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Alaska state officials say warmer Arctic temperatures depressed oil output

20 March 2018

Production of the Alaska North Slope crude oil has averaged about 518,000 barrels per day (bpd) through the current fiscal year, down from the approximately 533,000 bpd predicted last fall, state Revenue Commissioner Sheldon Fisher told the state Senate’s finance committee on March 19. This was due to warmer than usual conditions, he said, which affected equipment designed to operate at lower temperatures.

Prudhoe Bay: Image - BP
Prudhoe Bay: Image - BP

This year Arctic Alaska has seen the warmest winter on record, and temperature-related declines in production were most pronounced at the giant Prudhoe Bay field, which is particularly sensitive to temperature changes, Dan Stickel, chief economist for the state’s Department of Revenue, told the committee.

In a recent report on the issue, Reuters said that Deadhorse, the camp community at Prudhoe Bay, saw an average December-to-February temperature of minus-0.1 degree Fahrenheit (minus-17.8 Celsius), 14.6 degrees warmer than the 1981-2010 average.

The report quoted an Alaska Oil and Gas Conservation Commission member as saying that among the temperature-sensitive facilities were those handling natural gas, which is cycled through the fields to enhance oil recovery.

North Slope oil production is expected to recover somewhat in the next three months, bringing the fiscal 2018 average to 521,800 barrels per day, according to the state officials’ forecast, which is produced semiannually.

Production in the coming fiscal year is expected to average 526,000 barrels per day, then decline gradually to 493,000 barrels per day by fiscal 2027.

North Slope production peaked in 1988 at over 2 million barrels per day. The decline has been at the heart of a long-term fiscal problem for the oil-dependent state government, which faces a budget deficit of over $2 billion this year.

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