That 33% is actually circulated to keep the oil flowing until...

That 33% is actually circulated to keep the oil flowing until they have enough to market at Valdez, so the delivered throughput is probably significantly lower. But you knew that.

And yet, for one of the big boys (or girls) to commit to their project, they will require all the capacity they can get and they have far more political clout AND "Chinese walls" in their own organisation to ensure that pipeline. Also, they will swing the aggregation cloud to suit their own spec crude and volumes - but of course you are well aware of how TAPS actually works for the smaller players.

Agree! BP and its partners at Prudhoe Bay have been re-injecting huge volumes of produced water. Over 1 million barrels a day these days. Difference being most of it is being used in production support, in reservoir, as per stock-standard practice in most conventional reservoirs. Ghawar is running at over 90% water cut these days, and they keep pumping that water in. No problems at all. So why the big fuss? Well, I'm sure you are also aware that re-injecting produced water into an already stimulated coal seam, tight perm or shale, is completely counter productive as you are only making positive cashflow volumes post de-watering. That leaves non-formation reservoirs - be they aquifers (hmm, benzene water wells), older depleted fields (user pays), etc. in a seismically active region. Hope they have HBF!

Oh, and before I forget another point, whilst onshore flaring was allowed in the Lower 48 per Obama directive to encourage native US production, can't see that being so easy in AK. Even with the Great Tangerine Dream in the WH. While we're on the subject of L48 unconventional production, most smaller operators went out of business at under $45 oil. Admittedly costs have come down dramatically, but your full-cycle breakeven will still be around $40 to $50 in the sweet spots. That's in regions where people have rigs in their backyard as decorations because they're so cheap. That's in regions that are criss-crossed by roads, power lines, pipelines, people with experience, access to markets, etc etc and a non-seasonal, year-round ability to drill. That's $40 to $50 breakeven non-leveraged cashflows... Makes me wonder what the AK premium needs to be when they have NOT ONE of those things handy other than an existing petroleum code, albeit a conventional one... will the state royalty allow for different cost of supply for unconventional wellheads?

Cheers,
JR.

PS: Again, I have far more faith and hope in their more newly acquired conventional leases. They should work at $50 oil.