WASHINGTON – The nation's oil and gasoline refineries received a glimmer of good news on Tuesday when Energy Secretary Samuel Bodman said there are adequate supplies of oil for West Coast facilities, in spite of the shutdown of a major Alaska oilfield.
The secretary also said that a feared full closure of the field may not be necessary.
Bodman's comments come a day after oil company BP indicated that it would shut down its North Slope oilfield due to severe pipeline corrosion, fueling fears of shortages.
"My sense is we're in pretty reasonable shape," the secretary said during a news conference.
He said there are relatively high inventories of crude oil in the system and that oil can be diverted from other producers, including Saudi Arabia and Mexico, to meet refinery needs.
About 400,000 barrels a day of Alaska crude oil is expected to be lost because of the Alaska shutdown.
Bodman said that officials at BP Alaska told him it would "take probably months to fix" the pipeline problem "so we are going to have to deal with the issue at hand."
But Bodman also said "a complete shut down of the Prudhoe Bay system may not be necessary." He said that company officials had told him they may be able to make repairs to some of the damaged lines while continuing production.
Bodman gave an upbeat assessment on the supply picture for West Coast refineries, which rely heavily on Alaska crude.
"Substitutions for Alaska crude oil, we believe, are available," he said.
The secretary cited a new report released Monday by the Energy Information Administration that showed oil inventories at 5 million barrels a day higher this July than at the same time a year ago.
In addition, said Bodman, there are indications that other producers, including Saudi Arabia, have spare capacity and can divert oil to the West Coast, if necessary. Also, the government is prepared to make available oil from the Strategic Petroleum Reserve, if necessary, he noted.
"We believe we know how to handle this type of situation ... There appears to be adequate supplies," Bodman said.
The Associated Press contributed to this report.