More Arctic oil flowed through the trans-Alaska pipeline this year than last

By Yereth Rosen, Arctic Now - January 4, 2018
The Trans-Alaska Pipeline System stands near Copperville, Alaska, on Feb 14, 2017. (Daniel Acker / Bloomberg)
The trans-Alaska pipeline near Copperville, Alaska. (Daniel Acker / Bloomberg)

Oil flow through the 40-year-old Trans Alaska Pipeline System in 2017 was 1.5 percent higher than the year before, making it the second consecutive year of increased throughput and increased North Slope production, the system’s operator said.

The 800-mile pipeline from Prudhoe Bay to the port of Valdez moved over 192 million barrels of North Slope crude in 2017, an average of 527,323 barrels of per day, Alyeska Pipeline Service Co., the consortium that operates the system, reported on Tuesday. Average daily flow was 517,868 barrels in 2016, and throughput averaged 508,556 barrels per day in 2015, Alyeska said.

Last year’s increase in flow was the first since 2002, and the boosted volume enhances Alyeska’s operations, said the company, a consortium owned by North Slope oil producers.

“More oil flowing through TAPS means a safer, more efficient and more sustainable pipeline system,” Alyeska President Tom Barrett said in a statement. “Increased throughput also signals a stronger economy for Alaska and more opportunities for Alaskans.”

In its 40 years of operations, the pipeline has moved more than 17 billino barrels of North Slope crude, Alyeska said.

Peak North Slope production and TAPS oil flow occurred in 1988, when more than 2 million barrels a day moved through the pipeline.

In recent years, TAPS has faced escalating challenges brought on by declining flow, which leads to slower-moving oil and the potential for cooling temperatures, ice formation in the line, and water and wax to drop out of the flow stream and accumulate. Alyeska teams have worked to adjust to the lower flows, including adding heat, monitoring winter operating temperatures and modifying pipeline pigging operations. But the best way to address the low-flow challenges is to bring more oil into the line, Barrett said in the statement.

“We benefit from an external business and regulatory environment that supports increased, responsible exploration and production on the North Slope and in the Arctic,” he said. “North Slope operators are leveraging efficiencies and technology to increase production and discover new oilfields. All of these efforts play into increases in TAPS’ flow levels.”

The increase in Trans Alaska Pipeline throughput is expected to continue, but only in the short term, according to state officials.

The Alaska Department of Revenue has forecasted production in fiscal 2018 to average 533,430 barrels per day, a 1 percent increase over production in fiscal 2017. The state revenue forecast, released in December, predicts that North Slope oil production will begin to decline again in fiscal 2019, then stabilize from fiscal 2024 to 2027..

The production estimates are based on information about industry investment in new fields or in improvements at existing fields, the forecast said.

Even though the state Department of Revenue is expecting total production to decline from fiscal 2019 onward, it predicts that state oil revenues will increase in the next 10 years, from about $1.5 billion in the current fiscal year to about $2 billion in fiscal 2027. That is based on expectations of higher oil prices and results of some adjustments to calculations of state taxes and royalties.