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ENERGY TECH
Oil imports from top three suppliers up for U.S.
by Daniel J. Graeber
Washington (UPI) Apr 4, 2013


Coast Guard: Taxes, environment behind Kulluk grounding
Washington (UPI) Apr 4, 2013 - Alaska tax laws, along with harsh winter conditions, forced Shell to make the fateful decision to tow its Kulluk rig from state waters, the Coast Guard said.

The Coast Guard published a 152-page report on the Dec. 31, 2012, grounding of the drillship Kulluk. The report said Shell tried to tow the rig to Seattle for repairs to avoid Alaskan state taxes that would've went into force Jan. 1, 2013.

"If the vessel was still in Alaskan waters, Shell estimated that the tax liability would be in the millions of dollars," the Coast Guard's report said.

Kulluk's grounding off the Alaskan coast followed a 2012 exploration season in the arctic waters of Alaska that was complicated by equipment failures.

The report added that "significant swells" in the region "made towing of the Kulluk exceptionally difficult."

A spokesman for Shell told UPI the company was reviewing the report, adding, "We appreciate the thorough investigation and will take any findings seriously."

Ben van Bueden, Shell's newly appointed chief executive officer, said earlier this year he wasn't "prepared to commit further resources for drilling in Alaska in 2014."

An industry brief Friday from the U.S. Energy Information Administration finds U.S. oil imports are down, though imports from top foreign suppliers increased.

EIA finds U.S. net crude oil imports declined last year to 7.6 million barrels per day. That's 10.2 percent fewer imports than the previous year and the lowest level since 1996.

EIA said in a briefing Friday crude oil imports from Canada, Mexico and Saudi Arabia -- the three top foreign oil suppliers to the U.S. market -- were at their highest in since at least 1973.

"These three countries provided almost three out of every five barrels of oil imported into the U.S. market last year," EIA said.

EIA said Canada, Mexico and Saudi Arabia produce a medium to heavy grade of crude oil that's suitable for the U.S. refinery sector, in contrast to the lighter grade from in U.S. tight oil formations.

"Also, with the exception of Saudi Arabia, these countries are near the United States, with Mexico having a short shipping distance for its oil to the large number of refineries along the U.S. Gulf Coast," EIA said.

Canadian crude oil imports last year set a record at 2.5 million bpd, a 3.9 percent increase from 2012.

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