2-28 (Updates: 07:10, 08:27, 09:36, 10:08 ET):  Northern Gas Pipelines is interested to find that Sen. Tom Daschle, Gov. Tony Knowles, Lt. Gov. Fran Ulmer and Sen. Frank Murkowski presented popular gas pipeline solutions in statements received last night and today, seeming to agree on basic gas pipeline legislative strategy.  We have yet to see a response from most gas leaseholders, economists, investors, consumer and taxpayer groups on the political solution, but with certain federal incentives and guarantees supported by this coalition, project economics are less important than before.  ANWR policy goals are not so enthusiastically shared and remain to be debated.  -dh  

• Daschle solution:  "Democrats have proposed a 2,000 mile long gas pipeline that would create 400,000 jobs, use an estimated 5 million tons of US steel, and ensure that we do not become dependent on imported liquefied natural gas.  If we want to create jobs, increase our energy security, and help the U.S. steel industry, then building this pipeline is the way to do it.  Over the last several weeks, Alaska Governor Tony Knowles and Alaska Lt. Governor Fran Ulmer have both met with me to discuss this important project.  They made several suggestions as to how our legislation could be improved so that it not only meets our national energy goals, but also Alaska's  economic needs.  Specifically, Gov. Knowles and Lt. Governor Ulmer suggested that the bill: 1. mandate that the project follow the "southern route" from Prudhoe Bay to Fairbanks along the TAPS right of way and the Alaska Highway through Alaska and British Columbia to Alberta; 2. provide access to the gas for residential and business purposes in Alaska and access to the pipeline for future discoveries and production of natural gas; and, 3. provide a financial safety net for investors against future volatility in the natural gas market.  I agreed that during Senate consideration of S. 517, the Energy Policy Act, Democrats will offer an amendment to incorporate the State of Alaska's recommendations into the bill.  Energy for America, jobs and opportunity for Alaskans, and no damage to sensitive environmental areas - this is the type of pro-development, pro-jobs, energy project that Congress should be encouraging."  From Daschle's web page: "Our bill reduces our dependence on foreign oil and recognizes that, while production is important, America cannot drill itself out of its energy problems. We must look to new and innovative methods of energy production. Our bill makes balanced investments in the development of numerous renewable energy sources."
• Knowles solution (from 2-26-02 letter to Senator Daschle):  "I deeply appreciate the effort you and your staff made in being available to discuss the upcoming energy bill and the Alaska Highway Natural Gas Line.  ...I request the route be mandated to follow what is called the southern route from Prudhoe Bay to Fairbanks along the TAPS right of way and the Alaska Highway through Alaska and British Columbia to Alberta....  Second, I request there be provisions in the Bill that would provide for access to the gas for residential and business purposes in Alaska and access to the pipeline for future discoveries and production of natural gas....  Third, I request there be provisions that would help attract investment capital to this project by lowering cost and reducing risk.  ...  My Lt. Governor, Fran Ulmer, and I have spent the previous seven years of our administration seeking to commercialize the vast deposits of natural gas on Alaska's North Slope, and we both look forward to working with you now to achieve this result...."
• Ulmer solution (from 2-26-02 letter to Senator Daschle): "Thank you for personally meeting with me when I was in Washington, D.C. to discuss issues of importance to Alaska and the nation....  Oil and gas development provides a large part of the engine for Alaska's economy.  Both ANWR and the natural gas pipeline are key to continued job growth and investment in Alaska....  I know that you are willing to assist us with the necessary federal legislation that will improve the success of the natural gas project.  Thank you for working with Governor Knowles and me to make Alaska's natural gas available to America."
• Murkowski solution: "Many who are taking an interest in the Alaska gas pipeline are failing to recognize that this gas is Alaska's.  Any strategy to move this gas to market must take into account the interests of the owners -- the people of Alaska.  "As I said in my in address to the Alaska Legislature, I have been working with the producers and pipelines to bring everyone to the table.  At a gas line summit I called earlier this year, we identified the hurdles before us and the steps necessary to overcome them.  These efforts are bearing fruit.  But the state must be fully engaged and fully involved. "When the debate on the energy bill starts in the coming days, I will be offering significant amendments to make sure that the development of Alaska gas is done in the most environmentally sensitive way possible and provides the greatest benefit to Alaskans.  "Once and for all, we will resolve the route and mandate a Southern route.  I will work to provide the state with a greater role over in-state gas use so as to maximize the benefits of clean energy for Alaska.  In addition, we must work to assure any future development opportunities and discoveries have access to the pipe so we can maintain vibrant exploration and production program.  "Most importantly, this project is about jobs.  We will provide training for Alaskans and Alaska Natives so that they will be ready to step into the thousands of job opportunities that development and construction will bring.  "Right now, U.S. Senate Democrats want to tell Alaskans what we can and cannot do with our gas.  Their enthusiasm for Alaska gas doesn't reach an attempt to distract and divert efforts to open ANWR.  Genuine proposals would work with Alaska for the benefit of Alaskans. "Alaska's natural gas is one big step toward price stability and reduced foreign energy dependence.  We're ready to do our part to ensure America's energy security.  But Alaskans won't be part of someone's false promises and political posturing.  I urge my colleagues in Alaska to recognize the real scope of the proposals before us."   "We need to see the State a full partner in development efforts.  Without their involvement Alaska's false friends in Washington will further threaten Alaska's interests," said Murkowski.

(See Anchorage Daily News analysis by Liz Ruskin w/contributions from Ben Spiess.)
 

2-27 (Updates: 00:47, 02:15, 10:27, 11:44 ET):  Sale of Alaska North Slope Royalty Gas.  A Canadian reader wrote last evening: "My understanding is that the bids for the state's Royalty In Kind gas are public and available for viewing on the Internet. In fact, I thought the bids could be located on the Northern Gas Pipelines site, but I couldn't find them.  Could you help me or direct me to a place where I could find them?"  Northern Gas Pipelines has provided many original stories and links on this subject, but our faithful reader reminds us that a one-stop-shop should periodically summarize available information, which we do below, with pleasure:
a.  Royalty sale background:
http://www.dnr.state.ak.us/pic/oilsolicitation12262001.cfm

b.  Recent state economic analysis of Alaska gas and NGL royalty value:
http://www.dog.dnr.state.ak.us/oil/products/publications/otherreports/value/ngl_value_study.pdf

c.  Recent in-state gas demand study:
http://www.dog.dnr.state.ak.us/oil/products/publications/otherreports/demand/instate_gas_v1.pdf

d.  Summaries of Royalty gas proposals provided to the state:  Alaska Power & Telephone, Anadarko, Chevron USA, Williams

e.  Here is one Northern Gas Pipelines story with some links, including the Anadarko/AEC bid for downloading:  http://www.arcticgaspipeline.com/2-2002.htm, scrolling down to 2-2/3.  Bid offerings can also be obtained directly from bidders but may be modified to delete confidential data.

News-Miner Washington Bureau by Sam Bishop, WASHINGTON--A reported proposal to seek more votes for oil drilling in the Arctic National Wildlife Refuge by reducing the acreage offered for leasing drew opposition from two members of Alaska's congressional delegation Tuesday.     *     Joseph Mathew, a frequent visitor to Alaska and formerly with the Merchant Energy Group of the El Paso Corporation, has created his own advisory service called Hybrid Energy Advisors, Inc.  Joe sent a note here and to other friends telling of his desire for continued business involvement in the north.  He can be reached at: Joseph P. Mathew, President & CEO - Hybrid Energy Advisors, Inc. - 6601 Kirby Drive - Suite 674 - Houston, TX 77005 - Phone: 713-666-9590 - Email: joseph.mathew@hybrid-advisors.com 

2-26 (Updates: 00:15, 11:14 ET): MERGER UPDATE & NEW MANAGEMENT  CONTACTS ... BARTLESVILLE --- Special meetings of stockholders of both Phillips and Conoco have been called for March 12, when a final vote on the merger will be tallied.  The combined company has significant oil and gas interests on the Alaska North Slope and in the Canadian Arctic.  The merger also remains subject to receipt of necessary regulatory approvals and is expected to be completed in the second half of 2002.  Headquartered in Bartlesville, Phillips has 38,700 employees and $35 billion of assets, and produced $26.9 billion of revenues in 2001.  Conoco is headquartered in Houston, employs 20,000 with $27.9 billion of assets, and $39.5 billion of revenues in 2001.  James J. Mulva (Photo-r), currently chairman and chief executive officer (CEO) of Phillips, will become president and CEO of  ConocoPhillips.  Robert E. McKee III, 55, will become executive vice president, exploration and production (E&P).  Jim W. Nokes, 55, will become executive vice president, refining, marketing, supply and transportation (RMS&T).  John A. Carrig, 50, will become executive vice president, finance, and chief financial officer.  John E. Lowe, 43, will become executive vice president, planning and strategic transactions.  Rick A. Harrington, 57, will become senior vice president, legal, and general counsel.  "The selection process was difficult, given the proven leadership of the top executives of both companies," said Conoco Chairman and CEO Archie W. Dunham (Photo-l), who will serve as chairman of ConocoPhillips.  Mulva said that J. Bryan Whitworth, executive vice president, general counsel and chief administrative officer for Phillips, will serve as executive vice president, reporting to the CEO of ConocoPhillips and will assist with the transition until his retirement.  The companies expect their 'merger of equals' to produce synergies:    "Substantial opportunities for profitable growth; World-class technology, work force and operational practices; Significant opportunity to enhance its exploration portfolio; Diversified earnings and cash flow; A strong balance sheet; Improved capital efficiency; An efficient cost structure."  (Further background on executives.)        *      Northern News Services, by Thorunn Howartt, Yellowknife-It's full steam ahead on a project that will pipe Deh Cho gas southward from the Cameron Hills.  Less than one month after receiving permitting, Calgary-based energy company Paramount Resources Ltd. works against time to tie 17 old wells and nine new wells to an Alberta trunk line. ... The work needs to be completed before the ground thaws, if oil and gas are going to be produced this spring. "The pipeline that we're connecting to is being built in Alberta. So let's say 20 years ago the closest pipeline to Cameron Hills land was several miles away -- in excess of 150 kilometres," said Paramount spokesperson Shirley Maaskant, explaining the distance made the wells at Cameron Hills uneconomical to connect to a pipe system.  But now Alberta exploration is creeping northward and overlapping into the NWT. ... Paramount's permitting obligations require it to give Northerners first crack at Cameron Hills work contracts. The company also has to track its Northern labour component and tell the Department of Indian Affairs and Northern Development in an annual report. One way it's meeting its obligation is with Edmonton's Travers Food Services. That company is joint-ventured with the Ka'a'gee tu First Nation band from Kakisa. They will run four camps in the Cameron Hills during Paramount's construction phase. Kakisa Chief Lloyd Chicot described the camp's joint venture as a warm-up for band members to get ready for future oil and gas development.  "We would like to be a little bit more involved," said Chicot. The band will get a percentage of the camp's profit but would like to see longer-term business ventures in the Cameron Hills, he said....  *     Northern News Services, by Thorunn Howatt, Yellowknife - Northerners will get a chance to say what they think about a Mackenzie Valley pipeline during community consultations organized by the Mackenzie Delta Producers Group and the Aboriginal Pipeline Corporation.  "We are just beginning the process of contacting communities to set up meetings," said spokesperson Hart Searle. "Within the next few weeks we expect to have some meetings put together and scheduled."  .... The community presentations will include maps, and job and business opportunities.     *     Alaska Oil & Gas Reporter, by Tim Bradner-It wasn't what Alaskans wanted to hear, but Houston energy economist Ronald Oligney (Photo, 1-15-02), said the state will be better off in the long run with a more vibrant gas-based industry on the North Slope brought on by a less costly over-the-top pipeline.  (See our earlier story.)

2-25-02 (Updates: 00:03, 02:01,11:09 ET):  See Northern Gas Pipelines' report on the Oil & Gas Track of the recent Pac Com Expo: Oil, Gas & Mining Show & Conference in Anchorage, organized by Rada Jones (Photo).   On our special page, which you may view here, we also provide titles of those who joined Rod Johnson, Consul & Sr. Trade Commissioner, office of the Canadian Consulate General (Seattle) for an informal reception last Thursday evening, during the conference.  We also offer a Pac Com photo gallery featuring speakers, vendors, attendees.     *    CBC, Inuvik, NWT-Demands from the oil and gas industry, which began seismic work last month, and new construction in town are keeping the shops busy and now the little projects are being put aside for the big ones.

2-23/24 (Weekend Updates: Sat. 00:24 ET)-Charged by the Alaska Legislature's Joint Gas Pipelines Committee with developing current economic models of gas pipeline alternatives, Northern Economics Research Associates (NERA) provided a progress report to Committee Chairman John Torgerson this week.  Committee representative Darwin Peterson kindly provided us with a copy.  The report begins, "So far, NERA has reviewed twenty different models, each with different assumptions on routes, size of the through put, costs, etc."  The report goes on to describe 15 variables used in constructing the models and concludes, "If each of the above variables is changed it is possible to obtain more than one-hundred iterations of the model."   (Note: one does not therefore doubt the difficulty producers have encountered in not only developing their own financial models, but in concluding the complex technical engineering and environmental studies that give body and substance to assumptions used in modeling.  -dh)  State economist Roger Marks (Photo, 2-19-02) has already produced a variety of gas pipeline economic models, which we continue to make available to readers in the left column under "Alaska".  Northern Gas Pipelines is pleased to provide readers with your own copy of NERA's progress report.     *     Gov. Tony Knowles (Photo, 9-10-01) will pursue development of a natural gas pipeline and other Alaska issues in discussions with President George W. Bush and other governors during the upcoming winter meeting of the National Governors' Association (NGA) in Washington, D.C., beginning next Saturday, 2-23.  "The NGA meeting offers the opportunity to focus attention on Alaska's potential contributions to national energy security through construction of the Alaska Highway Natural Gas Pipeline, and responsible oil exploration and development in the Arctic National Wildlife Refuge," Knowles said.  He will also meet with the Washington Post's editorial board and participate in a roundtable discussion with Secretary of the Interior Gale Norton and Secretary of Agriculture Ann Veneman.

2-22 (Updates 01:15, 02:28, 11:35, 12:15, 17:04 ET):  From Northern News Services (Subscription)-Fort Simpson, by Derek Neary - Shane Parrish says the Deh Cho First Nations must decide how it can work with industry on a Mackenzie Valley pipeline before they miss out completely. Parrish, CEO of the Acho Dene Koe Group of Companies, made it clear to Imperial Oil's Joanne Nutter that Fort Liard wants to employ its companies in the land and environmental aspects of the pipeline project as well as any other possible employment and training. ...  His criticism followed one of the conference's few tense moments when Alison de Pelham, executive director for the DCFN, challenged Nutter. de Pelham accused the Mackenzie Delta Producers Group of proceeding to the next phase of a Mackenzie Valley pipeline even though the Deh Cho First Nations are not supportive. Nutter replied that the producers group is comfortable enough with existing aboriginal support throughout the NWT to begin the project definition phase, which will include community consultations and regulatory applications.  At the request of a few chiefs, Liidlii Kue First Nations Chief Rita Cli later publicly clarified that DCFN staff are not speaking on behalf of elected officials. ...  Parrish said local people missed out on opportunities associated with the Norman Wells pipeline decades ago. "If you're waiting for the day when they start laying pipe, it's too late," he said. - Yellowknife, by Richard Gleeson-Yellowknife (Feb 22/02) - Joe Handley has struck a balance that, at first glance, has pleased both business and social activists. The territorial finance minister's 2002-03 budget, released Wednesday, projects a $12.1 million deficit and calls for modest spending increases in social programs. - Fort Simpson, by Derek Neary-Fort Simpson (Feb 22/02) - An initiative to prepare for the social impacts of industrial development in the Mackenzie Valley elicited some strong opinions Thursday.        *     See Northern Gas Pipelines' soon-to-be-completed report on the Oil & Gas Track of the recent Pac Com Expo: Oil, Gas & Mining Show & Conference in Anchorage, organized by Rada and Kim Jones.   On our special page, which you may view here, we also provide titles of those who joined Rod Johnson, Consul & Sr. Trade Commissioner, office of the Canadian Consulate General (Seattle) for an informal reception Thursday evening.  We'll also have a Pac Com photo gallery by this weekend featuring speakers, vendors, attendees...and Herb Shaindlin, KFQD's master talk show host who covered Pac Com (Photo)...and who interviewed author on gas pipeline projects in the 1970s for his television program.   *     WILLIAMS NEWS LIVE--The first serious debate over comprehensive energy legislation in a decade is about to start in the U.S. Senate. The energy bill is expected to be one of the first items on the agenda when Senators get back to work on Tuesday, though there are rumors other legislation could get in the way.     *     Houston Chronicle, TULSA, Okla. -- Williams Communications Group...may slash the value of its shares by issuing stock to replace some debt, analysts said Thursday.     *     Opinion, Voice of the Times-Because of the immense nature of the project, and the inherent financial risks of any venture of this size, the producers will be unable to commit to it unless there is legislation to smooth over the volatile price fluctuations that are part of the natural gas business.      *     CBC, OTTAWA - Alberta has warned that Canadian ratification of the Kyoto Accord could cost the economy up to $40 billion, drastically higher than estimates by the federal government.

2-21 (Updates, 02:25, 03:05, 04:20, 11:35, 18:24 ET): Northern Gas Pipelines today sings, "O Canada", in honor of the many distinguished Canadians visiting Alaska this week.  Last night, Canada's Consul, Rod Johnson (Photo) hosted a good-will reception at the Captain Cook Hotel.  Invited Alaskans included: Bill and Charlene Stamps, Craig and Jackie Honeycutt, Dave Haugen, Dave Harbour, Larry Houle, Chuck Becker, Greg Wolf, Rada Jones, Ronda Thompson, Roger Chan, and Karen Brand.  Canadian guests included Honourable Mark Hlady-MLA, Gordon Guenette, Deryk Anderson, Sam Quisenberry, Don Byers, Owen Gilbert, Dan Kohut, Mike Mrdjenovich, Marvin Molzan, Meil Windsor, Sue Evison, Paul Godfrey, Wendy Boje (Note: more background information tomorrow.)  A special guest was a long-time friend of Alaska, Galina Pavlova from Sakhalin.  Yesterday, at Rada & Kim Jones' Pac Com Expo Oil, Gas & Mining Show & Conference in Anchorage, attendees heard from: Kris Fuhr, Manager, Projects Group , Phillips Alaska, Inc.; Scott Heyworth, Chairman, Citizens Initiative for the All-Alaska Gasline; Rod Johnson, Consul & Sr. Trade Commissioner, office of the Canadian Consulate General, Seattle;  Commissioner Pat Pourchot, State of Alaska Department of Natural Resources; Diane Prier President, Williams Alaska Petroleum; Richard Ranger, Valdez Business Unit Advisor, Alyeska Pipeline Service Company; John Shively, Senior Partner, Jade North, LLC.; Senator John Torgerson, Chairman of the Legislature's Joint Gas Pipelines Committee; Ken Thompson, President, Pacific Rim Leadership Development (We are preparing a report for you now, including downloadable speeches.  Please check back tomorrow.)     *     (JUNEAU) - The state would continue to encourage exploration for new sources of oil and natural gas on state lands under a measure that passed the House today to extend a state incentive program for such exploration for three additional years.  "Alaska's economic health is closely tied to the production of oil and gas, so it is in the best interests of the people for the state to encourage private industry to continue searching for new petroleum deposits," said Rep. Hugh "Bud" Fate, sponsor of House Bill 307, which passed the House unanimously.     *       (SOLDOTNA) -- After eight years of service to the people of the Kenai Peninsula and the state of Alaska, Sen. John Torgerson (Photo, 2-21-02) announced today he will not seek re-election to his Senate seat this fall.  "I have thoroughly enjoyed representing my friends and neighbors on the Kenai, and will miss the opportunity to serve them in this forum," said Torgerson. "But there is clearly a benefit to allowing new ideas and new blood into the Legislature, and it's time for me to step aside and give someone else a chance."

2-20 (Update: 00:21, 02:12 ET): Alaska Revenue Commissioner Wilson Condon (Photo-left) discussed Alaska Natural Gas Pipeline state ownership issues yesterday at the United States Association for Energy Economics (USAEE, formerly IAEE) meeting hosted in BP's Anchorage headquarters.  Condon briefed members on the presentation Governor Tony Knowles made earlier on the concept of using the Alaska Railroad's unique bonding authority to potentially reduce pipeline financing costs by over $1 billion...(full story here).     *     The Resource Development Council in concert with the Alaska World Affairs Council, Commonwealth North and The Alliance will present a special luncheon on Friday, March 1 featuring: David Garman, Assistant Secretary of Energy Efficiency and Renewable Energy (Details: 907, 276-0770).     *     TODAY, at the Pac Com conference in Anchorage, from 10 a.m. - 2 p.m., you may hear from: Kris Fuhr, Manager, Projects Group , Phillips Alaska, Inc.; Scott Heyworth, Chairman, Citizens Initiative for the All-Alaska Gasline; Rod Johnson, Consul & Sr. Trade Commissioner Canadian Consulate General, Seattle;  Shane P. O'Leary, GTL Program Manager , BP; Commissioner Pat Pourchot, State of Alaska Department of Natural Resources; Diane Prier President , Williams Alaska Petroleum; Richard Ranger, Valdez Business Unit Advisor , Alyeska Pipeline Service Company; John Shively, Senior Partner, Jade North, LLC.; Ken Thompson, President, Pacific Rim Leadership Development (We plan on producing a report for you.)     *     JUNEAU -- Alaska Sen. Frank Murkowski, in his annual address to the Alaska Legislature, yesterday said he will seek congressional passage of a series of federal initiatives that would promote energy development in addition to legislation that would give the University of Alaska a land grant. Murkowski thanked lawmakers for contributing another $1 million to lobbying efforts to open the Arctic coastal plain to the oil and gas exploration. Debate on an energy bill likely will resume in Congress next week.      He said as part of any federal energy bill he will propose amendments to help bring about an Alaska gas line project, noting he wants to guarantee a southern route for a gas line, provide a $20 million job training program when a line proceeds and guarantee that natural gas will be available in the Railbelt for home heating and petrochemical development.

2-19 (Update: 00:38, 01:42, 02:08, 03:05, 14:45 ET)-National Post, by Carol Howes-CALGARY - Natural gas producers in Alaska have turned down the two latest proposals to build a major gas pipeline, casting further doubt that a viable project can be built any time soon to move gas from the state's massive North Slope basin to North American markets.  (Thanks to our friends at the Canadian Institute for this lead.)       *     The Council of Yukon First Nations, Oil & Gas Secretariat invites First Nations to the 3^rd First Nations Oil & Gas Summit to be held at the Mt. McIntyre Recreation Centre in Whitehorse, Yukon March 20 – 22, 2002.  A highlight of the Summit Agenda will be the final review of the “Pan-Northern Protocol for Oil & Gas Development” accord between Yukon First Nations, Northwest Territories and Alaska.  The accord reflects our commitment to share information and coordinate efforts to ensure that oil and gas development proceeds in an environmentally responsible manner which maximizes employment for First Nations.  The Summit is your opportunity to participate in discussions on the proposed Alaska Highway Pipeline Project and the exploration, development, and commercialization of oil and gas in the Yukon.  (Your invitation is available here.  For this information, we thank Deborah Dupont, Council of Yukon First Nations Manager of Claims & Devolution)    *     Peninsula Clarion Opinion Piece by State Senator John Torgerson-As many of you know, I am the chair of the Joint Committee on Natural Gas Pipelines. That has been a primary focus since I was appointed as the chair in May 2001. I want to maximize the benefit Alaskans receive from our natural gas resources. ... My contacts with various Canadian officials have been both singly and with members of the Joint Committee. I have been to Whitehorse, Yukon Territory; Yellowknife, Northwest Territories; Calgary, Alberta; Edmonton, Alberta; and Vancouver, British Columbia, to meet with officials responsible for pipelines, energy, economic development, mining, Native affairs and international trade.     *     Netricity LLC has hired Parsons Engineering Inc. to study the economics and markets for a proposed $1 billion data center on the North Slope, according to Petroleum News Alaska (subscription service).  Mike Caskey (NGP Photo, 5-14-01) is vice president of Fidelity Exploration and Production Co., a project partner.

2-18 (Update: 1:56, 3:28, 13:10, 13:30, 16:12 ET)-Courtesy of APRN, we've added audio interviews to our report of President Bush's Saturday stopover to Anchorage on his Asian diplomatic mission.      PLEASE NOTE THESE UPCOMING EVENTS AND THOSE IN THE RIGHT MARGIN: Alaska Revenue Commissioner Wilson Condon (Photo-right) discusses Alaska Natural Gas Pipeline issues tomorrow, noon, at the International Association of Energy Economists meeting hosted in BP's Anchorage headquarters.  Senator Frank Murkowski offers his Washington report to members and guests of the Resource Development Council for Alaska at 7 a.m. business meeting Thursday at the Sheraton Anchorage.      *    Northern News Services, by Richard Gleeson, Yellowknife  - The future of the NWT is so bright, Joe Handley may well be sporting shades rather than the traditional new shoes this week. ... With oil and gas exploration taking off, a diamond staking rush under way, a Mackenzie Valley pipeline a step closer to reality, business in the NWT is booming.  (Business philosophy of NWT.)    *      BP launches new sulfur-free unleaded and diesel fuel in Edinburgh.     *     Anchorage Daily News, by Sarana Schell-While oil development in the Russian Far East may not be booming, it's ramping up in a big way, said Jeff Berliner, Russian Far East specialist for the state Division of International Trade and Market Development. Exxon Mobil, Shell, BP and their partners are looking to spend $25 billion over the estimated 25-year lifespan of developments off the north shore of Sakhalin Island north of Japan, Berliner said, and projects are just in the beginning phases. Accordingly, a Russian contingent will be in force this year at the 7th annual Pacific Rim Construction, Oil and Mining Expo (Pac Com) in Anchorage this week (See event link right column.).

2-16/17 (Weekend Update: Sat. 02:25, 02:35, 11:52, 12:02, 19:30, 20:23; Sun. 12:43 ET)-O&G Journal, by Sam Fletcher, HOUSTON, Feb. 15 -- US imports of liquefied natural gas (LNG) have plummeted since September with the collapse of domestic gas prices and increased security concerns about such facilities in the wake of the Sept. 11 terrorist attacks. "The US received only 12 LNG cargoes during the fourth quarter compared with 75 cargoes during the first three quarters of 2001," said Robert Morris, industry analyst at Salomon Smith Barney Inc., in a special report issued Friday.      *     Saturday President George W. Bush arrived in Anchorage for a stopover on his way to Asia this morning, encountering cheering military and civilian crowds at an Elmendorf AFB hanger.  Serenaded by the Air Force Band of the Pacific citizens waited standing for two hours, their enthusiasm undiminished with arrival of the Commander-in-Chief.  Of most interest to northerners was Bush's statement that, "I understand the need for a National Energy Plan, to be less dependent on foreign energy sources," he said.  "We have to find energy in our own country and the best place to start is in the state of Alaska.  We need to be exploring for oil and gas in the Arctic National Wildlife Refuge," he said.  He added that the state could both produce more energy for America and protect the environment.  The Alaska Republican Party hosted the President for a reception at the Alaska Native Heritage Center before he left for Asia (ADN Photo-above).  See speech transcript here.  See event photos.  Anchorage Daily News review.    *     Congressional Quarterly-Yesterday, the Senate began its long-awaited debate on an energy policy measure (S 517) after temporarily setting aside an election system overhaul bill (S 565).  Majority Leader Tom Daschle, had promised Republicans that he would bring up the energy bill prior to the Presidents Day recess, which begins tomorrow. But before the real fight on the bill gets under way, the Senate will first finish up work on the election bill when it returns from the recess on Feb. 25. A final vote is expected Feb. 26. Debate on the energy legislation is likely to be heated and prolonged; it could take up to three weeks. Part of the controversy involves a GOP effort to attach President Bush's proposal to allow oil and natural gas drilling in Alaska's Arctic National Wildlife Refuge (ANWR). John Kerry, has threatened to filibuster any amendment hat seeks to allow drilling in ANWR.  (See Anchorage Daily News Story by Liz Ruskin.)     *      CBC, Yellowknife, N.W.T. - The NWT's Minister of Finance thought the deal was sealed for a pipeline down the Mackenzie Valley when a British newspaper reported a petroleum giant was pulling out of its involvement in the Alaska Highway route.  ...the pipeline is not economic at this time but BP continues to look for ways to make it feasible.      *     Globe & Mail, by Brent Jang, CALGARY -- Assuming natural gas prices stay in the dumps this spring, plans to build an Alaska gas pipeline will start gathering dust unless government subsidies are offered.     *     Anchorage Daily News by Tony Hopfinger- BP remains interested in a proposed Alaska natural gas pipeline to the Lower 48, but the estimated $15 billion and $20 billion is not financially feasible at today's gas prices, said chief executive John Browne. Speaking to analysts in New York on Thursday, Browne said the pipeline "is not a very good project at all" because of current prices and competing energy supplies. ...  While Browne said BP is still considering the project, the message apparently didn't come through to everybody at Thursday's briefing. A headline on an article by The Financial Times said BP is "shelving" the pipeline, which prompted company spinsters to quickly clarify their leader's comments. BP spokespersons said the article had factual errors and misquoted Browne. "We do believe the gas line is an opportunity that is real, and we are pursuing it," said Ronnie Chappell, spokesman at BP Exploration (Alaska) Inc. ... The line would be so long that it would cross land owned by more than 10,000 public and private entities. The sheer size of the pipe itself is mind-boggling. One 40-foot-long segment would weigh (24,000 pounds. "A story on Page C-1 in Saturday's paper and a Dec. 13 article on Page E-1 incorrectly stated how much piping would weigh on a proposed natural gas line to the Lower 48. A 40-foot pipe segment would weigh 24,000 pounds, not 56,000 pounds, said Dave MacDowell of the Alaska Gas Producers Pipeline Team."  -dh). "We have a joke (about the project). It is so big that it creates its own weather," said Ken Konrad, head of BP's natural gas development team in Alaska. BP, Phillips and Exxon Mobil -- owners of most of the Slope's proven gas reserves of 35 trillion cubic feet -- have finished a $125 million study that looks at what it would cost to thread the line along the Alaska Highway or run it under the Beaufort Sea and across the Canadian Arctic. While final results haven't been announced, preliminary analysis questioned whether either route would return enough profit given the huge project risks. On Thursday, a BP manager said the pipeline probably wouldn't come on line until at least the end of this decade. "It might be in 2008, but it's perfectly likely in 2009 and it could be in 2010," said Dick Olver, BP head of upstream oil operations, in a story from Reuters, a British news service. Browne said government assistance, such as tax credits, could make the project more attractive. A couple proposals independent of BP are in the works to offer state or federal help for a pipeline development. Gov. Tony Knowles this week introduced a bill that would authorize the state-owned Alaska Railroad Corp. to issue up to $17 billion in tax-exempt bonds for companies that build and run a pipeline. And Phillips Alaska Inc. is floating an idea in Washington, D.C., that would protect the company from low gas prices by establishing a price floor of $1.25 per million BTU after subtracting from the market price the cost of shipping gas through a pipeline. "It's unlikely that (BP is) going to ask for fiscal relief, but I hope that one day we might be offered it," said Browne in the Reuters story. BP and its partners are looking at ways to reduce project costs on their own. One effort is under way to look at how difficult and costly it is to trench pipe in permafrost. Small studies on other project aspects are expected this year, Konrad said. "We do think there may be a way to make this project work," he said. "But if it was easy, it would have been done 25 years ago" when oil production began.      *     CBC, Inuvik, N.W.T. - A seismic company doing work in the Beaufort Delta continues to suffer from a turnover of northern employees. For some operators, about half of their northern employees worked through the entire season last winter. ,,, Half of its workers left in 1999. The following winter 28 people left before their contracts were over. So far this winter, the company has lost 15 out of 63 northerners who were hired initially.  The Inuvialuit Regional Corporation's Oil and Gas newsletter says northerners left last winter for a variety of reasons such as family problems. Others simply found it difficult to be away from home for extended periods of time.   Last winter, Western Geco offered a 15-hundred dollar bonus to people who stayed until Apr. 15 but a lot of people left right after that date even though programs were still continuing.  "We find we are left with not enough people to do the job," spokesperson Orland Hansen says. "It puts us in a bind when we lose a proportion of our workforce. And again, it just makes it tougher logistically."     *     ACCORDING TO GOVERNMENT REPORTS RELEASED TODAY, Prime Minister Jean Chrétien (Photo, w/President Bush, Rose Garden) witnessed today the signing of 77 new business deals by Canadian enterprises during the Russia portion of the Team Canada 2002 trade mission. The deals, totalling $337.151 million, include 25 contracts, totalling $148.059 million, and 52 memoranda of understanding and letters of intent, totalling an estimated $189.092 million.  "The success of Team Canada 2002 is a clear sign that the time is ripe for Canadian companies to substantially raise their profile in the new Russia," said the Prime Minister.

2-15 (Update-00:22, 11:39, 15:23 ET)-Northern Gas Pipelines last night received more details on the President’s visit from Alaska’s Congressional Delegation -- President George W. Bush (White House Photo-reading) will arrive at Elmendorf Air Force Base in Anchorage at approximately noon on Saturday.  Upon arrival, he will address about 5,000 Alaska military personnel and civilian guests at a base hangar. Following the rally, the President will attend an event sponsored by the Alaska State Republican Party. After the event, the President will reboard Air Force One and depart on a scheduled trip to Asia.  "It's great that the President and First Lady are coming to Anchorage. Living in Fairbanks a few years ago, the President got to know Alaska and Alaskans, and he hasn't forgotten," said Sen. Ted Stevens. (Photo-right, Summer-01)   "As we've seen, there's no question about the support our First Lady provides for the President, and the calm strength she has exhibited in these tough times," Senator Stevens said.  Senator Frank Murkowski  observed, "At a time when the Senate likely will be in the midst of a debate over energy legislation and whether to open the Arctic coastal plain to oil exploration, I can't think of a better time for the President to visit our great state.  His visit will bring attention to the need for a safe and stable domestic supply of energy." Senator and Mrs. Murkowski will be accompanying the President to Alaska on Air Force One.  Congressman Don Young (Photo-above, 8-01) added, "It is an honor to have him visit our state.”  (Northern Gas Pipelines will report on any gas pipeline developments this weekend.  See ADN story by Liz Ruskin   -dh)     *    Meanwhile, we reported Wednesday that Lt. Governor Fran Ulmer (Photo, 5-01 visiting Agrium's Kenai plant) met with eleven U.S. Senators while in Washington D.C. this week.  "Democrats as well as Republicans support oil and gas development in Alaska," Ulmer said. "It was an excellent opportunity to deliver that message face to face."   Ulmer also told them that oil and gas development is not only good for Alaska's economy but also for the nation's economy and that Alaska had the expertise to do it in an environmentally responsible way.   Ulmer was in Washington to attend the annual conference of the National Association of Secretaries of State, then meeting with the following democrat Senate leaders on Monday and Tuesday: Senators Dianne Feinstein, Blanche Lincoln, Thomas Daschle, Maria Cantwell, Zell Miller,  Tim Johnson, Kent Conrad, Jean Carnahan, Mary Landrieu, Debbie Stabenow & Daniel Akaka.  Ulmer also met with the Assistant Secretary of the Department of Energy, Mike Smith and Donald Juckett, chair of the Department's gas line task force to brief them on the state's plans for tax-exempt bond financing of the Alaska gas line project (Reported here).     *     CBC, LONDON-NWT Premier Stephen Kakfwi (Photo-left) was in London yesterday and left for Russia and Germany later in the afternoon.  While in England, Kakfwi met with diamond mining companies De Beers and Rio Tinto. In Russia and Germany he'll join Prime Minister Cretien's Team Canada mission.      *     Peninsula Clarion, by Marcus K. Garner-Making Alaska less dependent on government and oil spending is important to maintaining the state's economic stability in the long run.  This is the message Alaska Resource Development Council Executive Director Tadd Owens has been delivering around the state.     *     WASHINGTON -- Alaska Sen. Frank Murkowski (Photo-right, 9-01) yesterday led a group of Senators and outside experts in explaining why it is vital that America pass comprehensive national energy legislation now.     Speaking on the eve of the Senate likely taking up national energy legislation, Murkowski and Sens. Don Nickles; George Voinovich; Kay Bailey Hutchison; Richard Perle, former Assistant Secretary of Defense; and Jerry Hood, President of Alaska's Teamsters Union, argued securing more domestic energy sources is vital for the national security, for its economy and to produce jobs for Americans. They also argued that opening a small part of the Arctic coastal plain to oil and gas exploration is also vital for the environment.     "It is vital that everyone understand that in this energy bill there is an emphasis on balance. The balance is we need conservation, we need alternative (fuels), but we're also going to need additional supplies. And, of course, that is where leasing in ANWR (the Arctic coastal plain) fits in.”      Perle, now a national security expert, argued that America's growing dependence on foreign energy sources is threatening America's foreign and military security policy. "When we have to alter our response to terrorism because of our dependence on imported energy, it puts the entire war on terror at risk," said Perle.       Hood argued that a sound energy policy is vital for families. "American families are struggling like they haven't been in decades because of layoffs. We need good-paying jobs. Energy development will provide those jobs," said Hood.  The Senate is expected to start debate on an energy bill Friday after the President's Day recess, Feb. 26.

2-14 (Update-1:26, 2:27, 3:10, 4:05, 4:27, 13:10, 15:21, 16:22 ET):  ANCHORAGE-Reliable sources told Northern Gas Pipelines yesterday that President George W. Bush (Photo-Presidents Bush and Musharraf yesterday in Washington) will be stopping over in Anchorage briefly on his trip to Asia this Saturday.  The President once worked in the state and is familiar with its energy issues, including gas pipeline and ANWR.  He will meet with several thousand invited military and civilian guests at Elmendorf Air Force Base and attend an Alaska Republican Party reception at the Alaska Native Heritage Center.  The author received an invitation to the reception late last night from coordinator Curtis Thayer, adding validity to the earlier report.  Sponsoring the reception are Senators Ted Stevens and Frank Murkowski, Congressman Don Young, Anchorage Mayor George Wuerch and Fairbanks Mayor Rhonda Boyles (i.e. both mayors are members of Governor Tony Knowles' Gas Pipeline Policy Council.  See Anchorage Daily News Story by Zaz Hollander.)     *     Fort Simpson, NWT:  Review this speech given here yesterday: "Over the top", was delivered by Richard I. Hardy, Partner, Davis & Company, to the Deh Cho Resource Development Conference.  -"Everybody wins - investors remain whole, producers get higher net backs and low priced gas can still be shipped to market instead of being shut in thereby providing a better supply for the consumer, more royalty income for the governments that own the resource and more exploration activities with local employment and business opportunities."     *       Peninsula Clarion, Washington-It is a promising sign that the Bush administration has included a projected $1.2 billion in federal oil leasing revenue from the Arctic National Wildlife Refuge in its proposed 2004 budget.     *     WASHINGTON -- Alaska Sen. Frank Murkowski (Photo, 11-3-01) late yesterday won Senate Finance Committee approval for amendments that will encourage production of "heavy" oil from Alaska's North Slope, and help Alaska coal to be used to produce synthetic fuels.      Murkowski, during a meeting on energy-related tax provisions, won committee support for Alaska heavy oil to receive a $3 per barrel federal tax credit. The tax incentive is designed to encourage production of an additional 200 million barrels of heavy oil from Alaska's West Sak field over the next decade.     Murkowski also won approval for a $3 credit (equivalent to oil-produced energy) for low-pollutant synthetic fuels to be produced from coal. The amendment specifically expanded and extended an existing tax credit to apply to fuels produced from either tar sands, brine, biomass or coal before 2007.      "For this country to solve its energy crisis we need to encourage more energy production domestically. Alaska leads the world in coal reserves and holds billions of barrels of heavy oil under Prudhoe Bay. Providing the incentives is  important for the nation and for Alaska," said Murkowski following the "markup" session.      West Sak, an oil field that overlies the Kuparuk field at Prudhoe Bay, is thought to contain 15 billion barrels of oil, but it is heavy, viscous and difficult to produce economically. The tax credit is designed to improve the economics of pumping the oil to the surface and cleaning it of impurities.      Alaska also holds the world's largest reserves of coal.  About 80 percent of the state's low-sulfur, low-pollutant coal is located on Alaska's North Slope.      The amendments were included in the tax portion of a comprehensive energy bill. The committee is continuing its markup in advance of Senate floor debate on an energy bill, likely to start later this week.     *     P.S.  Today, Senators Diane Feinstein and Maria Cantwell plan to introduce legislation "to regulate and require transparency and disclosure for all energy transactions".     *     VANCOUVER, BRITISH COLUMBIA--Westcoast Energy Inc. (Westcoast) announced record net income applicable to common shares for the year ended December 31, 2001 of $526 million, compared with $340 million for 2000, an increase of 55%.  Westcoast is half-owner of Foothills Pipe Lines Ltd.     *     National Post, CALGARY - In the two and a half weeks since announcing their blockbuster merger, the stocks of Alberta Energy Co. and PanCanadian Energy Corp. have generally moved higher as the market looked past dissatisfaction over terms of the deal and new investors signed on for a piece of EnCana Corp., the new Canadian-based energy giant they are proposing to create, analysts said.   Northern News Services by Dave Sullivan-Mackenzie Place, the tallest building in the NWT, could have a new landlord after an environmental study wraps up, sources say.

2-13 (Update-12:25, 1:33, 10:31 ET): Lieutenant Fran Ulmer (Photo, 10-2-01) sent Northern Gas Pipelines a report of her Washington trip last week, coinciding with Governor Tony Knowles creative gas pipeline financing proposal to his Alaska Highway Gas Pipeline Policy Council.  Ulmer said the U.S. Department of Energy will beef up its staff in Alaska, once the proposed natural gas pipeline from the North Slope begins its permitting phase.  Ulmer received the assurance this week after meeting with Assistant Secretary of Energy Mike Smith to brief him on the state's plans for tax-exempt bond financing of the project and other gas line issues.   Ulmer also met with Donald Juckett, chair of the Department’s gas line task force to discuss gas line regulations and streamlining the permitting process.  "There is a lot of interest in this project from the Bush Administration.  Department of Energy officials expressed enthusiasm for streamlining the permitting process so that the federal and state agencies can work together in ways that simplify the process," Ulmer said.  “Finding the right answer to bringing down the cost of the project has been the challenge in getting Alaska’s vast natural gas resources to market,” Ulmer said.  "Part of that is reducing the uncertainty of the permitting process and the time it takes to clear all the hurdles."  She praised a proposal to use the Alaska Railroad Corporation’s tax-exempt bond authority to help finance a natural gas pipeline as a major step toward making the project a reality.   “This type of creative proposal is a positive step toward making a natural gas project a reality and I applaud Gov. Knowles’ leadership in crafting this proposal.  We need to continue discussions with the producers and the pipeline companies to see how e can make this project economic."  Knowles said his proposal could shave a billion dollars off the cost of the project. “The gas pipeline project can help stabilize Alaska’s economy in years to come,” said Ulmer, “bringing new jobs and revenues to the state, and addressing the nation’s demand for clean-burning fuel. I am very enthusiastic about gas line development and the role it can play in our future”  Ulmer met with several U.S. Senators on Monday and Tuesday to discuss the gas line and ANWR development.  We'll hope to bring you further reports on those meetings.   *     Gov. Tony Knowles yesterday introduced legislation to authorize the Alaska Railroad Corporation to issue $17 billion in tax-exempt bonds to finance the proposed Alaska Highway natural gas pipeline.  "We can use the bonding authority of the Alaska Railroad Corporation to help bring good jobs and needed revenue to the state and to deliver Alaska's abundant natural gas to a waiting continent," said Knowles. "We've asked the producers to sharpen their pencils and give this a close, hard look. Fully utilizing this unique opportunity would be a significant step forward in Alaska's effort to finance and construct what would be America's largest, privately funded construction project."  The railroad's ability to issue tax-exempt bonds to finance industrial development was authored by Alaska Sen. Ted Stevens and approved by Congress.... (See more here.  PHOTO-Joining Knowles for the bill introduction today were DOT/PF Commissioner Joe Perkins, DCED Commissioner Debby Sedwick, Bill Corbus, and Rep. Eric Croft)        *     The Juneau Empire, by Bill McAllister-Recent moves on a long-range fiscal plan ....     *         BARTLESVILLE, Okla.,  --- The board of directors of Phillips Petroleum Company [NYSE: P] declared a quarterly dividend of 36 cents per share this week.

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2-9 Update-10:52, 11:27 ET):  "Two Views of the World, For Alaskans only", we say with a smile:  "What is the best way to commercialize North Slope natural gas?"   See Oil and Gas Reporter commentary here, by the author for one view and by candidate for Governor Nels Anderson, for the other.    -dh    *      Northern News Services, by Richard Gleeson, Yellowknife - U.S. lawmakers should not be trying to influence pipeline decisions with subsidies and tax incentives, deputy premier Jim Antoine (Photo-Houston, 11-29-01) told U.S. legislators in Washington earlier this week.   "Our position is that the industry should decide through their economic feasibility studies where the pipeline is going to go and if it is going to go," said Antoine said.  "We leave it up to industry to decide. We don't legislate. Some quarters here are seeking to subsidize the building of a pipeline in Alaska." ..., Antoine was referring to proposals by Alaskan representatives to subsidize a pipeline down the Alaska Highway.   With Hay River MLA Paul Delorey, Antoine was paying the territorial government's first official visit to the U.S. capital since the election of George W. Bush as president.   The new Republican administration is taking an aggressive approach to the development of domestic energy supplies in an effort to wean the country off Middle Eastern oil.  Alaskan Senator Frank Murkowski (Photo-right, 8-24-01) using the same argument to support his call for government incentives for construction of a pipeline that would transport Prudhoe Bay gas along a route following the Alaska Highway. ...  While in Washington, Antoine and Delorey met with Murkowski, Wyoming Senator Craig Thomas, Colorado Senator Benjamin Knighthorse Campbell, State Department officials and industry representatives.   The Alaskan government has attempted to thwart a main threat to that route -- an offshore link to the proposed Mackenzie Valley pipeline -- by outlawing undersea pipelines along its Northern coast.  Antoine said Murkowski is under pressure to produce something for the State to bolster his run for the office of governor.  "He has to find a way to deliver something before the election next November in Alaska," Antoine said. "So he's got a big issue he wants to keep moving forward."  The incentives being offered have so far failed to sway Prudhoe Bay producers.   At a U.S. Senate committee hearing last October, ExxonMobil president Terry Koonce took much the same view as the GNWT. "If a project is determined to be economic in a normal market environment, no special incentive or subsidy is necessary," Koonce testified. "If a project is not economic, our preference is to try to improve it through our own actions or wait until the market conditions support the project." ....     *      Northern News Services, by Richard Gleeson, Yellowknife - ... Indian Affairs and Northern Development Minister Robert Nault appointed Todd Burlingame chairman of the Mackenzie Valley Environmental Impact Review Board against the wishes of the board.   At a meeting in mid-December, the board recommended the term of chairman Gordon Lennie be extended for another term, said board member Gordon Wray.   "There's nothing really to talk about, we made our recommendation, the minister didn't accept it, end of story," Wray said. ... Nault was unavailable for comment by deadline, but a spokesperson for his office said part of the reason for the appointment was that Lennie was not in a position to participate in board discussions of oil and gas projects.   "It was felt that the board required someone who would be able to join in those discussions directly," said Alastair Mullin. Lennie said he excused himself from the discussions because he was a member of the aboriginal pipeline working group, which was attempting to negotiate aboriginal participation in a Mackenzie Valley pipeline.     *      Northern News Services by Derek Neary, Fort Simpson  - The Liidlii Kue First Nation is rolling out the red carpet to industry and delivering a resounding message.  "We're not against development, we just want to be in control of development," said Rita Cli, chief of the LKFN, which is sponsoring next week's Deh Cho Resource Development Conference along with the Village of Fort Simpson and Metis Local 52.   The Feb. 12-14 conference will bring together Deh Cho delegates, federal government officials, industry representatives and First Nations training and employment coordinators. Oil and gas exploration and development, mining, energy, forestry, eco-tourism and the fur industry are all part of the agenda.  Deh Cho First Nations Grand Chief Michael Nadli, who is scheduled to be a guest speaker on Tuesday, said he plans to review self-government negotiations and explain when resource development is most likely to occur within the region.  "It's very much in our best interest to maintain unity (as a region) at this point (in negotiations)," he said. "If one of our communities breaks ranks, obviously that's going to set a very bad precedent."  Cli said Nadli was invited to convey whatever message he felt necessary. She added that the LKFN is still supportive of the Deh Cho Process "because the Deh Cho Process is (about) land management, not land sales," she said. "We just want to be in control, that's the bottom line...."The purpose of the conference, according to the organizers, is to present an overview of current and potential development, to identify short and long-term employment and business opportunities and to ensure that social and environmental dimensions are not overlooked.   Cli said that technological advances such as helicopter-supported seismic programs can leave much less of an impact on the environment. These are the sorts of things that must be considered, she said.   She added that leaders from the 10 Deh Cho communities will caucus during the week to discuss conditions they want to apply to a Mackenzie Valley pipeline....  

2-8 (Update-00:11, 04:29, 06:35, 07:10, 08:22, 15:13, 17:55 ET): ANCHORAGE-Yesterday, Governor Tony Knowles (Photos: left, First Lady Susan Knowles joins applauding audience; right, Knowles) attributed his Administration's new gas pipeline financing proposal to recommendations originating with his Alaska Highway Natural Gas Pipeline Policy Council in their final report, last November.  He gave particular credit to Bill Corbus' subcommittee, which "...carefully analyzed ownership benefits and risks...."  Please go here for complete report, brief commentary, downloads and photos of the event.        *      WASHINGTON -- The Alaska Congressional Delegation today welcomed an effort by Alaska Gov. Tony Knowles to take advantage of a 19-year-old federal tax law change strongly supported by the Delegation to reduce the cost of financing an Alaska gasline project.      Knowles today proposed using a tax law change passed when the Alaska Railroad was transferred to the state in 1983 and recodified in 1986 that allows the Alaska Railroad to issue federally tax exempt bonds to finance capital construction projects in the state. The Governor said he believes the tax-exempt financing measure could reduce the cost of the pipeline by more than $1 billion, making it more economically feasible.     "I have discussed the history of these provisions with Governor Knowles and feel it is appropriate to use them to further the project," said Sen. Ted Stevens.      "We certainly are aware of the tax provision. I certainly hope the Internal Revenue Service will find that the Railroad's tax exempt bonding status is broad enough to cover pipeline construction. We all welcome any steps to drive down the cost of construction of an Alaska Highway or All-Alaska pipeline project," said Sen. Frank Murkowski.      "This is an enormous project that will come together when markets and commercial interests are right.  In making this a reality, there is an appropriate role for state, local and the federal government.  I, along with Ted and Don have been working to advance this project at the federal level and believe that substantial progress has been made and further efforts will come to fruition when we debate a National energy strategy this month.    *        ANCHORAGE, Resource Development Council for Alaska-Consensus in the room seemed to be that President George Bush and EPA Administrator Governor Christie Todd Whitman (Photo 7-01, with Ken Freeman-former RDC Executive Director now with Governor Tony Knowles' office) had, with help from the Alaska Congressional Delegation, hired the right person to head up EPA's Region.  Today, Kodiak transplant to Seattle, John Iani (Photo, 2-7-02) said that while EPA has expertise the states don't have, states also have expertise the EPA doesn't have.  "Governor Whitman," he said, "realizes as a former governor that problems need to be resolved at the local level."  He then urged the crowded RDC audience, consisting of representatives of gas pipelines, oil fields, miners, commercial fishing and timber to "give us your priorities."  By prioritizing, he said, EPA could focus on the most important  projects.     *     The Legislature's Joint Committee on Natural Gas Pipelines has hired a Washington, D.C. law firm to boost its expertise on federal regulatory issues critical to eventual construction of a pipeline to bring North Slope natural gas to market, the committee chair said today.  "Most of the decisions on an Alaska natural gas pipeline will be made in Washington, D.C., by the Congress and the Federal Energy Regulatory Commission (FERC)," said Sen. John Torgerson (Photo-right, with Rep. Joe Green, Vice-chair) the committee chair. "If we want to have a seat at the table, we need to develop a level of expertise on FERC issues and Congressional legislation."  The pipeline committee has contracted with Hogan & Hartson L.L.P..... The contract runs through the end of the current legislative session.  Torgerson and Green met this week with Karol Lyn Newman, a Hogan & Hartson partner....       *      CBC, Whitehorse, Yukon - Awarding oil and gas rights in the Peel Plateau to Hunt Oil is a double win, according to economic development minister Scott Kent....  Hunt Oil says they're waiting to see what happens with a gas pipeline. It has six years to act on their exploration rights.  (See Premier Pat Duncan's recent position statement.)      *            From the Natural Resources Defense Council's "Legislative Watch"-As part of his State of the Union address on 1/29, President George Bush urged passage of an energy bill. The administration's energy proposal and a similar Republican-backed House bill (H.R. 4) that passed last year would open the Arctic National Wildlife Refuge to oil drilling and provide huge subsidies to the fossil fuels and nuclear energy industries. Senate Majority Leader Tom Daschle has introduced an alternative to H.R. 4 (S. 1766) that would require greater use of renewable fuels, more efficient air conditioners and heat pumps, and increased use of corn-based ethanol in gasoline. Instead of more oil and coal subsidies, S. 1766 seeks to replace America's dependence on foreign oil and an aging electricity system with clean, efficient new technologies. Key elements of the bill are still being developed, including fuel economy standards as well as tax incentives to promote energy efficiency and renewable energy. Sen. Daschle intends to bring his bill to the Senate floor for debate in mid- to late February (You may download bill, left column, under 'Washington').     *   The stockholders of Conoco Inc. will meet on March 12, 2002, at 10:00 a.m., local time, at Omni Houston Hotel Westside, 13210 Katy Freeway, Houston, Texas, to consider and vote on the proposal to, "Adopt the Agreement and Plan of Merger, dated as of November 18, 2001, by and among Conoco, Phillips Petroleum Company, a Delaware corporation, ConocoPhillips, a Delaware corporation, which we refer to as "New Parent," C Merger Corp., a Delaware corporation and a wholly owned subsidiary of New Parent, and P Merger Corp., a Delaware corporation and a wholly owned subsidiary of New Parent."    ConocoPhillips will be the third largest integrated energy company in the United States based on market capitalization, oil and gas reserves and production. It will be the fifth largest refiner and the sixth largest non-governmentally owned energy company worldwide based on oil and gas reserves.

2-7 (Update-00:21, 01:03, 10:13, 13:50, 15:19, 21:00 ET):  TODAY at 1 p.m. AT, Gov. Tony Knowles (Photo-10-23-01)  unveiled a new proposal to assist financing of the Alaska Highway natural gas pipeline in an address to his Natural Gas Policy Council at the Hilton Hotel. This technique would use a unique, tax-exempt bonding provision in legislation transferring the Alaska Railroad from Federal government to state ownership.   Northern Gas Pipelines will provide a report tomorrow on this significant new development.  The governor was assisted by top officials of the Department of Revenue, private bond counsel, and a Wall Street investment banking firm.  Following the Governor's presentation, the Department of Revenue presented the results of its study on possible state financial participation in a gas pipeline project. The Department of Natural Resources also  presented its studies on gas demand and value and gave an update on the state's Royalty-In-Kind process.     *     CBC, Yellowknife, N.W.T. - The territorial resources minister says his lobby effort for a Mackenzie Valley pipeline just got a big boost.  Jim Antoine (Photo-11-29-01) says Alaskan Senator Frank Murkowski said a pipeline would likely be built in the territories before an Alaskan line is built.  Murkowski is one of the Alaska Highway Route's biggest supporters. He wants natural gas supplied to communities in his state and is also running for Governor of Alaska.  Minister Antoine says the Alaskan is beginning to see what industry is already saying; that the only route that's economically feasible right now is through the Mackenzie Valley.  "Industry has told him ... the Alaska pipeline is not economically viable to do," Antoine says. "In our meetings, Senator Murkowski of Alaska has stated that he sees that Mackenzie Valley pipeline proceeding before any pipeline in Alaska."  Antoine says the senator has offered advice from his state's experience with oil and gas companies. But Murkowski continues to call for legislation that would ban an over-the-top route to bring Alaskan gas to market through the Northwest Territories. Politicians in Canada don't seem worried about that possibility.  They say such legislation would not stand up to a challenge under the North American Free Trade Agreement.     *     Opinion, by Scott Heyworth-The All-Alaska route to Valdez down the existing TAPS corridor is a cheaper, quicker, more beneficial route for Alaska at about $8Billion, including that big gas conditioning plant, 3 compressor stations, pipeline, and LNG facilities/terminal in Valdez, and it needs no Federal help whatsoever.      *     WASHINGTON --  Alaska Sen. Frank Murkowski (Photo, 11-3-01) joined by fellow Senators, business groups, seniors, and  veterans groups, today urged Senate action on an energy bill which includes authority to explore Alaska's Arctic coastal plain.      "There's a lot of energy on energy, and the presence of all these groups here today is proof of that," Murkowski told reporters at a U.S. Capitol press conference.       "The economic benefits of an energy plan abound:  250,000 to 750,000 new jobs and less dependency on foreign oil.  Right now we're 55 percent dependent on foreign oil, when we were only 37 percent in the Carter era," said James L. Martin, President of the 60 Plus Coalition.  "And most important, the President has not gone on bended knee to the OPEC cartel."      "Seniors across the country, in every city and in every state, believe we have moved into an area of energy dependency that is unprecedented," said Charles W. Jarvis, President of the United Seniors Association.  "This is one of those bills that, the moment it is signed by the President, will begin to create thousands of jobs."      Jerry Yates of the Vietnam Veterans Institute took issue with Massachusetts Democratic Senator John Kerry's statement that President Bush's energy policy represents "false patriotism."      "Senator Kerry, the organizations that represent over 5 million veterans may disagree with you, but we are not false patriots.  The Members of the House, the Democrats and Republicans who came together in support of our national security and voted for the President's bill are not false patriots, either," Yates said.   "Our national security depends on our energy security."      "We bombed Iraq again last Monday, a country from which we buy a million barrels of oil a day," Murkowski said.  "National security demands that we secure ourselves against dependence on unstable regimes.  America needs a safe, stable domestic source for its energy supply."      Murkowski was joined by Sen. Kay Bailey Hutchison of Texas and Sen. Craig Thomas of Wyoming.     *     Alaska Needs Leaders—Now!   by Chuck Achburger, Common Sense for Alaska--Raising a couple of hundred million by the current suggestions coming out of Juneau only leads the citizens to wonder where our government will attack next, as our "leaders" roam our economy like wolves, to look for victims .  They have told us they need $1.2 Billion so we know they will be back haunting our doorsteps looking for more.       *   RDC meeting, Petroleum Club, Anchorage, "EPA Alaska Issues and Projects",  John Iani, EPA Region 10 Administrator, Seattle

2-6 (Update-01:01, 02:01, 09:04, 15:37, 16:28 ET)   See significant comments of Premiers Pat Duncan (Photo), Yukon Territory and Stephen Kakfwi (Photo), Northwest Territories regarding current status, Northern gas pipelines.  *  More U.S./Alaska news follows Minister Dhaliwal story below.

New Natural Resources Canada Minister – Herb Dhaliwal on Northern Pipelines

Reprinted from the Hill Times, 2-05-02 

HILL TIMES: If the Americans decide to drill in the Arctic National Wildlife Refuge, what will Canada's position be on developing a pipeline through the Yukon and Northwest Territories, a pipeline which could threaten caribou herds?

MR. DHALIWAL (Photo): We have agreements with the Americans on the Porcupine caribou herd which moves between our countries. We want to make sure that their habitat is protected. It states that if there are any changes, they must consult Canada. I expect the Americans will respect the agreement that we have with them. In terms of the northern pipeline, this is something only the business community can determine, based on long-term prices for natural gas and oil. It has to be market driven. A government can't tell a company where to build a pipeline. (Note) If it doesn't make economic sense, they're not going to build it no matter what the government says. We have to make sure that there is a regulatory system that allows them to build a pipeline in an efficient time-frame. We're very much committed to make sure we have an appropriate assessment system that doesn't create huge delays. So that if they are interested in building the Mackenzie Pipeline or the Alaska Highway Pipeline, we must have a system in place that allows them to do that in an efficient and reasonable time-frame.          *     Washington-Today, at 11 a.m. ET in S-207, Mansfield Room, the Senate Energy Task Force will join labor, small business & veterans along with Hispanic, Jewish, African American, senior and women leaders to address America's energy security.  Participants will include: Senator Frank Murkowski, Senator Craig Thomas, Senator Larry Craig, Terry Turner-Seafarers Union, Karen Kerrigan-Small Business Survival Committee, Robert Deposada-Latino Coalition and Hispanic Business Roundtable, Mark Broxmeyer-Jewish Institute for National Security Affairs, Jerry Yates-Vietnam Veterans Institute, Charlie Jarvis-United Seniors Association, Jim Martin-60 Plus, Harry Alford-African American Chamber of Commerce, and Robin Read-National Foundation for Women Legislators.  This is a press conference which our Capital readers are encouraged to attend.   *     Congressional Quarterly Email, Washington-Sen. Frank H. Murkowski, R-Alaska, said today that Congress should make sure a natural gas pipeline from Alaska to the lower 48 states does not run under the Beaufort Sea and down Canada's Mackenzie Delta. That would route the pipeline along the Alaska Highway, which would be longer and more expensive. Murkowski made his comments after meeting with representatives of companies interested in building the pipeline. "By making sure gas passes through Alaska, it will provide Alaskans, including Alaska Natives, access to abundant and clean energy," Murkowski said.  "Construction of the line and of a related petrochemical industry could mean 3,500 Alaska jobs, and the gas sales alone could provide the state with $22 billion in revenue over the life of the project." The Democratic energy proposal (S 1766) that Majority Leader Tom Daschle, S.D., has promised to bring up before the Presidents Day recess would provide low interest loans and regulatory relief for companies that build the pipeline, but the bill does not contain language pertaining to the pipeline's route.   *     Anchorage Daily News, AP, by Mike Chambers, Juneau -- A leading Senate Republican wants a constitutional amendment to close a loophole he says requires millions in backroom deals to pass a state budget.  Senate Finance Co-Chairman Dave Donley said....    *      Anchorage Daily News, AP, by Mike Chambers, Juneau-Senate President Rick Halford (Photo, 1-7-02, Anchorage Chamber) says cuts must come before taxes to solve Alaska's fiscal crisis.  "The object is to gain some credibility with the public...."     *          CALLING ALL EXPLORATION COMPANIES:  The Minerals Management Service is seeking companies interested in exploring Norton Basin for oil and gas, possibly as a means to bring natural gas to western Alaska communities.  See complete story here.     *     Governor Tony Knowles' Alaska Highway Natural Gas Pipeline Policy Council will meet from 1pm to 4:30pm on Thursday, February 7th in Anchorage.    Information: 269-7450.     *     Anchorage Daily News, Voice of the Times-THERE'S NO real question but that a natural gas pipeline from the North Slope will run south through Alaska -- not eastward across the Beaufort Sea, the so-called "over-the-top" route.

2-5: In the Olympic spirit, we offered a wonderful prize for our 48,000th reader, this Ulu, "Legendary Knife of the Arctic", made in Alaska by Dave Gransbury's Ulu Factory in support of Anchorage's Olympic bid.  OUR WINNER: Peter Stulken - Trade Commissioner - International Trade Centre - Industry Canada - Calgary     Please see our new addition to the purchasing officers' reference page: EBA Engineering Consultants Ltd.

(Update-01:12, 7:17, 09:21, 10:01, 12:20, 16:25, 17:00 ET):  Houston Chronicle/Bloomberg-TULSA, Okla. -- Williams Cos. said Monday it may sell pipelines and other assets to raise cash to protect its credit rating because the company may be liable for $2.4 billion in debt and lease costs from its spun-off communications business.  (The Williams Arctic Team has studied the feasibility of building a 1Bcf/d (ANS gas intake) petrochemical facility in Fairbanks.  Arguably the most involved Alaska Highway Gas Pipeline Project U.S. company, Williams is one of Alaska's leading corporate citizens: over 500 employees, convenience stores, a topping refinery, nAnchorage Terminal Storage, Trans Alaska Pipeline minority interest, state nroyalty oil purchaser, and Former Project Director of Alaskan Portion of ANGTS. -dh)    *       CBC, Whitehorse, Yukon - The Faro real estate market is so hot the main sellers are taking a break to let it cool off.    *     Whitehorse Star-The territorial government announced late Friday morning that the Hunt Oil Company of Canada won the right to explore a parcel of land in northeastern Yukon with a bid of $1.16 million.     *     Juneau-Yesterday, State Representatives (Photos left & right) Jeannette James and Kevin Meyer held a press conference.  In answer to gas pipeline related questions, James said she had received an email from a Lower 48 citizen indicating interest in supporting his state in issuing bonds to support an Alaska gasline--in return for access to the gas.  Meyers said a gas project is high on the legislature's priority list.  "If the price of oil went up $4-5 and we had a gas pipeline (producing about $400 million in state revenues), we wouldn't be having a fiscal gap discussion."       *     WASHINGTON -- While Northern Gas Pipelines could not monitor U.S. Senator Frank Murkowski's (Photo-below, 11-3-01) closed-door conference yesterday afternoon on the future of an Alaska gas line, his office sent us a message late in the day saying that he urged changes in pending federal legislation to make sure any future gas line reflects Alaska's needs.         Murkowski hosted the meeting with Alaska North Slope natural gas owners, national gas pipeline transmission companies, and Alaska State officials.  Attendees analyzed pending proposals in the Senate energy bill, one of which provides a federal construction loan guarantee. The working group also reviewed a proposal by the gas producers to expedite the permitting process for a pipeline construction project to the Lower 48 states.    "After this meeting, it is very clear that as we prepare to enter into a debate on energy legislation in the Senate, more work needs to be done," Murkowski said. "Everyone must remember that this gas lies beneath the State of Alaska and belongs to the People of Alaska.  We must protect the state's interests," said Murkowski.      Murkowski asserted that any legislation must explicitly bar an "over-the-top" route that moves gas to the Beaufort Sea and then down the Mackenzie Delta in Canada.  Murkowski said a ban is necessary to avoid environmental risk and to ensure that the citizens of Alaska benefit from bringing this gas to market. He believes that any gas line must go south, through the state of Alaska, to the lower 48.  To spur exploration and development, final legislation must also provide fair and open access to all gas producers on the North Slope.  Finally, Murkowski stated that Alaskans must have a strong voice in determining in-state tariffs and gas distribution.      "By making sure gas passes through Alaska, it will provide Alaskans, including Alaska Natives, access to abundant and clean energy.  Construction of the line and of a related petrochemical industry could mean 3,500 Alaska jobs, and the gas sales alone could provide the state with $22 billion in revenue over the life of the project," said Murkowski.      The Senator plans to meet with the Bush Administration to advance gas line elements in a national energy proposal.      Invitations to attend were sent to Alaska Governor Tony Knowles, who sent Alaska Commissioner of Natural Resources Pat Pourchot to attend in his place, to the Alaska Legislature who was represented by State Sen. John Torgerson, and Rep. Joe Green, to the gas owners: Exxon, BP and Phillips and to all of the transmission companies led by Foothills Pipeline, TransCanada Pipelines, Duke Energy, El Paso, Pacific Gas & Electric, Williams, Sempra and Westcoast Energy who agreed last fall to reform a 1970s consortium to participate in the transport of Alaska gas.  (Comment: "IT'S MY GAS!"                  Northern Gas Pipelines respects all elected leaders and project proponents; likewise, loyal readers know we hopelessly love fact, reason and logic.  We favor all northern gas projects, faithful that private enterprise and government regulatory process will produce the superior result.  We note the emotional good intent in words like, "Everyone must remember that this gas lies beneath the State of Alaska and belongs to the People of Alaska,"  and are anxious to find the origin of this 'fact' since 'everyone' is urged to believe it.   Several readers (i.e. producers are not among them) have asked Northern Gas Pipelines to supply the legal basis for such statements--also made by other elected leaders--as the State owns just 1/8 of the gas produced and lease documents do not stipulate a routing or prohibit a routing for that 1/8 or the remaining 7/8.  We shall continue looking.  After all, if one's lease sale terms proscribed what route he would use to move any oil & gas developed, he might well have offered lower bonus bids in the first place, forged different partnerships, or not bid at all.  We are sure documented authority or lease terms of which we are unaware exists, since contract violations could otherwise invite fairly embarrassing if not serious legal/financial implications for a state already operating with an approximate $1 billion/year deficit.    From our limited vantage point we envision progress in supporting Federal price floor* and expediting legislation; we see dangerous precedent for free enterprise investors in Alaska when government seeks to impose retroactive oil and gas lease agreement transportation route mandates (i.e. affronting 'fiscal clarity' & 'investment climate' goals.).  We'd love to see maximum, positive economic impact in Alaska and Canada; we'd also wish government not to become arrogant, thinking itself omniscient, omnipotent and socialistic enough to tell private enterprise what northern projects to build.  The argument regarding 'environmental risk' may turn out to be true; but science will tell us, not elected officials (See the NNS story below; if results are true, industry could have to modify or dispose of certain projects).  Unsubstantiated environmental risk charges regarding a fairly benign buried, refrigerated gas pipeline serve only to challenge one's credibility--except with environmental extremists--and fan fundraising flames for anti-ANWR advocates.  The permitting process will stop environmentally unsafe projects in their tracks.   Rational, due process, regulatory control of projects is the lawful system elected officials have constructed.  Emotional political rhetoric undermines deliberate, regulatory service and serves in the long run to repel what the well intended politician seeks: prosperity for his constituents, freedom for future enterprise and the rule of law.   {* A $1.25 wellhead price floor, provided by taxpayers when consumer prices are conveniently low, so substantially decreases the risk of a more expensive project that that it likely makes moot the unseemly effort required to prohibit a more efficient, politically unpopular route.  However, a price floor then embraces vast new consumer and taxpayer constituencies who will also desire the most efficient movement of Arctic gas.  One could envision a new stakeholder group organizing their own message in 2002, "My way or no way", positioning an entire nation against its largest state.        -          "Actions produce reactions."  "Experience is a dear teacher...."}   -dh)     *    Anchorage Daily News, by Liz Ruskin, Washington- ... The Foothills Pipeline Co. and its partners, who have a 25-year-old franchise to build a line following the Alaska Highway, are no longer opposed to new federal legislation the producers want that would promise speedy permitting for another applicant, meeting participants said. Until recently, the pipeline companies didn't want new laws undercutting the unique rights that Congress granted them in 1976....     *      OGJ Online, by Maureen Lorenzetti, Washington-Sen. Frank Murkowski Monday said he wants federal legislation directing North Slope producers and pipeline companies to build an arctic gas line paralleling the oil pipeline to Fairbanks and then the Alaska Highway....     *          Northern News Services, by Lynn Lau, Yellowknife - Researchers mapping the ocean floor around Tuktoyaktuk are investigating a natural phenomenon that may affect the construction of a proposed pipeline from Alaska.  Every year, drifting sea ice cuts into the ocean floor, creating gashes or "ice scours" in the ocean floor. Steve Blasco, a marine geologist with Natural Resources Canada Geological Survey, and his team are working to find out how deep those gashes run, and where they are most likely to occur.  In the first year of the five-year project, the group collected data around Richard's Island for three weeks last August. Richard's Island is the site of a potential oil drilling project. Blasco says initial data show that the gashes may run as deep as four metres....  (And here, NNS presents a roundup of chamber of commerce activities/priorities: Norman Wells, Fort Simpson, Fort Smith, & Kivalliq.)     *   Bob Schweitzer of AeroMap U.S. (Anchorage) announced his affiliate of Aero-Metric, Inc., "has been designated as an authorized reseller of DIGITALGLOBE satellite imagery.  DIGITALGLOBE successfully launched the highest resolution commercial satellite in existence called Quickbird.  Imagery from Quickbird has a panchromatic ground sample distance of 2-feet (0.61-meters) and multi-spectral ground sample distance of 8-feet."  According to Schweitzer, "This exceeds resolution offered by all previously launched commercial satellites.    This is a powerful tool for monitoring change in the oil and gas fields over time."  It could be a useful tool for emergency response and planning. 

2-4 (Update-00:21, 00:55, 01:38, 10:45, 13:36, 15:32  ET ):  Don't miss our weekend report, re:  Alaska North Slope Gas Royalty In Kind Sale Bid Proposals.         *     Northern News Services by Derek Neary, Fort Simpson  - The Deh Cho First Nations want oil and gas companies to pay them up front for the rights to conduct exploratory drilling on Deh Cho lands. It's a concept DCFN chief negotiator Chris Reid pitched to federal negotiators in Fort Simpson last week.     *     New events:  U.S. Senator Frank Murkowski met in the Capital at 2 p.m. today with gas pipeline stakeholders is a closed-door, private affair, intended to be a 'substantive meeting'.  There may be no announcements following the sessions but we will report what becomes available.       *    Senator John Torgerson has scheduled a meeting for 2-13 to hear testimony on the Department of Revenue report on state gas pipeline ownership (See our story here) and two reports DNR will release soon, on 1) gas supply and demand, and 2) gas/LNG value.  The meeting will be held in conjunction with the Senate Resources Committee at 3:30 p.m. in the Senate Finance Committee room.       *        The Minerals Management Service scoping meeting to discuss two proposed Cook Inlet Oil and Gas lease sales tomorrow evening, 2-5, 7-9 p.m., MMS 3rd Floor Conference Room, 949 E. 36th Ave.     *     The fourth annual Alaska Forum on the Environment begins today, 2/4-8, 2002 at the Egan Convention Center in Anchorage.  Contact: Vivian Kinnaird, vkinnaird@ene.com.     *   RDC meeting, Petroleum Club, Anchorage, "EPA Alaska Issues and Projects",  John Iani, EPA Region 10 Administrator, Seattle    *    John Iani, regional administrator for Region 10 of the Environmental Protection Agency (EPA), will conduct a roundtable discussion with local businesses, tomorrow.  For more information call 907, 272-2401 or contact April Jensen via email at april@anchoragechamber.org.       *      Peninsula Clarion-Rep. Mike Chenault says of a proposal to boost oil & gas industry production taxes, "That forces industry to take their dollars and look elsewhere for development, not only around the nation, but around the world,"     *    What could the Alaska Flag Song and Alaska's fiscal crisis have in common?  Former Anchorage Daily News Editor Michael Carey comments in the Juneau Empire.   *    Northern Gas Pipelines alludes to certain acquisitions and mergers directly or indirectly relating to northern projects, as now.  Northern Natural Gas (NNG), a member of the Arctic Gas Consortium in the 1970s, could be a key distributor of Arctic gas.  Last week, Dynegy exercised its rights to acquire the common equity of NNG's parent after termination of its merger agreement with Enron, through which Dynegy invested $1.5 billion to acquire preferred stock and other rights in an Enron subsidiary that owns NNG.  Author's longtime colleague, Dan Dienstbier, is president of NNG. He reports to Dynegy Inc. Pres. and COO Steve Bergstrom.   Source: Oil & Gas Journal.

2-2/3 Weekend: (Updates-Saturday, 02:26, 12:30, 18:08, 19:05; Sunday, 12:46, 15:56 ET):  Following is our report on Friday's results re:  Alaska North Slope Gas Royalty In Kind Sale Bids.  Friday, Alaska's Department of Natural Resources (DNR) announced it had received four proposals in response to its December 26, 2001solicitation, from:  Alaska Power and Telephone Co. with an address listed in Tok, Alaska (corporate offices in Port Townsend); Anadarko and AEC (joint proposal); Chevron USA; and Williams Energy Marketing and Trading.  DNR Petroleum Market Analyst Kevin Banks (Photo-right, 2-1-02) opened the Royalty In Kind (RIK) proposal announcement meeting at the Atwood State Office Building in Anchorage.  He said DNR will begin analysis of the proposals immediately.  DNR "...will be referring to the criteria that ...were listed in our solicitation," he said.  "The Commissioner then has to determine whether or not to enter into negotiations with those who have provided proposals and then to craft contracts based on the proposals."  He said that any successful contracts resulting from the negotiations will be given the Royalty Oil And Gas Advisory Board.  After review by the Board and a public review, based on comments received, a final finding will be developed and the contract(s) submitted to the Legislature for its review.  Banks recognized others involved in the process including Mark Myers, (Photo-left, 9-21-01) Director of the Oil and Gas Division of DNR, and the Deputy Director, Bonnie Robson (Photo, 10-26-01).  Other DNR professionals, Marie Crossley, Wil Nebesky (Photo-left, 11-25-01) and Andi Crippen, he said, "worked tirelessly on this project".  Banks also recognized Jack Griffin in the Department of Law.  Commissioner Pat Pourchot (Photo-right, 5-14-01), thanked Banks for his contributions to the process and said, "...we have not made any decisions to proceed...," and that DNR is taking the process, "...step-by-step, and analyzing and trying to take actions that we think are in the best interests of the state."  He said DNR will be checking with proposers to determine whether or not they wish to release the proposals to the public.  Northern Gas Pipelines has contacted the parties and will make proposals available here (i.e. check back to this 2/2/02 news item for updates) as appropriate.  First to respond was Anadarko Petroleum Corporation (Anadarko) which made a joint proposal offering with Alberta Energy Company (USA) (AEC), available for your downloading and review below.  Anadarko's Mark Hanley (Photo-right, below, 9-19-01) told Northern Gas Pipelines that: "Attached are copies of the bid proposal, an executive summary and a copy of the economic impact study done by Northern Economics.  The only thing you don't have is a copy of appendix A, which is a map defining the Foothills area where we have made the $50 million exploration work commitment. In general, our proposal guarantees the state a cash premium for its gas, makes an exploration work commitment and it encourages new gas exploration,  which if successful could mean more revenue to the state, jobs for Alaskans and substantial new instate investment."   We highly recommend readers' reviewing the Northern Economics study, especially valuable for the insight it provides on Alaska's ANS RIK gas sale process.  -dh   *       "Enbridge has made no secret of the fact that it intends to participate in any Mack Valley line, whether it be one that connects with Prudhoe Bay or a Mack Valley stand alone. Because of the Norman Wells line, it is certainly well-positioned to do so. It is also true that TransCanada Pipe Lines Ltd. (TCPL) expects to be included since any line must connect with its system in Alberta.   Any pipeline coming from the North would ultimately need to tie-in to TCPL's grid in Alberta, and any liquids produced from the Mackenzie Delta gas would be shipped through Enbridge's Norman Wells oil line.  But TCPL also has a 50% interest in the ANGTS line as you know, and are busy promoting that through Foothills Pipelines. Enbridge has been careful not to make a proposal, only suggestions. The story in Thursday's Globe and Mail about Enbridge making a proposal in a "surprise" move.... I'm glad you ran a clarification.... (See 2-1 Enbridge story below.  These comments, kindly contributed by Sunny Munroe, Far North Oil & Gas Review, Yellowknife.  -dh)     *     WASHINGTON -- Representatives of Alaska's North Slope gas producers, leading natural gas transmission companies, and state officials from the Governor's office and the Legislature will join Sen. Frank Murkowski (Photo, 11-3-01) in Washington, D.C. Feb. 4 to discuss the future of an Alaska gas line.   Murkowski in December, in advance of the Senate taking up comprehensive national energy legislation (possibly as soon as Feb. 11), asked the group to come together to discuss what the federal government can do to facilitate the project.  That meeting, to be moderated by Senator Murkowski, will start at 2 p.m., Monday, Feb. 4 in the Senate  Energy and Natural Resources Committee hearing room, SD 366.  "The purpose of the meeting is to discuss federal legislation, and potential state and commercial efforts, to enhance the economics and accelerate the delivery of Alaska gas to Lower 48 markets--while maximizing the benefits to Alaskans," said Murkowski.  He is seeking comments on the need for permitting changes, tax or financial incentives, and what, if any, regulatory or financial steps the State of Alaska can take to improve chances for the multi-billion-dollar project.  "Clearly it is in Alaska's and the nation's best interest to have Alaska's gas go by means of a southern route down the TAPs corridor and the Alaska Highway to Lower 48 markets.  I want to discuss what Congress and the state can do to help make that happen. A gasline is vital to Alaska's future. Its construction could mean 3,500 Alaska jobs, and the gas sales could provide the state with $22 billion in revenues over the life of the project," said Murkowski.  Invitations to attend were sent to Alaska Governor Tony Knowles, to the Alaska Legislature who will be represented by State Sen. John Torgerson, R- Kenai, to the gas owners: Exxon, BP and Phillips and to all of the transmission  companies led by Foothills Pipeline, TransCanada Pipelines, Duke Energy, El Paso, Pacific Gas & Electric, Williams, Sempra and Westcoast Energy who agreed last fall to reform a 1970s consortium to participate in the transport of Alaska gas.               

2-1 (Updates-01:07, 02:18, 10:49, 12:50, 13:49, 15:04 ET): See our report on "State Financial Participation in an Alaska Natural Gas Pipeline" released late yesterday at the end of this section, an important document now available for your downloading.        *     Jim Rennie, spokesman for Enbridge Inc. kindly provided Northern Gas Pipelines with this clarification of the Globe & Mail story appearing yesterday, below: "Although the bulk of the article was correct, Enbridge does not have a northern pipeline "plan" and hasn't been pitching one," Rennie said.  "We remain route neutral, and continue to work with producers in Alaska and the Mackenzie Delta to offer our experience and expertise in northern pipelines.  To that end we have provided information and some of our study work on a variety of topics, including our evaluation of an over-the-top route (yes, it is technically feasible, cost-effective, safe and environmentally acceptable), and our evaluation of a phased, twin-pipeline approach (similar capital costs, phased delivery to southern markets, more northern benefits).  We have also provided information on a variety of other topics to producers, but they don't add up to a single "plan".  Our position is as it always has been, that the producers must decide what route (or routes) will go forward, pipe size, timing, etc.  We stand ready to help."  (Please see our related report here, "Ad Hoc Surprise" {not presented by Enbridge}, and the study of a similar concept here.   -dh)   *   Globe & Mail, By Lily Nguyen, CALGARY -- Enbridge Inc. has emerged as a surprise player in the bid to bring Arctic natural gas south, with chief executive officer Pat Daniel (Photo-left) confirming the company has pitched a $15-billion (U.S.) pipeline plan to Alaska and Mackenzie Delta producers.  "We're proposing to be a builder, owner and operator of a pipeline or pipelines from the North, both for the Alaska reserves and the Canadian Mackenzie Delta reserves," Mr. Daniel said in an interview prior to a conference call to discuss Enbridge's fourth-quarter results, also released yesterday.  ...  Mr. Daniel said the company's pipeline plan consists of a single system along the so-called "over-the-top" offshore route.  The system, which would consist of two, twinned 36-inch-diameter pipes, would connect Alaska's Prudhoe Bay to the Mackenzie Delta of the Northwest Territories with a subsea pipeline running about six kilometres off the coast. Both Alaskan and Delta gas would be carried down the Mackenzie Valley to Alberta. The gas could be moved out of Alberta to Chicago on an expanded Alliance pipeline system, in which Enbridge has a 21-per-cent stake, he said.  The proposal is a rival to one advanced by TransCanada, which is pushing for a separate pipeline to move just Alaska reserves...from Prudhoe Bay along the Alaska Highway, through Yukon and British Columbia and into Alberta to hook up with TransCanada's Alberta system. Arctic Resources' Calgary affiliate, ArctiGas, is also proposing an over-the-top pipeline featuring 100-per-cent aboriginal ownership and 100-per-cent debt financing.  The producers have put forward proposals for pipelines that they would build and run themselves. The latest one from the Alaska petroleum giants -- Exxon Mobil Corp., BP PLC, Phillips Petroleum Co. and Chevron Corp. -- carries a price tag of more than $17-billion and involves a stand-alone pipeline from Alaska to Chicago.  The Mackenzie Delta producers, led by Imperial Oil Ltd., are considering building their own pipeline for about $3-billion (Canadian). It would connect the Delta to Alberta and most likely link up with TransCanada's Alberta system.  William Lacey, an analyst with FirstEnergy Capital Corp. in Calgary, said the Enbridge plan has a fair chance of success (See this related, First Energy study).   The company is perceived to have excellent relationships with the producer community, and that could give them an edge, he said. In TransCanada's corner, however, is its partnership with North America's largest pipeline companies, including Dynegy Inc. and Duke Energy Corp., he said.  ... Mr. Lacey stressed that TransCanada and Enbridge should not be considered rivals because the project is so big, it is unlikely any company wants to take it on alone.  TransCanada and Enbridge "have rival proposals but at the end of the day, could they work together? Sure they could," he said....      *     Commissioner Wilson Condon (Photo) yesterday presented a report, “State Financial Participation in An Alaska Natural Gas Pipeline” to Governor Tony Knowles and legislative leaders.  Senate Bill 158, ordering the study last year, triggered an active six months of research and drafting by Revenue Department staff and its consultants, Dave Gray of CH2M Hill and Bill Garner (Photo below, 8-13-01) of Petrie Parkman & Co.  In a cover letter, Condon said that, “financial risks to the state are substantial,” but that policy makers might consider risk secondary to Alaska exercising, “…greater control over its own destiny.”  In an understatement, Condon said that, “Alaska is a little short on cash these days—unless you go into the Permanent Fund….”   He said another option involving state issuance of tax-exempt bonds would be a mechanism requiring Federal approval.  As to issuance of bonds to cover state investment, the report says, "any over-ambitions reliance on debt to finance investment in the gasline could jeopardize Alaska's credit rating, which could have a domino effect as it raises the cost of borrowing for the state and municipalities."   Condon said the “… report sheds new light on old discussions, and serves as a reference book on the project.”   The study embraces:  1.  A comprehensive review of the history of Alaska gasline proposals.  2.  A summary of current gasline proposals and potential sponsors.  3.  An analysis of the issues of state financial participation—how much money would be needed, and where could it come from.  4.  An explanation of what could or could not work for state financing—and why not.  5.  And what are the risks of putting up state money.  “I believe our report provides you—and the Alaska public—with the information needed to make informed decisions,” Condon concluded.  The report goes on to verify that the state is in a "...precarious financial position...and is in no position to write a check for any significant investment in a gas pipeline project...."   Also see AP story by Mike Chambers, Anchorage Daily News, Juneau -- Alaska has few incentives to owning a stake in a natural gas pipeline from the North Slope to the Lower 48, a Department of Revenue report says. Declining oil revenues have left Alaska with an $865 million deficit that is projected to grow to $1.1 billion by next year. The state's Constitutional Budget Reserve is expected to be empty by 2004. The prospects of financing such a project through loans is unclear, the report says.  (Northern Gas Pipelines thanks Deputy Commissioner of Revenue Larry Persily for his cooperation and is pleased to provide our readers with a complete report, available for downloading here.  The Department completed this assignment with typical professionalism and it will be exceptionally useful to all students of northern gas pipelines.  *  Meanwhile, Alaska's  legislature is locked in the conundrum of resolving a plus/minus $1 billion/year deficit foreseen 20 years ago.  There are ironies:  One marvels that a state trying to steer clear of fiscal crisis would appropriate precious resources to study a multi-billion dollar government-funded pipeline investment.  At the same time, some state leaders are promoting new taxes and increasing dependence on an industry already relied upon for 80% of government expenses as they decry "dependence on oil income" and resist taxes on constituents.  Finally, a fiscally challenged state investigates ways of having what may be the only 'state owned' pipeline in North America, while not not enacting legislation to support companies willing to privately finance an economic gas pipeline project .  "Truth is stranger than fiction."  "Actions produce reactions."   "Experience is a dear teacher...."  -dh)     *     Juneau Empire Opinion, by Anselm Staack-Take about a third of your income and put it in a savings account. Then tell your creditors you can't pay their bills because "that" money's protected and only for free distribution to your family. Can any business or household run this way? No, just Alaska state government.  Anchorage Daily News Opinion by Mike Doogan-Johnny picks 1.4 billion apples a year, but he eats 2.4 billion apples. He makes up the difference from the Constitutional Apple Reserve. In two years, the reserve will be gone and he'll be 1 billion apples short. What should he do?