Think About It……… February 13, 2013
Tesoro has an oil refinery in Anacortes Washington, just north of Seattle. Tesoro is looking to the future of crude oil with the dedication of its recently finished, $60 million dollar, Rail Offloading Facility as they received the first of many 100-unit car trains carrying crude oil from North Dakota’s Bakken formation. Tesoro is working hard to tap into the Bakken crude oil where production has increased more than 85% since last June. Tesoro, CEO Greg Goff says that by 2020, the US will be the biggest crude oil producer in the world because of crude oil from North Dakota.
Why is this important to we as Alaskans? Tesoro Refinery Manager Dan Cameron put it this way “Bakken Shale crude oil is less expensive than oil bought from Alaska’s North Slope which lowers our costs at the refinery.”
Think they are not serious about replacing Alaska North Slope crude with Bakken Crude? Well, hear this. The new Anacortes Rail facility features four tracks over 4000 feet long with the capacity to offload up to 50,000 barrels of crude oil per day, nearly half of their 120,000 barrel processing capacity. Goff said, “The amazing thing is that bringing Bakken crude to our refinery is so much more cost effective as opposed to pipelines or by ship from Alaska.”
It is certainly appears to be a wake up call for our legislators in Juneau. What with all the crude oil and natural gas from at least six different shale oil fields recently discovered in the lower 48 how much longer will Alaska crude keep its value. Will declining amounts of crude being shipped in the Trans-Alaska Oil Pipeline begin to sink even faster because of decreased demand of markets out-side.
Alaska’s fragile economy is a three legged stool resting on 31% jobs in the petroleum sector, 35% from the Federal government employees and 34% of the jobs from all other sectors like tourism, fishing and mining.
Who knows what will happen to the Federal government support of our state what with the Feds struggling with over 16 trillion dollars in debt but unless Alaska works at keeping or growing the petroleum leg of that stool our economy will begin to suffer. With all the Shale Crude Oil production, outside, like the North Dakota Bakken field continuing to produce more crude every week and with costs much lower than our crude shipped by pipeline and ship, competition is for the first time becoming a major factor in lower 48 markets.
Hopefully, our legislators will seriously consider the Governor’s proposal for lower production taxes on North Slope Crude Oil producers. They simply must take into account the new “competition factor” that now faces producers in marketing our North Slope crude.
Think About It! JCD 02-13-2013