Does anyone want Alaska's natural gas?
Patti Epler |
Aug 14, 2011
Alaska's biggest cheerleaders for developing natural gas and building a pipeline to get it to market are scheduled to gather before the Senate Resources Committee this week to talk -- again -- about projects and plans. Missing from the hearings, however, are people who might want to buy the gas and the companies that would need to sell it. For decades, a big pipeline to export natural gas from Alaska's Arctic oil field -- the largest proven conventional gas supplies in the nation -- has eluded state visionaries because there have been no customers for it. And that means no financing for a line that could cost $40 billion or more to ship gas from the North Slope through Canada. Even a smaller, in-state line that would serve local cities and markets is now estimated at more than $7 billion -- plus or minus 30 percent, state officials have said. Dan Fauske, the head of the Alaska Gasline Development Authority, is slated to give his presentation Monday morning, a report that has been aired at least twice in recent weeks to different legislative gatherings. Sen. Bill Wielechowski, a member of the Resources Committee, has submitted a seven-page list of questions to Fauske aimed at drilling down on the advantages of a smaller in-state line vs. a bigger line to distribution points in Canada. That line is envisioned to have spurs going down through the Railbelt. Wielechowski says he is trying to resolve Alaska's critical energy needs while avoiding a boondoggle that could saddle energy consumers with staggering costs for years to come and ruin the state's fiscal soundness. Department of Natural Resources Commissioner Dan Sullivan and his staff also are on the agenda to talk about Alaska gas, including Cook Inlet reserves which could factor into a pipeline that would run from Cook Inlet to Fairbanks. That twist on the bullet line is getting some attention as gas companies signal renewed interest in Cook Inlet and federal officials have boosted resource estimates. Resources co-chair Sen. Tom Wagoner is one of those interested in the idea. But the "big" gas line isn't off the table yet, even though lawmakers have expressed impatience with the lack of information about what sorts of bids came in to Calgary-based TransCanada Corp. during the "open season" last year. TIMELINE: Alaska's natural gas pipedreamsAs part of the Alaska Gasline Inducement Act (AGIA) the state is committed to reimbursing TransCanada and its partner, Exxon Mobil, up to $500 million. Some Republican legislative leaders in both the House and Senate have been pushing to find a way to end that subsidy unless TransCanada can demonstrate that buyers and sellers are likely on board with the project. TransCanada executive Tony Palmer is scheduled to testify on Tuesday morning about the status of the project. Gov. Sean Parnell and other state officials have been content to let the AGIA process play out without seeking other ways to get Alaska's valuable natural gas off the North Slope and to markets in the Lower 48 or overseas. Korea bypasses Alaska gas for CanadaIn the last month, according to press reports, Korea Gas Corp., the world's largest importer of liquefied natural gas, has been visiting the Canadian Arctic and with an eye toward possibly buying an interest in the Mackenzie Valley pipeline, a project similar to an Alaska gas line. Kogas, as its known, also has talked about building tankers that could carry LNG from the Arctic to South Korea and elsewhere. Kogas didn't reply to requests for comment for this story.
by knipprs | August 16, 2011 - 8:26am
The question that headlines this article, "Does anyone want Alaska's natural gas?" has to be, on the face of it, the dumbest dang question possible! Not the asking of the question, but the questioning of the businesses who will sink money into the project. That is a business decision, and as much as we all admire environmental journalists, they are poorly qualified to tell any business what decisions to make based on the economics of the decision.
by NorthStar | August 15, 2011 - 5:23pm
I had a dream about the gasline the other night. My dreams don't come true.
by AKgasman | August 15, 2011 - 4:33pm
Gas to Korea: The Mackenzie will not fly. What part of the fact don't you understand one cannot construct a 800 gasline to tidewater and compete with those who already have their gas at tide water. I know this may come as surprise to you reporters but just becuse some looks at cow, it does not mean that cow can jump over the moon.
by SPECKLEFOOT | August 15, 2011 - 1:24pm
There are HUGE markets available to us and there always have been. China, with one-sixth of the world's population, increased its LNG imports by 87% last year. Japan says it will be importing LNG after its nuclear disaster. There are huge LNG projects already booted up in Canada, Australia, and the Lower 48. Those projects belong to the same oil companies that are siting on Alaska's North Slope gas. They don't want gas from Alaska to compete with their other gas projects in the Asian market, because that would mean lower LNG prices. HOW DUMB ARE WE??? Everywhere else, governments build pipelines and electrical grids and highways----everywhere but Alaska. We have a $40 billion ALASKAN Permanent Fund invested in condos in New York City---anywhere and everywhere but here, where we need infrastructure investment so bad it hurts like a sore tooth. Build the pipeline, offer a product, don't stand around like last year's Beauty Queen, waiting for an offer to dance. Realize that the oil companies are in business to make a profit, not moddle-coddle Alaskans. |













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