Should the state of Alaska build its own natural gas pipeline?
Craig Medred |
Jan 08, 2012
Alaskans who care about jobs and the economic future of the 49th state ought to be more than a little concerned about what Gov. Sean Parnell said last week after privately meeting with the heads of three of the world's largest oil companies before privately meeting with the same oil executives plus select members of the Alaska business community. The picture of the latter meeting that has emerged is of the chief executives of Exxon Mobil Corp., BP and ConocoPhillips pitching business leaders to lobby legislators -- and convince the unwashed masses of Alaskans not allowed into these sorts of shindigs -- to reduce taxes on the oil industry. And out of this tax cut Alaska would get? Well, when Parnell finally met with the media to convey to Alaskans what all had gone on behind closed doors, he said that Exxon Mobil, BP and ConocoPhillips now agree that Asia, not North America, is the place to sell Alaska gas. And he said there could -- hopefully, possibly -- be "alignment'' among the three companies on how to move the gas to Asia. And, oh yes, he said the market will eventually decide what happens. I confess to at the time getting a little caught up in the excitement of the big-wig visit. It was historic. The CEOs of Exxon Mobil, BP and ConocoPhillips had never met in Anchorage before for lunch. Sadly, the hope that this meeting packed special meaning didn't last. I woke up at 3 a.m. the morning after, couldn't get back to sleep, got out of bed, went downstairs and dug out a notebook to review what had been said after the meeting of the century: "This is a private sector project," Parnell said; state government is not going to demand anything; the economics are going to drive the issue. Stop right there. Alaskans should know by now how the economics have been driving a gas pipline. Those economics have been giving Alaska the brush off for almost four decades. If the governor's view is that the market is going to be allowed to decide things on its own yet again, Alaska is once more screwed -- to put things bluntly. ‘Our three companies have to work together’Two visiting oil company CEOs with the courage and manners to meet the media after the private luncheon all but admitted as much. Bob Dudley of BP and James Mulva of ConocoPhillips stressed repeatedly the expense of moving Alaska natural gas to market. That wasn't all they said. “To commercialize large quantities of gas, our three companies would have to work together going forward,” said Dudley. BP's CEO might almost have been too honest. He also discussed options to LNG that might still warrant consideration given the high cost of building an Alaska natural gas pipeline and LNG facility. It became clear later that the message that was suppose to be delivered after the private meetings was that everyone was working toward a gas pipeline and an LNG plant to prepare gas for shipment to Asia, no matter how much gas is coming on or near-to-coming-on the market already. Mulva stuck firmly to the script and blew smoke at the assembled reporters. "What we see is a strong, good Asian Pacific market and that's where we think Alaska gas should go," he said. There were a lot of reporters on hand to faithfully write down his words. But let's go back to what Parnell said about letting the market drive this development. For the market to work in this case, three or four fierce competitors (Chevron has a piece of this action, too, though it wasn't at the Anchorage meeting) need to agree on a plan for transporting gas some 700 to 800 miles from the North Slope to a port somewhere, and then come up with a financing plan for such a project that makes economic sense for each company individually. Now let's pause right there to consider a few, basic facts the average Alaskan needs to keep in mind about these oil companies and Royal Dutch Shell, another industry heavyweight poised to be become a big player in Alaska gas and oil.
by AKgasman | January 13, 2012 - 5:01pm
Should Medred be run out of Alaska ?? \ Halcro says the State of Alaska was flat broke. No, it wasn't! We had a surplus, a very healthy surplus. Most of what Halcro peddles are lies. 52 years ago I was collecting debits Andrew's father car rental business owed and Andrew now owns. I was here Halcro wasn't. There is not going to be a gasline off of the North Slope nor should there be a gasline off the North Slope. A gasline off the North Slope is not in the best interest of The State of Alaska nor the the North Slope oil producers.
by sninky | January 10, 2012 - 7:35pm
yak..yak..yak..talks..cheap,,shelf..ur...greed..and..build..the..thing..people,,the..state,,and..country..need..it..,,yesterday!!!!
by jimbehlke | January 10, 2012 - 2:03pm
The discussion here makes me wonder, what about the concept of an elected official who would exclusively focus on these energy issues? What would this person do? What would be this person's oversight? Article VIII, section 1 or our State's constitution: "Section 1. Statement of Policy Our State elected officials, including governors, may get excessively lobbied and lose touch with Article VIII, section 1 from time to time. Perhaps we need to elect someone with constitutional oversight of this single item. That would require a constitutional amendment which usually would be introduced by a legislator. For example, legislators have introduced constitutional amendment legislation for an elected attorney general perhaps 30 times since statehood-- that idea was gaining some traction a couple years ago. Do we need a natural resources czar who is independent of the legislative and executive branches?
by bluesriff | January 10, 2012 - 2:33pm
Not a bad idea Jim. One that doesn't define "in the best interests of it's people" soley by how many dollars go into the State coffers. One that answers only to the people of Alaska and is not swayed by political trade winds and lobbyists. Like Buddy Holly said. "That................" ;^)
by jmacinak | January 10, 2012 - 4:20am
Yes we should cause to be built a "in-state gasline delivery infrastructure"..it should be called "VITAL infrastructure" during any SERIOUS debate (we should be so lucky) in Juneau about building our own gas delivery infrastructure. Craig. We VOTED to do it in 2002 creating ANGDA. It is incumbent on the state to build it per the intentions of our state constitution. It is not incumbent on the state to suffer while waiting for another legal corporate "person" to bleed us dry before we are ALLOWED to build that infrastructure for ourselves! That infrastructure should not have to be held hostage by corporate interests and their lobbyists and the unending money that feeds their agenda. Where are Alaska`s statesmen? There certainly seem to be NONE in the state house of representatives. http://www.juneauempire.com/stories/102807/let_20071028011.shtml
by jimbehlke | January 9, 2012 - 4:19pm
Quote from a former Governor: "The bid, by Sinopec, bothered me. There was little doubt that the company could muster the manpower, technology, and funding necessary to do the job." (In other words, perhaps Sinopec could have built a pipeline from the North Slope to Valdez sans any need for State funding and then they could have shipped LNG to Asia). Another quote: "An energy-thirsty Communist nation controlling Alaska's natural gas reserves was not in the best interests of the state or our country." Who says? I think Alaska should have moved forward with the proposal, especially if we thought Sinopec was serious, and then let our federal government do its job and decide if this was in our national interest. Now, a few years later, we are back at the drawing board but now considering spending billions or tens of billions of our State treasury to ship LNG to Asia, perhaps to the same places where Sinopec would have shipped as they had earlier proposed.
by 21stCentury | January 9, 2012 - 6:31pm
Nope, we don't need Sinopec muddling around in Alaska.. It seems everybody has been brainwashed into thinking that the task of building a 5bcfd gasline to Valdez-ski is a huge megaproject far beyond the abilities of a few small-midsize Alaskan construction companies.. Yes, we can get fancy and hire a bunch of extra people to add lots of fancy fun frills to the project.. Take time to review all the links I added in my other comment in this article.. Most of the work building 21stCentury polymer-pipelines is not out in the field, the bulk of the jobs will be in Anchorage and Fairbanks building polyolefin industries, and all those things you thought would come only after you had Godzilla or SantaClaus build your goofy mega-pipedream for you...
by jimbehlke | January 10, 2012 - 12:58pm
I have been reading your stuff and you have a lot to add to the discussion-- much more than I do. I think you are very smart and your research is phenomenal. Thank you. But why aren't they doing what you advocate? How do we get from ideas to tangible reality? Apparently government isn't listening. Nor are businesses. How would we take the next step and deploy your ideas? Who will do that and how? I think you need to do it.
by 21stCentury | January 10, 2012 - 4:58pm
Can I tele-commute to work ?? (;-P) ..if you don't have $100mil to do propane-polypipe, start by getting a web-domain address and build a website. [ more fun than poking Godzilla in the eye with a sharp stick ] http://www.the-get.com/ http://peswiki.com/index.php/Directory Split Wood Not Atoms !! >> The Renda is on the radio, it needs a 40'x40' hovercraft-hoverbarge strapped to it's nose, vertical mounted small jet-engine on hoverbarge, hot-thrust downward, this breaks up ice like a blender at -15F.
by common-sense | January 9, 2012 - 11:51am
I thought it was unfounded when people brought up the idea of an "Alaska Oil Company", but now that does not seem like such a impossible idea or even a bad one. Obviously we cannot "Nationalize" the big oil companies as that is something dictatorships do, but creating an "Alaska Oil Company" which could compete with big oil in Alaska in a manner and method they understand would be something special. I think the environmental groups would love an "Alaska Oil Co" far more than they do today's big oil. I think we could checkerboard Alaska lease sales with Alaska retaining every other square mile for our "Alaska Oil Company." I think Asia, Canada and America would be talking to Alaska on a regular basis in regard to pipelines, trade and working together. I think our Legislature would be more than happy to make new oil exploration and production rules favoring long term Alaska investment as the big oils whining Lobby's would fall on deaf ears. I think...this is something to think about
by ragnarock | January 10, 2012 - 11:24am
you are right, this idea is long overdue,unfortunatly Alaska has ben held hostage by politicians and industry people with no imagination and a need to stick to old methods of doing business, in fact if the oil and gas really does belong to the state and its people than BP, Exxon and the others should only be considderd contractors who bid on the job of extracting our oil that we sell on the open market to whoever we want,. In the beggining of the post construction production era on the north slope some things were done in a way that provided maximunm benefit to Alaska and Alaskans, but over the years that was allowed to slowly mutate into what we have now, in 1977 nearly, 100%of the employees of the oporating companies on the north slope were resedents of Alaska, (now days the majors have as high as 40% non resedent employees),.they worked 1 week on 1 week off the hourly pay/annual income was better than that of contractors but many of the contract employees would not even apply for the jobs because of the schedual, they worked 2 weeks on 2 weeks off or 4 weeks on 2 weeks off, the way to move up in thoes companies was to never go home, after bill Allen and Veco became a larger presence with his form of political influence manipulation the majors and their contractors started to beleve they no longer needed the suport of Alaskan resedents whos legeslators Allen was buying,.When the facilities were built in the 70's they were built with blinded flanges labled "to comercial gas facility"so getting the gas to market has always ben in some form of plans but greed and politics got in the way,.Another question that needs to get some air is,. Why do we not just send the gas down the line with the oil and have seperation facilities in fairbanks and valdeze, it comes up with the oil to begin with thoes facilities would be far less expensive than a whole new line and would garentee an oporotunity for alaskans to access the gas for our use
by 21stCentury | January 10, 2012 - 3:46pm
ragnarock: "Why do we not just send the gas down the TAPS line with the oil ???" A: Fred Dyson proposed this idea again recently.. BigOil has already thought about this gassy-crude strategy, but the temptation is to use it as a scam.. .. ..~~>>!! It's all about calculated risk, and pipe engineers should keep losing sleep staying hyper-vigilant while constantly thinking about the safety of that goofy old pipe. The metallurgy, electro-chemistry, and physics are very complex.. as complex as the science behind HAARP nearby in Gakona. TAPS was originally licensed by FERC to ship only a thick hi-viscosity heated crudeoil product that when chilled to +45F it will become a semi-solid the consistency of stiff-gooey roofing-tar with minimal sticky adhesion, and this product was to be hauled in tanker-ships fitted with steam-coils used to heat the product for discharge at destination.. [I once held some of the actual FERC samples in my hand]. We knew it was a matter of "when" not "if" a stuportanker would run onto the rocks, and the cold-crude was supposed to be easy to capture off the water with a treebranch. The CHEAToil flowing through TAPS has been a risky gamble for decades. There is already way too much butane and other gases blended in the CHEAToil. BigOil loves this Amalgamated Unobtainium CHEAToil because they can shave off EZ-profits from this product when it reaches the refineries. --putting all your oil&gas into one pipe is like putting all your eggs in one basket, or packing 10 pounds of poop into a 5 pound bag. I have already shot a hole into a section of TAPS with a hi-powered rifle and fancy bullets, it was a 10' long offcut-chunk of NipponSteel 48" pipe.. we hauled it out of the pipeyard in Fairbanks to a gravel pit.. this little exercise really helps to visualize pipe-dynamics. We built a bunch of 48" C-clamps with a copper-cone bullethole plug, (steel&copper, upgraded to aluminum and bronze) but these got lost in the shuffle.. long since forgotten. If you want to move liquid C2-to-C8 down TAPS it's a little bit safer to send it separately scheduled between pipe-pigs during internal photo-inspections. The light-alkanes will clean the interior of TAPS so cameras can get a good look at it... I suspect TransCanada would begin construction of the AGIA-pipe in Edmonton, then by the time that steel-megapipe reaches across Alaska-border to Deltana "an unfortunate accident" will happen to the southern section of TAPS, then the BigShots will proudly trot out one of their "genius engineers" and proclaim that the AGIA-pipeline can now become a multipurpose gas&oil pipeline which will be connected to the northern half of TAPS. Do you want Alaska to be more like Norway ?? Just start with a $100million propane-in-polypipe to railbelt, the cashflow/gasflow from this pipe will pay for the buildout of the rest of Alaska's hydrocarbon industry/infrastructure..
by 21stCentury | January 10, 2012 - 1:33am
http://katallaproject.tripod.com/index.html http://en.wikipedia.org/wiki/Katalla,_Alaska I used to have a hat with "Katalla Oil" logo sewed into it.. http://www.veteranstoday.com/2012/01/09/the-gasoline-export-scam/?utm_source=rss&utm_medium=rss&utm_campaign=the-gasoline-export-scam
by coyote1959 | January 9, 2012 - 10:40am
In a truly "competitive" market economy, the only real solution to any of this is the "nationalization" of U.S. oil. If the main "competitors" are all National Oil Companies, the true competition would come from our own, U.S. Oil Corporation. Thus, the revenue would benefit ALL of the population of the country instead of the upper class few. Taxing would no longer be a problem since the nation would own it all. EXXON and the rest of the American oil companies are nothing more than the reconfigured Standard Oil Trust of John D. Rockefeller allowed to continue the looting of the nation of its resources and its dollars to feed the Texas inheritors of the old Robber Baron monopolistic operations. Time to jettison the 19th Century Robber Baron economic philosophies reincarnated in the "trickle-down" ideology of subservience to the dictates of the Super Class. All of which is nothing more than the indentured servitude of all for the benefit of the few.
by kenryan | January 9, 2012 - 10:01am
At one point Medred says this: "Murkowski’s tax was already providing more than enough money to cover the costs of running 90 percent of state government. State revenue officials calculate that ACES brought in a surplus $15 billion between 2007 and 2011." To refer to any amount over the cost of running government as "surplus" implies some sort of relationship between the cost of running state government and the tax rate we levy on producers. Let's be clear: any such relationship completely defies logic. While a strong argument can be made for keeping state expenses in line with state revenues, there is no logical argument that state revenues derived from the sale of state assets should be curtailed once they exceed state expenses. Despite their incessant whining, oil companies have amassed and continue to amass huge profits from their Alaskan operations. But they will never be satisfied. Even if they succeed in getting taxes slashed, they will continue to look for ways to boost profits. One obvious way they do this, one that we have seen many times over the years, is by cutting back on maintenance. Not too long after Exxon oil ruined much of Prince William Sound, bumper stickers started popping up that proclaimed "They Are Us." No, they are not us and we are not them. Just as it is the job of the corporate CEO to maximize corporate profits, so is it the job of the state legislator to maximize state revenues and to ensure adequate regulation. To view the relationship between the oil companies and the state as anything other than adversarial is to begin from a flawed premise.
by jmacinak | January 9, 2012 - 1:21am
..Thanks Dispatch, for allowing fair debate and a forum for any Alaskan to have a say, with an accommodating editorial policy for it`s readers and commentators. Maybe someday a kid will ride by my home here, like I used to do in other towns, and "porch" a dispatch to the front step. It would be nice to have a little media competition in the sidewalk news racks. I made better money shinin` shoes in the city though, when I was a kid. Many a time I shined the same shoes outside a bar twice. Once they go in sober, wanting to impress the ever present ladies, and once comin` out staggerin`,blind, drunk with barely a dime for a shine.. wanting to ease their bruised self-respect. (It was hard for a young waif to see "who was who" at night outside the bar...if you know what I`m saying). Just tossing that in. Thanks again Dispatch
by jmacinak | January 9, 2012 - 1:03am
..I think this is about where Bill Walker needs to come riding into this little western movie town to run for Sheriff. Maybe we can get the state to pay for THAT movie! How long will we have to put up with being told how, when, where, and why we will get any of our own gas to market, and how much we have to give up to this extortion behind closed doors in order to even begin gettin a project with buyers and sellers on the table for all to see.! Two more years? of trying to hold back an ex-lobbyist Governor and state legislative house? full of industry lobbyist-wanna-bee`s and graft takers? from extorting away our fair (finally!!) fiscal share of our own resources. What was it... record profits in a recession, continuing quarter over quarter, and let`s see..over 24 billion bucks worth of oil taken out of Alaska each year, and we, the "owners" and "leasers" of the resources under our state constitution, are taking 7 billion of that 24 billion a year. That`s not 50% or 80% as is portrayed by spin and PR. That`s less than 30% for us, the owners! The CARTEL on the slope take the rest, and have written off (paid for!!) the TAPS line five times over since it started flowing! I think those figures are pretty close to what has been published previously as near as I can remember. If these oil "men" (I prefer "swindlers" myself) convinced their "Hand-Picked little downtown Soiree` Invitees", to lobby the state government in Juneau (ON OUR BEHALF THEY ARE CLAIMING?????), they`d better come with facts this time and not lies and misrepresented conclusions from reports and studies that actually indicated other than what was being presented before the peoples duly elected representatives. This old Alaskan is fine with a tax cut deal based on tit for tat. A progressive tax break for every added barrel that ACTUALLY goes down the TAPS line and NO SOONER!!! (that will spur these guys to get off their asses and get to work on a gasline), and so much tax cuts for every million btu`s that go down the finished gasline to VALDEZ and Southcentral and Fairbanks and Nome and Bethel and all the rest along the line who are waiting for this greedy bunch to get working and do what they were lawfully bound to do under their leases.. They have proved time and time again they cannot be trusted in their dealing with the state, without contractual milestones and guidelines (within reason and agreed to beforehand..). The latest evidence of that being from Judge Gleason`s tax case. AGIA has similar milestones built into it for JUST THAT REASON. Like any good contract between parties should be. The state is already in a way an equity partner under the terms of AGIA, in any in-state gasline to tidewater thanks to Harold Heinz and his hard working ANGDA team. ANGDA is a first-in-line committed customer to buy low-tariff, DISCOUNTED gas from the Valdez line for in-state users, and all the good that portends for speedy and healthy economic development. I`m miffed also at this apparent political hi-jinx that means nothing but "we want MORE record profits, up front, and we`ll continue to...do whatever we damned well please on our leases. Good luck selling a pig in a poke to Alaskans again Mr Knowles. Your not selling this old timer. ELF was enough of a theft of our fair share that lost billions in value to Alaskans through corruption, bribery, and influence pedaling. This is ELF DEJA-VU. Fool me twice well shame on me.. ain`t that how it goes fellow Alaskans?
by bluesriff | January 9, 2012 - 12:50am
I would like to make two points, as briefly as possible, that involve changing our approach and outdated way of thinking about how to solve “the other half of Alaska’s” energy needs. The first misconception we operate under is that Anchorage is the population center and thus has all the legislative power. This has been the case over the years on many decisions, and I feel it has played a major role in more not being done to address the Interior and Rural Alaskan’s energy problems. It is time for “the other half of Alaska” to formally caucus together to get us back on track to immediately resolve this energy issue once and for all. There were 138,000 Alaskans that voted to do this in 2002. Some quick math the other day shows that the combined population of Anchorage, Wasilla, Palmer, Kenai, and Juneau is around 340,000. I picked these locations because of their access to cheap energy. That is less than half of the 710,231 that live in the state. I would hope to think that there would be a few representatives in the Mat-Su districts that would provide support. There is a second 40 year old misconception that is obstructing our ability to plan and make logical decisions. We are all guilty of assuming that since we built one pipeline a certain way we will have to build another one the same way using the same materials, methods, and technology. How logical is that? In the seventies, when TAPS was started, no one had a desktop computer or cell phone. You cannot simply assign a cost based on TAPS and adjust it to 2012 dollars. There are new materials, equipment, and technologies that are available today that we have simply not considered when determining project costs. But, it is the method or logistics that I would like to focus on, and more importantly the fact that, we need energy now not 20 years from now. The biggest objection people have to the project is the cost. Here is an idea that would 1) lower overall construction costs, 2) provide immediate customers that will defer costs, 3) provide added revenue to the state, 4) most importantly it would provide relief to the maximum number of families in the shortest time frame. We need to trench in a 6”-8” “temporary” propane poly pipeline from the North Slope to Fairbanks. Every fifty miles, or according to logistical needs there should be a fueling site for equipment. At the Yukon Bridge there should be a large off take station and facilities where barges can transport LPG to all of the villages along our major river systems. ANGDA has completed extensive studies that point to propane as being the most economically feasible way to get affordable energy to remote villages. At Livengood, International Tower Hills Mine could use the propane to start operations that will employ 400-500 people. Their initial tests indicate they will produce more gold than Ft. Knox near Fairbanks, who has recently surpassed the 5.5 million ounce mark. They have not started operations because of the lack of viable energy in the area and employee housing. A huge portion of the costs for the larger pipeline project will involve fuel for equipment and facilities and the labor and transportation costs associated with moving that fuel over long distances. Why haul diesel that is only produced in Kenai, hundreds of miles when your equipment could be running off of propane and you could have fuel practically at the work site. The second part of the plan, which involves building a polypipe manufacturing facility, would lower project costs even further, and it would lower delivered fuel costs and our ability to build the infrastructure that is needed. Propane would be used for the feed stocks of the plant and for operations. We can manufacture all of the pipe needed to build the Alaska Gas Line instead of importing it from outside of the State. This would create many long term jobs and value added products from our natural resources. After Alaska has satisfied its need for polypipe, which initially will be huge, we can then manufacture and export polypipe on empty backhaul ships leaving the State. Fairbanks has some of the highest energy costs in the Nation. There are about 100,000 people in the North Star Borough that would benefit from cheaper fuel both for home heating and it would help lower electrical costs which are at 23.5 cents per kwh. Currently the local electrical coop is planning to truck propane in which will provide little savings to customers. Yes the villages are higher in cost, but the State subsidizes their electrical usage. For many people in Fairbanks, their monthly utilities exceed their mortgage payments. If this smaller propane line were to be made more permanent, the State of Alaska could realize major savings on DOT maintenance costs along the haul road. By transitioning equipment and facilities over to propane use, they could use the original fuel take off points that were put in for the propane pipe line construction. The Dalton Highway or Haul Road is a vital link for supporting North Slope oil production and what will hopefully be gas production in the near future. This highway will continue to play a major role in resource development, which there will be more of, when an economical fuel source is in place. DT deserves all of the credit for these ideas.
by ragnarock | January 10, 2012 - 11:32am
the next governor will either adress energy needs throughout Alaska if he has any imagination And actualy cares about the state of Alaska and its peoplewe have more ways of generating powere in Alaska than any other place on earth we just need imaginitave leadership that is in place for Alaska's best interest
by 21stCentury | January 9, 2012 - 5:37pm
http://s281.photobucket.com/albums/kk209/DistantThunderbolt/?action=view¤t=6inchgaslineP2FBX.jpg http://www.youtube.com/watch?v=_5mbNp43BxQ http://www.performancepipe.com/en-us/gd/Pages/default.aspx https://gas4alaska.info/Propane.html http://s281.photobucket.com/albums/kk209/DistantThunderbolt/?start=all http://www.youtube.com/watch?v=IDd2QAjrlK0 http://www.youtube.com/watch?v=gHyJq2kMrKc www.youtube.com/watch?v=-vZNdHXgJo4 www.youtube.com/watch?v=WaB-dsB1Kfk http://newsminer.com/pages/full_story/push?discussion-building+our+own+gas+pipeline%20&id=5333308 http://www.permapipe.com/web/products.aspx?ProductID=191 http://s281.photobucket.com/albums/kk209/DistantThunderbolt/?action=view¤t=CryogenicGasline1.jpg http://www.youtube.com/watch?v=aK-P2rsSQ44 http://www.youtube.com/watch?v=dvACfxXBu_M ..
by Oldhaines | January 8, 2012 - 10:32pm
Nice to see you woke up and got a whiff of the coffee! Just last week you sounded like Exxon's latest "Gusher". BTW; This is one of the best (including accuracy) articles I have seen from you. |













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