaly not run without it. I believe that hydrogen is the fuel of the future. its lighter and more explosive than gasoline and is readily available via the oceans. gasoline engines can easily be converted to run on hydrogen. Imagine if you could fill your car up with water....

 

MOD THAT B****! Fart can FTW! ha ha ha ha...I've actually been thinking about getting a cheap DD also.

 

hell in that case I'm getting getting one to....that's impressive! ha ha ha

 

35 mpg? the bike i just bought gets around 60 mpg... i'll be driving that a lot more often from now on. the other day it cost me $12 to fill it up.

 

i love getting 400 miles to a tank on only 13 gallons of gas yayyyyyyyyy for me

 

[QUOTE=mustangV6_04] but in all seriousness this sucks monkey ***** QUOTE]
HAHAHAHAHAHAHAHAH i like how you put "in all seriousness" and then write "monkey *****" in the same sentence. That was great!!! hahahahaha

gas sucks. I don't even look at the prices though. I know i'm getting robbed i just don't think i want to know how much.....

 

vtak foir the wing do u even have vtak

 

wow can u reach the speed limit and if so in how much time