Los Angeles, Nov 19: California refiners, once awash in Alaska crude oil, imported sharply higher volumes of foreign oil this summer, in a trend experts say could grow if low prices continue to discourage local production.With oil prices slumping to 12-year lows and Alaska fields in natural decline, oil imports to the West Coast -- up 20 per cent this year -- could be the wave of the future, analysts say.
California's growing appetite for foreign crude is part of a nationwide trend, which hit home in August when U.S. Crude oil imports reached a record 9.170 million barrels per day (bpd), according to the American Petroleum Institute (API), a Washington, D.C.-based industry group.
"Imports have been increasing there more than in the past," said Ron Planting, an API analyst in Washington.
Overall, imports to California and the West Coast have averaged 500,000 barrels per day during the first nine months of this year, compared with 400,000 barrels a day in the same period last year.
Imports, moreover,jumped to 800,000 barrels per day in early October, as refiners bought cargoes from countries as diverse as Canada, Iraq, and Indonesia as they boosted output to make enough gasoline for the car-crazy state. That 60 per cent increase in average daily imports was needed to satisfy the region's powerful demand for fuel this summer.
"Demand (was) up and supply (was) down, so it's increased imports," said Sarah Emerson, director of Energy Security Analysis Inc., in Boston.
While the rise in imports has become a yearly event spurred by heavy gasoline demand and maintenance in Alaskan oil fields, this year the situation was made worse by some unusual restrictions on Alaskan output this summer.
At one point, Alaska's daily output of 1.2 million barrels slumped to 250,000 barrels, when operators of the state's 800-mile Trans-Alaska oil pipeline shut the oil artery for two days for valve tests.
Alaska North Slope production "had dropped a million barrels for a few days," said an oil trader in California.
"Soright after late summer and fall, it was not too unusual to see imports coming into the West Coast (refiners), catching up from North Slope maintenance," he said.
Production, furthermore, could be hit next year by the world's low oil prices.
"Projects that are economic at higher oil prices just won'T get done," Ken Boyd, director of Alaska's state Division of Oil and Gas, said in an interview. "The effect at this second is nothing, but it's coming," he said.
The West Coast's overall supply-and-demand picture is unusual. The region is heavily dependent on Alaskan crude, gasoline demand has been exceptionally high, pipeline space to other U.S. Regions is very limited, and California's own oil production also is in decline.
While the rest of the nation has experienced ample crude stockpiles, oil inventories in California and neighbouring West Coast states last week fell five per cent from year-ago levels.
With world oil prices at 12-year lows and producers looking to slash spending next year, theamount of imports depends on the region's ability to pump its own oil.
"Whether the (production) curve is steep or shallow depends on oil prices," Emerson said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.