An uptick in oil production on the North Slope has slightly boosted the amount of oil going through the trans-Alaska oil pipeline, the first time in 14 years volume has increased, the pipeline's operator reported Friday.
Last year, oil transport through the line had dropped to the lowest point since 1977, its first year of operation. Legacy fields such as Prudhoe Bay and Kuparuk continue to decline, but a newer field operated by ConocoPhillips called CD5 that went online in late 2015 has performed above expectations.
That the downward trend reversed, at least in a minor way in 2016, was cause for some celebration at the Alyeska Pipeline Service Co., with spokesperson Michelle Egan calling it "great news." Low flows of crude make the pipeline more technically difficult and costly to run. Oil cools more rapidly, and the Slope's thick crude can gum up the line and its components.
"Every barrel matters to us," Alyeska President Tom Barrett said in a written statement. "The more throughput, the better we can plan for the continuing safe operation of the pipeline."
Annual declines have been the norm since the pipeline hit its peak flow of 2 million barrels a day in 1988. The only exceptions were slight year-to-year increases in 1991 and 2002, and now 2016.
In 2015, the pipeline moved 185,582,715 barrels, according to Alyeska. The predicted total amount shipped from the Slope to the Valdez Marine Terminal in 2016 is 188,887,500, a nearly 2 percent increase.
The news comes as the state's oil sector as a whole is cutting jobs and pulling back on capital spending and exploration.
The state is facing a deficit of more than $3 billion caused by a combination of low oil prices and the decline in oil production. Most of the state's budget is paid by oil taxes and royalties.
The slight production increase does not appear to signal a change to the muted medium-term outlook for the industry or the state, according to Ken Alper, director of the state's tax division.
"The increase doesn't mean anything is fundamentally different," Alper said. "We're forecasting a little bit of a dip of production in the next couple years."