Exxon Mobil, Conoco, BP explore Alaska LNG export project
Alex DeMarban |
Jan 05, 2012
Did Alaska Gov. Sean Parnell channel his predecessor, Sarah Palin, Thursday? He did, after all, use a sports metaphor to break down complicated stuff: his effort to unite the state's big three oil companies around the idea of building a long-sought, multi-billion-dollar natural gas pipeline down the middle of Alaska.
Like many Americans, Parnell watched football on Jan. 2. And the lesson he learned was simple: You need players on the field who can get the job done. So Parnell called together the chief executives of some of the world's most powerful companies for an unusual high-level meeting in his downtown Anchorage office.
During that meeting, he encouraged Exxon Mobil Corp., BP, and ConocoPhillips to work together to consider the feasibility of a pipeline hundreds of miles long to deliver natural gas from the North Slope to Southcentral Alaska. There, perhaps in Valdez, Nikiski, or at Port Mackenzie in the Matanuska-Susitna Borough, a facility could be built to super-chill the gas, turn it into a liquid, and ship it in tankers to growing markets in countries like Japan, India and elsewhere in Asia.
As Parnell and the companies see it, all this would happen under the Alaska Gasline Inducement Act, which includes a $500 million state subsidy to help jump-start the massive project. For more than two years, pipeline builder TransCanada Corp. and Exxon Mobil have worked under that act, spending about $200 million to plan a gasline from the North Slope to Alberta, Canada, that would deliver gas to the Lower 48.
But in late October, Parnell switched gears and announced that a pipeline to deliver gas to the Lower 48 was no longer a good idea. Noting that the contiguous U.S. would be awash in natural gas because of new shale-extraction technology, he said he wanted to see the state's Big Three oil producers work together on a line that takes Alaska's gas west across the Pacific.
Route to Lower 48 not competitive
Oil executives visit Anchorage
Jan 05, 2012
BP CEO Bob Dudley addresses the media following a meeting with Alaska Gov. Sean Parnell at the Dena'ina Convention Center in Anchorage on Jan. 5, 2012.
Stephen Nowers photo
Oil executives visit Anchorage
Jan 05, 2012
A reporter photographs BP CEO Robert Dudley during a press conference on January 5, 2012.
Stephen Nowers photo
Oil executives visit Anchorage
Jan 05, 2012
Members of the Alaska media surround BP CEO Robert Dudley during a short press conference. Dudley, ExxonMobil CEO Rex Tillerson, ConocoPhillips CEO Jim Mulva, and Alaska Governor Sean Parnell were attending an invite-only reception at the Dena'ina...
Stephen Nowers photo
Oil executives visit Anchorage
Jan 05, 2012
Alaska Gov. Sean Parnell listens to a reporter's question during a press conference at the Dena'ina Center on Thursday.
Stephen Nowers photo
Oil executives visit Anchorage
Jan 05, 2012
Alaska Governor Sean Parnell talks to the media during a short press conference after an invitation-only reception with the CEOs from ExxonMobil, ConocoPhillips, and BP.
Stephen Nowers photo
Oil executives visit Anchorage
Jan 05, 2012
ConocoPhillips executives, including CEO Jim Mulva, second from right, and ConocoPhillips Alaska PresidentTrond‐Erik Johansen, far right, wait for Alaska Gov. Sean Parnell to finish his press conference. Mulva also spoke to reporters, as did BP CEO...
Stephen Nowers photo
Oil executives visit Anchorage
Jan 05, 2012
ConocoPhillips CEO Jim Mulva speaks to reporters about Thursday's announcement.
Stephen Nowers photo
Oil executives visit Anchorage
Jan 05, 2012
From left: BP CEO Robert Dudley, ConocoPhillips CEO Jim Mulva, Alaska Governor Sean Parnell, and ExxonMobil CEO Rex Tillerson met Thursday in Anchorage.
That's what Thursday's meeting -- followed by an invitation-only luncheon involving the CEOs, the governor and Alaska's movers and shakers -- was about. The issue's a massive one for Alaska, because oil production from the North Slope is dwindling, and the state needs another long-term resource revenue stream to replace it. Alaskans have tried to build a gasline since the 1970s, but proposal after proposal has failed -- in part because of the project's enormous costs. Because the North Slope is home to the largest conventional gas resource in North America, a pipeline could produce vast amounts of gas for decades.
But despite the issue's importance, media weren't invited to the governor's meeting or the luncheon, which was thrown by Exxon Mobil or all the oil companies, depending on which company you asked. It was billed as a meet-and-greet but included a speech from the governor and the three top oil chieftains, Rex Tillerson of Exxon Mobil, Bob Dudley of BP and Jim Mulva of ConocoPhillips, audience members said.
Some of the players that might be part of this team spoke with the media after the luncheon, and they seemed sincere about their interest in getting Alaska gas to market. They said the meeting with Parnell was productive, and that the three oil companies would try to work together as a team, studying the feasibility of selling liquefied Alaska gas in Asia and, at Parnell's request, creating timelines for such a project this year.
There was no opportunity for the media to speak with Tillerson, even though that company is considered the star player on "Team Parnell." Exxon Mobil owns the lease rights to most of the gas on the North Slope.
Surrounded by microphones and recorders, Jim Mulva, CEO of ConocoPhillips, echoed Parnell's comments about recent developments in global supply and demand. He called the Asian market the best option for Alaska's natural gas.
"It's certainly far better than the alternative of taking gas in the form of a pipeline to the Lower 48 states. That's just not going to be competitive," Mulva said.
But what about plans by some companies to build liquefaction plants on the West Coast and ship Lower 48 gas to Asia. How can Alaska compete with them if a pipeline is ultimately constructed, say, 10 years from now?
Trust? I dunno, Back in 1973 we trusted Jimmy C. and his greenie friends and look where that got us. These guys have got a different stripe alright, but trust? I dunno.....
Answer to last question-- we are many, many miles closer to Asia. (Suggest you look at a globe now and then.) That means we have less transportation cost and are competitive out of the box.
As for this "never" happening before, it has happened with every Administration I can think of back to Jay Hammond, so where has the author been??
The important point may be that Parnell is awake and realizes he is on the hook for this boondoggle if things don't get turned around. So once again, the stick begins to beat the dog, the dog begins to chase the cat, the cat begins to chase the rat(s)....
If we made the Republican party pay the price of not being re-elected for not moving on the all Alaska gas line, we could move forward on the project. Plain and simple, when they fear no consequences, they will continue to work for the oil companies, and not the people. All it would take is throw a few of the leaders out, and they would get the message. Are the voters up to it? Probably not.
Joe, m'dear, the Governor owes us strict fiduciary obligation in this and every other matter. He cannot continue to WASTE our money on a project that is known and admitted to be uneconomic, so he has to get moving toward something that is real or be keel hauled himself.
That should be motivation enough for Sean Parnell and for the Republican Party as well.
The prudhoe bay producers cannot not even obtain alignment on the needed addtional gas injection and recycling infrastruction that should have been added a decade ago. The hang up is who gets how much additional oil.
Alaska's oil producers seek 'alignment' on selling natural gas to Asia
Alex, that is an out right lie! The producers have never sought alignment since October 30, 1977 on agasline and never would seek alignment on a gasline and your too stupid to understand or ask why.
This article comes off like a complaint by a journalist who feels jilted for not getting an invitation to the party. I'm glad to see the governor bringing all the players to the table in order to further the interests of this state. This event appears to have involved a discussion of how the state and the oil companies can work together to make this project happen. Meetings like this one occur regularly in the legislature. It's what's called an "executive session." Executive sessions are closed to the public because the legislature is formulating a plan that's not yet ready for public dissemination. There's absolutely nothing wrong with this approach. We elected the governor, let him do his job.
It's very difficult to distinguish between the supposedly "ex-oilman" governor and his buddies who have led an industry that has shown little regard for anything but profits.
There's no one in that pack of vultures representing the people.
There were warnings, largely ignored by the press and the legislature, that Governor Palin's intended half-billion dollar giveaway to Transcanada was certainly going to be fruitless.
What Alaska may have done was to subsidize the design work needed to get McKenzie River gas to the tar sands deposits in Alberta.
I wonder if anyone has done a survey on Alaskan's opinion on lowering the oil royalty taxes? It would be interesting to see how close Parnell is to the heartbeat of his constituents.
So, did Gov Parnell, and the big three, explain the EXCEL spreadsheets, presented to the Alaska State Senate last 1/2 session? Do you remember, Governor, those spreadsheets apparently did not compute, and the Senate Finance Committee requested answers, explanations, before voting with you?
I'm looking forward to some additional information from Thursday's "Court". Remember, Greg Palast reminds us, The 7 Sisters becomes Alyeska becomes the Big 3. The Divine Right of Kings !!
When it's all said and done there will be a lot more said than done. Based upon history, that's the safe bet. Even if we reach a deal on the economics, the enviros will tie it up til eternity. Sure like to be wrong but there isn't a lot to be optimistic about.
If the Republicans that were in office in 2002 when we voted for the all Alaska line would have acted, where would we be right now? Building a gas line I would think. And these same Republicans are still in office, not doing what the people voted for. So please pay attention to what is really going on.
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