Shipping Strategic Petroleum Reserve, Mexican, or Saudi crude to the US West Coast to replace Alaskan North Slope (ANS) crude makes no economic or logistical sense. Your article on this point was entirely accurate (Market Watch, OGJ Online, Aug. 9, 2006). There is undoubtedly pressure on BP to stretch out or defer the shutdown of Prudhoe Bay field to minimize any disruption at West Coast refineries.
It’s not a national problem, as long as there are no hurricanes disrupting Gulf of Mexico production at the same time, but it is definitely a regional problem. The West Coast refineries are isolated from the rest of the US and, in fact, most of the major exporting regions. Rearranging 400,000 b/d of deliveries to the West Coast is a difficult economic and logistical problem in general, made much more difficult by the absence of suitable surplus crude production anywhere in the world. All this talk of rebalancing the system from Saudi Arabia, Mexico, and SPR is just talk, nothing more.
Harry Chernoff
Pathfinder Capital Advisors LLC
Great Falls, Va.
