Effects of Alaskan North Slope Crude Oil and Continued Crude Oil Production at Elk Hills Naval Petroleum Reserve

EMD-78-78: Published: Jul 19, 1978. Publicly Released: Sep 6, 1978.

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Alaskan North Slope crude oil is displacing some heavy, sour foreign crude oil imports into the West Coast because of similar qualities and yields. Middle East crude oil imports show a downward trend in that region, and the North Slope's production of crude oil improved the balance of payments by an estimated $1.3 billion during 1977. However, because of limited refinery desulfurization capacity, the West Coast refining industry cannot process all available North Slope crude oil, and this oil will not displace light, sweet foreign crude oil imports into the West Coast in the short term.

Alternatives for disposing of North Slope crude oil which is surplus to West Coast refinery requirements include: movement by overland pipeline to refineries in the midwest and southwest, movement by tanker through the Panama Canal to refineries in the Gulf and East Coasts, and exchanges with foreign countries on a barrel-for-barrel basis. The Elks Hills Naval Petroleum Reserve is currently producing 125,000 barrels per day of crude oil. Two major constraints on increasing Elk Hills crude oil production are lack of transportation systems to accommodate increased production levels and sufficient field production facilities. Despite North Slope crude oil supplies, the following benefits still accrue to the national interest from production at Elk Hills: improvements in the balance-of-payments and displacement of crude oil imports. There is no quantifiable evidence that Elk Hills crude oil is limiting California crude oil production or contributing considerably to the crude oil surplus on the West Coast.

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