Prudhoe Bay, Alaska (70°24’ North, 148°31.6’ West), an inlet of the Beaufort Sea and Arctic Ocean, in the Alaska North Slope region, east of the Colville River delta, is the site of the largest oil field in North America.
In 1968, Atlantic Richfield Company and Humble Oil (now Exxon) confirmed the presence of a vast oil field at Prudhoe Bay. The oil field discovered under the Prudhoe Bay region is the largest oil field in North America, and the eighteenth-largest oil field discovered in the world. At its peak production in the late 1980s, the field supplied upwards of 20 percent of the nation’s total oil production. Since then, however, production from Prudhoe Bay has dropped sharply. Tax revenue from oil production allowed the state to establish the Alaska Permanent Fund, which provides Alaskans who have resided in the state at least one calendar year an annual payment.
Five years after the Prudhoe Bay discovery, the United Sates Congress approved construction of the Trans-Alaska Pipeline System (TAPS), with then-Vice President Spiro Agnew casting the deciding vote in the United States Senate. The pipeline, operated by a consortium of seven oil companies forming the Alyeska Pipeline Service Company, traverses 800 miles from Prudhoe Bay to tidewater in Valdez on Prince William Sound. Valdez is the northernmost ice-free port in North America. On June 20, 1977 the first oil from Prudhoe Bay flowed southward. At peak capacity, TAPS carried 2 million barrels of oil per day.
Oil operations in Prudhoe Bay have been the focus of great controversy. Environmental groups charge that vast areas of the sensitive tundra ecosystem have been damaged, while supporters of oil operations argue that Prudhoe Bay is an example of how oil production and wildlife can coexist.
With temperatures dropping past 30° F below zero in the winter, it is a challenging place to work. Oil field workers are flown into nearby Deadhorse, which has no official year-round population. They typically stay two to six weeks, working ten to twelve hour shifts, seven days a week, then fly home for a few weeks rest.
On August 6, 2006 BP Exploration Alaska, Inc. anounced that it had started an orderly and phased shutdown of the Prudhoe Bay oil field following the discovery of “unexpectedly severe corrosion” and a “small spill” from a Prudhoe Bay oil transit line. Shutting down the field took several days to complete. Over time, these actions reduced Alaska North Slope oil production by an estimated 400,000 barrels per day. The decision followed the receipt on Friday, August 4 of data from a smart pig run completed in late July. A smart pig is an internal inspection tool used in the pipeline industry to detect anomalies or irregularities on the inner walls of a pipeline. Analysis of the data revealed 16 anomalies in 12 locations in an oil transit line on the eastern side of the oil field.
The spill was about a mile from the Gathering Center 2, which processes about 100,000 barrels of Prudhoe Bay's daily production of 470,000 barrels. That oil is fed into the 800-mile trans-Alaska pipeline, which provides nearly 17 percent of domestic oil production and carries about 850,000 barrels per day from all sources.
By September 1, 2006, BP had completed ultrasonic inspections of approximately 3,000 feet of pipe in Eastern Operating Area (EOA) and approximately 5,300 feet of pipe in the Western Operating Area (WOA). Those inspections found no integrity issues beyond those identified in the initial inline inspection. BP had completed its orders for 16 miles of pipeline to replace existing transit lines at Prudhoe Bay.