The ebb and flow of Alaska's gas.

• Author: Bradner, Mike
• Position: OIL & GAS

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It wasn't evident to the Alaska motorist, but the state's gasoline supply went to empty, very briefly, in late August. Thankfully there was enough fuel on hand with retail stations in Southcentral and the Interior, and Tesoro's bulk fuel tanks in Anchorage were refilled within a day from the company's refinery at Nikiski, near Kenai.

It was a temporary glitch but it could have been more serious had Flint Hills not been able to get its unit back into operation just after Labor Day.

For those who were aware of it, however, the event illustrated how fragile the state's fuel supply and distribution system is despite the fact that the a fifth of the nation's domestic oil supply comes from the oil fields in far northern Alaska.

The disruption was caused by a temporary outage in a gasoline production unit at the Flint Hills refinery in Fairbanks. Fuel distributors had to hustle to shift supplies to make sure their customers were OK. Only one retail station near Fairbanks ran out of gasoline briefly. Ironically, it was in North Pole near the Flint Hills refinery.

REFINERIES TRY AND COPE WITH SUPPLY

Alaska is self-sufficient for the bulk of its liquid fuels, gasoline, diesel and heating oil, and jet fuel, which is a major advantage for the state. The Flint Hills refinery at North Pole, near Fairbanks, and the Tesoro refinery at Nikiski, near Kenai, supply almost all of the state's fuel. PetroStar Inc. operates two other refineries, one at North Pole and the other in Valdez, that make jet fuel, diesel and a variety of other products.

Flint Hills and PetroStar receive crude oil from the Trans-Alaska Pipeline System, or TAPS. The refineries are built very near the pipeline, which means they are assured a steady supply of crude oil unless pipeline operations are curtailed, which has occurred occasionally--then these refineries' total dependence on TAPS becomes a liability.

Tesoro, on the other hand, gets only part of its crude oil supply through TAPS. Crude oil purchased in Valdez is shipped by tanker from Prince William Sound to Cook Inlet, where the refinery is located. Tesoro also gets crude oil from Cook Inlet oil fields and purchases oil from abroad to make up the difference.

Kip Knudsen, Tesoro's public affairs manager, says the company would like to get all of its crude supply from Alaska. However, the Cook Inlet fields are declining in production the bulk of the North Slope oil moving through TAPS is owned by large integrated companies that want crude oil for their own refineries on the U.S. West Coast. There isn't a lot of North Slope oil available for independent refining companies, Knudsen...