Trans-Alaskan PipelineSummaryWorld History of OilOil in AlaskaOriginal ProposalsProposed RoutesFinal RoutePolitical, Social and Environmental BattlesActual Pipeline CostsExpected RevenueCost/Revenue GraphSensitivity AnalysisEnvironmental ConsiderationsVertical Support MembersSlide 15Refrigerated Buried Pipe SectionImpact on Alaskan EconomyImpact of Oil Industry TodayImpact on PayrollNorth Slope Oil Delivered to WestDrilling in ANWRProposed Pipeline RouteSlide 23Pump Station LocationsDrag Reducing AgentWinter ConstructionSlide 27Tanker Route MapEvolution of a Drill site: 1970-presentCash Flow DiagramConclusionTrans-Alaskan PipelinePrivate Industry’s Most Expensive UndertakingSummaryHistoryOriginal ProposalsPolitical/Environmental BattlesFinal DesignEconomic ImpactFuture PipelinesWorld History of OilOil use documented for more than 5000 years1859-First oil well drilled in Pennsylvania1930s-Texas and Saudi Arabia Oil Fields1946-Oil becomes world’s most popular energy source1960-OPEC formedOil in Alaska1968-Announcement of Prudhoe Bay petroleum discoveriesPrudhoe Bay- largest oil field in the US, total production+reserves=10+ billion barrelsTook 10 years to bring to market, could have taken 4, costs of nearly $8 billion, almost twice as much when you add in costs of financing and developing oil fieldOriginal ProposalsSubmarineRailTanker TransportPipelinesPrudhoe Bay – ValdezPrudhoe Bay – existing Canadian pipelinesProposed RoutesFinal RoutePolitical, Social and Environmental Battles 1970- National Environmental Policy ActPipeline frozen within two monthsEIS for three yearsLegislation shaped by TAPSTrans-Alaska Pipeline Authorization Act of 1973 allowed the pipeline to proceed without more interferenceActual Pipeline Costsdescription of costs total amount time begin time end (million $) (month) (month)exploration costs 40.8 1 24archeological survey 2.4 25 48land lease 900 13 24access road 120 37 42drill well 277 13 48pipe & machine 1500 19 22construction 6380 76 114repairs to pipeline 240 114 ----Total Present Worth of Costs: $5,500 millionExpected Revenue1977Oil shipped to West Coast: $17228 (2 million b/d)Oil exported to Japan: $694(100 thousand b/d)Total Revenue: $17,922 million1990Oil shipped to West Coast: $6891(800 thousand b/d)Oil Exported to Japan: $1387(200 thousand b/d)Total Revenue: $8,278 millionPW(Revenue) – PW(Cost) = PW(Profits)$8,300 - $5,500 = $2,800 millionCost/Revenue GraphSensitivity Analysis expected low price low yield low price&yield cost revenue revenue revenue revenuebase 5300 18000 13000 8600 6200rapid construction 6000 18000 13000 8600 6200delayed construction 4300 18000 13000 8600 6200monthly repairs 5300 18000 13000 8600 6200small yearly earthquakes 5500 18000 13000 8600 6200large&small earthquakes 11000 18000 13000 8600 6200rebuild 13000 18000 13000 8600 6200rebuild&large earthquakes 22000 18000 13000 8600 6200Environmental ConsiderationsEarthquakesPermafrostAnimal Migration PatternsOil SpillsVertical Support MembersAbove: Staggered pattern of the pipeline allows the pipeline to withstand earthquakes without cracking the pipe.Below: Pipeline dips down underground to allow for migrating animals to pass over it.Refrigerated Buried Pipe SectionImpact on Alaskan EconomyMore than 70,000 workersPopulation of the state increase 50% between 1975 and 1980State received 20% royalty, created problems when project was delayedImpact of Oil Industry TodayIndustry spends $1.7 billion/year on goods and services=State of Alaska’s general fund spendingIndirectly impacts 25,000 jobs with $880 million in payroll1999- $2.1 billion in spending, $3.1 billion total output with value added$258 million in oil royalties$2000 yearly dividendImpact on PayrollNorth Slope Oil Delivered to WestDrilling in ANWRProposed Pipeline RouteTAPS Daily ThroughputPump Station LocationsDrag Reducing AgentDrag reducing agent (DRA) reduces the loss of energy due to friction as fluid travels through the pipeline. DRA allows higher throughput without additional pumps, and allows earlier rampdown of pump stations as throughput declines.Winter ConstructionCaribou OwlBears CalfWildlifeCoexistsWith ThePipelineTanker Route MapEvolution of a Drill site: 1970-presentCash Flow DiagramConclusionEconomic viability does not seem to be a problem with pipelines (unless there is a dramatic change in the price of oil). Social, environmental and economic impacts instead are what influence construction We recommend further studies before drilling in
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