What will this do to gas prices?

Oil company BP has indefinitely shut down the nation's biggest oilfield after finding a pipeline leak, removing about 8 percent of U.S. oil production and stoking fears that already high gas prices will shoot up further.

Steve Marshall, president of BP Exploration Alaska Inc., said Sunday night that the eastern side of Prudhoe Bay would be shut down first, an operation anticipated to take 24 to 36 hours. The company will then move to shut down the west side, a move that could close more than 1,000 Prudhoe Bay wells.

Once the field is shut down, BP said oil production will be reduced by 400,000 barrels a day. That's close to 8 percent of U.S. oil production or about 2.6 percent of U.S. supply including imports, according to data from the U.S. Energy Information Administration.

BP officials said they didn't know how long the Prudhoe Bay field would be off line. "I don't even know how long it's going to take to shut it down," said Tom Williams, BP's senior tax and royalty counsel.

It is unclear if this is a case of production being down for a wek, or whether it will take longer.

But this should serve as a spur to opening up off-shore drilling and other oil exploration -- and put to rest the notion that oil companies are not good stewards of the environment. After all, BP is acting on its own, not based upon a government mandate to stop production.

Posted by: Greg at 11:18 PM | Comments (1) | Add Comment
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