Alaska Pipeline Viability -- September 29, 2015

I am posting a note here, but I follow the bigger story chronologically at this post. The AP is reporting:

Royal Dutch Shell's dry hole in the Chukchi Sea may be disappointing to shareholders, but it's potentially devastating to Alaska.

The company's decision to end oil exploration in offshore Alaska for the foreseeable future means the state must find another source to fill the 800-mile trans-Alaska pipeline and solve its economic woes, Gov. Bill Walker said.

"We need to get some oil in the pipeline, and we need to do it as quickly as possible and in the safest method possible," Walker said. He is suggesting the federal government open the Arctic National Wildlife Refuge to natural gas drilling.

The petroleum industry funds upward of 90 percent of state government. Declining oil production and low prices have left Alaska with a billion-dollar budget gap, and state leaders saw rays of hope in Shell's offshore prospects.

Confirmation of the estimated 15 billion barrels in the Chukchi lease area could have led to additional exploration by other leaseholders. And a transition to production — though a decade or more off — would have meant jobs, potential revenue and a source to replenish the trans-Alaska pipeline, now running less than one-quarter full.

Viability of the pipeline based on throughput. Here's a nice article suggesting there's a long way to go before Alaskans have to worry about that. The pipeline carried 2 million bopd at its max; down to around 650,000 bopd now; originally the minimum was felt to be in the 350,000 bopd range, but now folks think one could get down to as low as 100,000 bopd and the pipe throughput could still be maintained.