Single Page
Importing LNG: 'That's just the way it is'Southcentral utilities are working on a plan to begin importing liquefied natural gas by 2014, a measure they have now determined is necessary and a "high priority." In a presentation this week to the Regulatory Commission of Alaska, members of the Long Term Gas Supply Work Group said nothing can prevent the state with one of the largest untapped supplies of natural gas in the world from importing gas to provide heat and electricity for the state's most populous region. "Our only option to solve with certainty our gas supply needs is through the importation of LNG and we see no way around that," Dan Helmick, manager of regulatory affairs for Anchorage Municipal Light & Power, told the commission Wednesday. "Whether we like it or not, the conclusion we come to is that's just the way it is." The working group is made up of ML&P, Enstar, Chugach Electric Association, Matanuska Electric Association, Homer Electric Association and Donlin Creek, a proposed mining operation. The Railbelt utilities, along with the Alaska Natural Gas Development Authority, have been warning for years that importing LNG is a real possibility, even if it is politically divisive. Now, the possibility has become reality. The group believes there will be a shortfall in natural gas in 2014. No North Slope gas line -- whether in-state or spur line from a big gas line to Canada -- can be built that quickly. A Susitna Dam hydro project isn't expected to be operating before 2022 at the earliest. "Inaction at this point in time is just simply not an option for the utilities anymore," Helmick said. Helmick said the commission, which will ultimately have to approve the cost of power generated by imported LNG, needs to have a "very, very clear understanding that this is a high priority matter." "The take away is that we think 2014 is the number and that's what we better be working for," he said. "And there's no silver bullet." Decisions need to be made soon. The utilities will need to start the permitting process with the Federal Energy Regulatory Commission and the state, and, Helmick said, "there will be a lot of engineering studies that have to be done and they require investment decisions this year." The group envisions buying LNG on the global market and bringing it in on tankers to Cook Inlet. The ships might need to be "ice hardened" to get in during the winter, when the demand for gas is the highest. Dock facilities will be needed as well as re-gasification facilities that could either be on shore or ship-based. The Southcentral market is small, which means fewer customers to share the cost, a situation that Helmick called a "regulatory and ratemaking challenge." The volume needed to meet customer demand will be low at first, but would ramp up by 2018 when the Donlin Creek mine is anticipated to come on line, he said. Cost of importing LNG substantial -- for utilities, consumersHelmick also cautioned that officials don't know how long they'll need to import LNG. "We may need it four years, we may need it 30 years," he said, adding that will be a factor influencing "how we approach recovering and dealing with the costs associated with this." Either way the cost to the utilities as well as the consumers is going to be substantial. "It's going to require a significant financial undertaking," Helmick said. Making sure consumers continue to have reliable power is the top priority for the utilities. "We may end up paying more for something than we otherwise wouldlike to, but we just don't have certain luxuries," Helmick said. Despite warnings in recent months that LNG importation was looming, the commission took the news with some trepidation. Chairman Robert Pickett said he had a "knot in my gut" mainly due to the timing -- or lack of time to put it together. Three years -- the 2014 deadline -- is barely enough time for the state to build a five-mile gravel road, he said, let alone a completely new system to deliver gas to hundreds of thousands of consumers.
So here we are, geniuses, importing LNG instead of selling it! Oh, this IS rich! All the members of the Alaska Legislature take a bow! You, too, Palin and Parnell and all the other cretins responsible for this situation. You should ALL be proud! Licking the boots of your oil company masters has already cost consumers more for energy than their mortgages, and now, it will take many homes straight into FORECLOSURE. I hope you are PROUD of how you have MISMANAGED everything related to energy and energy resources in this state for more than THREE DECADES. It has to be an American record for complete, utter, asinine dereliction of public duty. People may just be standing around right now trying to take in the view, but as soon as the piper has to be paid it will be glaringly apparent who is to blame for this disgusting debacle. The RCA should have seen this coming a LONG time ago and taken appropriate action to kick the politicians in the rump. to separate Cook Inlet from the rest of Alaska as though finding a bit more gas there will solve this state`s energy crisis is a misleading enterprise. The gas we need to get to is on the North slope of our state, with Exxon sitting on it, warehousing it. The two LARGEST CONVENTIONAL GAS BASINS on the North American continent are on Alaska`s north slope. Enstar and it`s parent, Encana, don`t give a hoot about anything but the price they will be able to squeeze out of south central Alaskans while the others in this state keep taking donations of heating oil from the Hugo Chavez-owned "CITGO" in Venezuela!! Insane in this resource rich state. I wonder how big Parnell smiles when he accepts charity for Alaskans from a socialist dictator? If his thoughts are on his Exxon stock, it`s probably a big smile. We need to get rid of Parnell. He has never stopped working for Conoco as a lobbyist. Somebody better call Bill Walker and tell him we need him to run again. Parnell was all for ACES when he was "under" Palin, and when he was running for governor! PRAISING ACES IN EMAILS TO PALIN! ...yet, as soon as he gets elected, the old switcheroo takes place. He ran on fraudulent positions that supported ACES. His allegiances are obvious by these, and other actions he took. (violating article 30 section 5 of the state constitution by offering cushy jobs with great retirements to SITTING KEY LEGISLATORS who have since shamefully, and thankfully, left the public eye.. Who will benefit from delay of any in-state gas production for our own people? The importers and marketers of this imported LNG? The slope conglomerate who certainly are not in a hurry to bring Alaska gas off the slope in ANY manner? Is this is how a "free market" works in Alaska? Deny product, raise prices, ..and limit supply in winters to keep prices high? That should sound familiar to those Alaskans who follow what Exxon did to keep Pt. Thomson gas liquids and oil off the market. And why the state was forced to take legal action to force Exxon to perform as per it`s leases in our state. If it doesn`t want to produce in Alaska, then get out and let a hungrier company partner with us Alaskans to develop the oil and gas infrastructure we have been clammoring for for at least ten years and longer. The Pt. Thomson court fight is a fight over Alaska`s sovereignty. We have a right to enforce reasonable lease expectations. When we don`t, we are no longer a free state in this Union. All we are asking Exxon to do, is do what they said they would do in their leases, if they found oil or gas in marketable and sufficient quantities. The technology is there to pull out the massive heavy oil deposits now. The spread between light and heavy oil is historically as tight as it`s ever been because of the growing oil demand. Heavy oil is only slightly less valuable than lighter oil. Yet to listen to Exxon, it`s not worth their attention, as they are happy making just two bucks a barrel over in Iraq and the rest of it`s middle east operations. They make 20 a barrel in Alaska, but that isn`t enough... it boggles this Alaskans mind why we have let this company hog-tie Alaska all these years over a gasline. I guess it helps when you own the legislature`s most powerful politicians. http://www.juneauempire.com/stories/102807/let_20071028011.shtml Good story. Mr. Rose is right. The huge renewable potential in Cook Inlet guarantees a zero cost fuel source, but the front end capital costs are high. They get amortized over time, just like a hydro dam, so the actual costs are pretty low. Future costs of coal, oil or gas cannot be predicted, except that the general trend is up. The proposed bullet line from the North Slope could cost ratepayers up to twice as much as imported LNG. One company could control the supply, transportation, distribution and sale of the gas. It's a dangerous combination of monopoly and extremely high prices to consumers. Fortunately the Bullet Line doesn't pass the economic red-face test. At least the importation of LNG can fluctuate with our needs. The other potential that was not mentioned in the story are the huge amounts of gas in the smaller fields of Cook Inlet that have not been tapped yet. Oil and gas companies complain that a "captive market" doesn't allow their corporate HQ to move ahead with a project because it's not "profitable enough." However, Alaskans still own the gas onshore and in state waters. The state could simply subcontract the exploration and development of Cook Inlet gas to one of the existing companies or an independent. The gas could then be made available at cost to Alaskans, similar to what ML&P has been doing since the 1990's. They joined an exploration for their own gas supply and now have the lowest electric rates in the railbelt. Just like ML&P, the state's costs would be repaid by ratepayers. The "captive market" and "profitability" problems are removed. Bottom line is that there are many ways to solve our energy problem and it will take a combination of energy efficiency, renewable energy, drilling for new gas and/or importing LNG to make it all work. We have been incredibly lucky to have cheap Cook Inlet gas for many years. Now we will join the rest of the world in paying more for energy. That's just the way it is. I have very simple solution. We will start taxing the producers on the north slope for their gas holdings. Then in a couple of years the money will be used to build the new private pipeline from the North Slope for all the benefit of the Alaskans.If the non producers of the gas do not like it then the state has the right to take the gas leases away for non performance as they are required by contract to produce the resource to the maximum benefit of all alaskans. Three years ago stories were about that showed this was a possibility. Nothing has been done except to appoint a commission which is now running around with it's hair on fire. Good luck all you who heat with nat gas. Your pipe will be empty in three years because this state can't get the job done. The elected officials are too busy cutting taxes. Man, it will be cold winter 2015. This is really sad, and a direct result of the decisions made by voters in 2006 and 2010. You reap what you sow. "Three years -- the 2014 deadline -- is barely enough time for the state to build a five-mile gravel road, he said, let alone a completely new system to deliver gas to hundreds of thousands of consumers." We`d better get cracking on this then, until they find a way to get some gas liquids (ethanes/propanes C5 etc) down the oil pipeline...say the stuff from Pt. Thomson.. First we need to elect a little higher-visioned Governor who puts Alaskan`s future generation`s economic health ahead of oil company record profits in a recession, as this current governor has done on more than a couple of occasions, in my opinion. If Bill Walker runs again, we`d better not let that chance to elect him slip away again. We don`t need another oil industry lobbyist running things from such an important and vital branch of government, with the ability to delay changes, like modernizing and updating state oil tax recording and monitoring from analog cardboard boxes to digital and computerized operations that are well meshed. And like failing to fund fully ANGDA, the agency created to get gas to Alaskans in the best, quickest and most efficient and economical means. That was the all-Alaska plan we (138,000 of us) voted to study and report on by a date certain. It cannot do that if the governor cuts funding for ANGDA. this is so completly ridiculous I cannot believe it... we have so much natural gas right here in Alaska and instead of using it we are going to import it ...we need new leadership in this state... maybe some folks who dont have their head up some one else A** frustrating to think this is the path they will take and we will continue to be forced to pay heating bills that are triple waht they should be... |
Comments