Energy and Capital: Last year, Alaskan oil took a blow when the USGS cut their estimate for the amount of conventional, undiscovered oil in Alaska's National Petroleum Reserve (NPR) by 90%.
The NPR — once thought to hold 10.6 billion barrels of oil — is now thought to contain about 896 million barrels. The area is located on Alaska's North Slope, where 97% of the state's oil production is found.
As if the state didn't have enough trouble with Peak Oil...
Even despite two major spikes in oil prices within the last decade, Alaska's oil production simply hasn't been able to recover.
Oh, how the mighty have fallen.
Back in 1988, Alaskan year-over-year crude production increased 3.8%, pumping more than two million barrels per day — making it our largest oil-producing state. But its slight lead over Texas was only temporary.
For the next two decades, Alaska's year-over-year production increased just once!
If things continue at this rate, production could easily affect the performance of the Trans Alaska Pipeline.
Bloomberg reports: "If no new fields come on-line, lower volume makes it more difficult to operate the pipeline because the oil flows more slowly and cools more quickly, increasing the chance of wax buildup and water freezing in the line or gumming up pumping stations."
It doesn't exactly add up to a bright future for Alaska's oil industry. -Energy and Capital