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6-17-09. Northern News Service by Guy Quenneville. The NWT and Nunavut may have suffered some financial blows over the past year, but there is still an abundance of opportunity to be had as both territories brace for future projects that will stimulate economic growth and ensure top wages. Aside from government spending and investment, the oil and gas and mining industries remain key drivers of the Northern economy. The oil and gas industry continues to wait for the Joint Review Panel's decision on the Mackenzie Gas Project, which is now expected in December. * Scandinavian Oil and Gas Coverage of Exxon - TransCanada Union. Town Hall Blog. Financial Post. * Houston Chronicle (AP). Representatives from Exxon Mobil Corp. and TransCanada will update Alaska lawmakers on their recent agreement to build a natural gas pipeline from the North Slope across Canada, feeding Midwestern markets. Officials from the two companies will meet Tuesday (June 23) in a joint meeting with the Senate Resources and Energy committees at the Anchorage Legislative Information Office. * KTUU by Rhonda McBride. "The propane is part of the huge gas reserve at Prudhoe Bay on the North Slope," said ANGDA director Harold Heinze. "We've always known it was there. It didn't warrant separately tapping it, we've been waiting for the big pipeline to come and propane would move as part of the natural gas." But the record fuel prices that hit the Interior and much of rural Alaska last winter may have moved up the time table for propane. "We're not talking about waiting for a pipeline to be built," said ANGDA consultant Mary Ann Pease. "We're talking about a resource that's available today on the North Slope." * Canadian Press. TransCanada Corp. (TSX:TRP) and ExxonMobil Corp.'s (NYSE: XOM) collaboration on a $26 billion US natural gas pipeline in Alaska is a "wake-up call" for a stagnant project in the Northwest Territories, a backer of the Mackenzie Gas Project said yesterday. "They're gaining on us by leaps and bounds here," said Fred Carmichael, chairperson of the Aboriginal Pipeline Group, which holds a one-third ownership stake in the Mackenzie Project. "That announcement should serve as a wake-up call for the Mackenzie project." (See our earlier article.) * House Majority. the joint committee hearing originally scheduled for Monday, June 15 has been rescheduled to Tuesday, June 23 in Anchorage to hear from ExxonMobil Corp. and TransCanada Corp. on their planned partnership to build the AGIA natural gas pipeline.

6-16-09. Oil and Gas Financial Journal by Roger Marks (Photo-r). In attempt to bring its vast

reserves of North Slope natural gas to market, the State of Alaska has provided inducements that may not only assure the project’s failure, it may ultimately cost the state nearly $2.5 billion. ... If only the failure of AGIA itself were the end of it, the loss of $500 million to the public treasury might only be deemed a “considerable” calamity. The ultimate public policy failure will not be the failure of AGIA. It will be the triple damages: the “poison pill” that endures. AGIA leaves the state no room for risk if it does not work. It is not unimaginable that this is what motivated TransCanada to participate: laying out $125 million for the chance to recoup $1.875 billion. So the scenarios are either TransCanada cashes in on that bet, or the state is powerless to fiscally accommodate another project, degrading the landscape for getting any gas pipeline. Either way, there is a dreadful cost to the public. (Note: this retired, senior economist for the Alaska's Revenue Department offers unique insight into the State's revised oil and gas tax structure. -dh) * Canwest News Service, by Jason Feket. Western premiers and U.S. governors on Sunday hailed their push to develop a cross-border Western Energy Corridor that will be the largest on the planet and one that develops both non-renewable and clean-energy options. Spearheaded by Saskatchewan Premier Brad Wall and Montana Governor Brian Schweitzer, the initiative could open new markets to the three Prairie provinces, which are all major energy producers in both renewables and fossil fuels. Wall, Alberta’s Ed Stelmach and Manitoba’s Gary Doer — all in Park City, Utah for the Western Governors’ Association annual conference — met Sunday with state political leaders to explore the potential for a broader energy relationship.

6-15-09. FNM by Rena Delbridge. As a high school student in Nenana, Bear Ketzler worked a couple summers for a business supplying propane to customers along the river. The clean-burning fuel was the power of choice for cooking in villages, before the years of diesel tank farms and in a place where electricity is expensive when its available. Now the city manager of Tanana, Ketzler and his community are testing propane as a possible alternative fuel for widespread distribution in rural Alaska, in tandem with the Alaska Natural Gas Development Authority. * Alaska Dispatch by Andrew Halcro (NGP Photo-l). Exxon comes along at a time when TransCanada needed a friend with deep pockets and the Palin administration needed some positive news to tell about AGIA. * Financial Post. Abundant cheap supplies of natural gas from new shale deposits, plus growing imports of liquefied natural gas flowing into the United States, push back by 15 years the need for Arctic gas and make it difficult for higher-cost gas from Western Canada to compete, says pipeline executive Steve Letwin. ... Enbridge will make a pitch to be part of the Denali project, an Alaska pipeline proposed by another group, BP PLC and ConocoPhillips, Mr. Letwin said, just to st

ay in the game, but "it's going to be a long game." * More on Exxon's joining the TransCanada ANS gas pipeline project: Alaska Journal of Commerce by Tim Bradner (NGP Photo-r). * CKTB, by Lauren Krugel, THE CANADIAN PRESS. With a US$26-billion pipeline planned for Alaska hitting an important milestone, questions have been raised over whether the Mackenzie Gas Project in the Northwest Territories will ever be needed to ship Arctic natural gas south. * Journal of Commerce by Tim Bradner (NGP Photo). It's a tough thing to say, but the days will start getting shorter soon and January is only six months away. The usual midwinter cold snap is almost surely in the cards, and the gas distribution system serving consumers and local electric utilities is likely to be strained once again. See other coverage....

6-12-09. Houston Chronicle by Tom Fowler. Exxon Mobil Corp.’s plan to work with TransCanada on a massive natural gas pipeline from the North Slope of Alaska is a significant setback for a competing project by ConocoPhillips and BP, an energy policy analyst said Thursday. * CBC News. TransCanada Corporation said Thursday it has struck a deal with ExxonMobil to develop an Alaska gas pipeline at an initial projected cost of $26 billion US. ... "TransCanada's Alaska pipeline project will connect Alaska's natural gas resource to new markets," said Hal Kvisle, TransCanada president and chief executive officer. * Hear yesterday's AGIA press conference, yesterday. * Globe and Mail by David Ebner. Exxon Mobil Corp. (73.76-0.29-0.39%) has joined forces with TransCanada Corp. (34.080.401.19%) on its $26-billion (U.S.) natural gas pipeline from Alaska to Alberta, a move that jeopardizes the Mackenzie Valley gas project vital to the development of

Canada's north. (Commentary. What "jeopardizes" the Mackenzie project is the Gordian knot of Canadian aboriginal, bureaucratic and legal hurtles that have delayed a perfectly good project. We would urge journalists not to blame Exxon whose Canadian sister, Imperial, has worked diligently to orchestrate a successful pipeline project. Imperial's Randy Ottenbreit, in particular, merits our respect. Likewise, the Inuvialuit, Gwich'in, and Sahtu leadership have been stalwart, as have Fred Carmichael (NGP Photo-l), Nellie Courtenay and Bob Reid of the Aboriginal Pipeline Group--whose realistic goal was to have gas flowing by next year. The National Energy Board and Minister Jim Prentice have faithfully executed their responsibilities, tirelessly. No, any blame for Mackenzie delay belongs not at the footsteps of industry or general government or a blameless Alaskan project. Rather, look into the chaotic, self-centered regulatory fiefdoms and aboriginal hold-outs that create seemingly endless objections, hearings and meetings in a quixotic quest for absolute consensus before a project can exit the birth canal. It is the Berger Inquiry legacy: a ghostly apparition cloaked in good intentions covering a decaying, disintegrating economic skeleton that could have been a lighthouse of leadership and prosperity in the the 21st Century North. It now appears that the Berger legacy could prevent still another generation from unshackling itself from Ottawa dependency and the pitiful, entitlement culture. Have the extreme environmental activists and aboriginal obstructionists won the prize of economic dependency and poverty and dead-end career opportunities for the Children of the North? Is the window of opportunity closed now for another generation, or, will the sheer determination of leaders like Prentice, Reid, Carmichael, Courtenay and Ottenbreit resuscitate a project for this generation? Or does all of this delay just allow a wiser, future generation to build the most economic of all projects: the single, Arctic gas project efficiently transporting Alaskan and Canadian natural gas to Canadian and American markets? -dh)

6-11-09. Platt's. ExxonMobil Corp. is in discussions with TransCanada Corp. over the Houston-based company's possible involvement in TransCanada's plan to build a $30 billion-plus Alaska natural gas pipeline, industry and state government sources said Thursday. (See the Alaska Dispatch and KTVA stories.) * The Heat Zone. Republicans in Congress have tended to support the expansion of offshore drilling in American waters, while Democrats have traditionally opposed it. As reported recently on The Heat Zone, Congress allowed an 18-year old general moratorium on offshore drilling to expire last year, and coastal reserves in the Gulf of Mexico were re-opened as well. There are still, however, a number of obstacles to the renewal of widespread offshore drilling, and how things will progress from here is a hot topic in Congress. Republicans are still pushing for more and faster domestic oil and gas development, while Democrats, although they’ve eased their opposition, want bigger price tags and new rules imposed on prospective drillers.

6-10-09. Houston Chronicle by Tom Fowler and Kristen Hays. Exxon Mobil is in discussions with TransCanada to help it build a massive pipeline to move natural gas from the North Slope of Alaska to U.S. markets, according to a source familiar with the deal. The move could undermine a competing effort by ConocoPhillips and BP. ... Scott Jepsen, spokesman for Denali, the joint venture of Houston-based ConocoPhillips and London-based BP, said Denali officials had no comment because they hadn’t seen an announcement about an alliance between Exxon and TransCanada and couldn’t speculate on what it might be. * ADN by Sean Cockerham. ... "I've heard the rumor, I don't know anything as far an any truth to it or not," said state House speaker Mike Chenault, a Republican from Nikiski, Chenault said that it could be true, since Gov. Sarah Palin told Sean Hannity on Fox News that "some really good, exciting news" was coming soon. Anchorage Rep. Mike Hawker said he doesn't have any confirmation either but heard a rumor an announcement could come as soon as Thursday morning. * KTUU by Rhonda McBride. Gov. Sarah Palin told Fox News she should have "exciting news" next week about the natural gas pipeline. Her remarks have fueled speculation that TransCanada, the company that won the state permit to build the pipeline, has reached an agreement with ExxonMobil.

SPECIAL............Anchorage Press by Eric Lidji (NGP Photo) Comment: Please read this article if you have any interest at all in South

Central Alaska. As usual, Eric has done his homework. -dh Just to get your attention, here’s the worst-case scenario: A mid-winter cold snap hits Southcentral Alaska, bringing temperatures of 20 below zero. People from the Matanuska Valley to the Kenai Peninsula turn up their heat in unison, sucking natural gas from the Enstar Natural Gas Co. distribution grid buried beneath the city streets. This network is fed by transmission lines leading back to wells that pump natural gas from underground reservoirs across Cook Inlet. As more people turn up the heat, engineers search for additional molecules of natural gas to manage the increased demand. But the cold doesn’t let up. Then, a compressor trips at one of the major gas fields, and the pressure in the pipeline system drops below the threshold needed for making electricity. So the lights go out. System operators worry the drop in pressure allowed air to get into the grid, and federal regulations require them to stop delivering to customers. So the heat goes off. ... Dave Harbour, a former RCA commissioner who wanted to approve the 2005 APL-5 contract and whose term expired before the RCA began considering the newer APL-6 contracts. Over the past six months, Harbour has spoken publicly several times about the gas situation in Cook Inlet, including a February 23, 2009 speech before a group of local energy economists where he praised the decision to approve the 2001 contract, but criticized the recent rejections. “The 2001 gas supply agreement with Union Oil Company was properly approved by a wiser commission concerned about price and near and long term supply for citizens,” Harbour said. “In their more recent APL-5 and APL-6 decisions, the majority of Commissioners have mistakenly concluded that their change in regulatory policy should result in an immediate improvement in prices and not adversely affect private investment decisions and results.” ... “We need gas sooner rather than later,” Colleen Starring, Enstar’s regional vice president, told an industry group in May 2008. “If there were another discovery in the Inlet that’s great, but we can’t wait for that to happen.” * PNA by Kristen Nelson. The Federal Energy Regulatory Commission has revised in part and confirmed in part its requirements for Kenai LNG facility reporting. * PNA. A new management plan for the Norwegian Sea bans drilling in several coastal areas but also opens some new Arctic areas for drilling, including the waters around Jan Mayen Island. The Norwegian government’s announcement of the plan raised the hackles of environmental groups such as the Bellona Foundation that oppose offshore drilling in the Arctic. “The management plan is a starting point for robust, good and balanced management of the Norwegian Sea,” Environment Minister Erik Solheim said at a press conference May 8. “The Norwegian Sea will be the cornerstone of the Norwegian petroleum industry in the years to come,” Petroleum and Energy Minister Terje Riis-Johansen said. * MORE COMING AFTER 6-11-09.

6-4-09. Comment: Yesterday, World Trade Center Alaska Executive Director Greg Wolf (NGP Photo-r, 6-3-09) introduced former Alaska State House of Representatives Majority Leader Ralph Samuels (NGP Photo-l, 6-3-09) to address the subject: "Crusin' For A Brusin'". He reviewed the 2006 voter initiative which levied on certain--but not all--cruise ship passenger lines a $50 head tax and a bevy of weighty regulations. While Samuels was ever the tactful yet effective speaker, one can conclude only after studying the initiative and its effects that a great injustice has been done the cruise ship industry and state attempts to commit economic suicide in that sector are still underway. (Check back for audio). Samuels is now Vice President of Government & Community Relations for Holland America Line. At the end of his presentation we asked his opinion on state oil and gas policy, particularly those issues pertaining to the North Slope and to the diminishing, deliverable Cook Inlet gas supplies. You'll not want to miss his answer and my guess is that you will likewise conclude that Alaska is infected with economic immaturity that can be seen as clearly in energy tax and policy matters as in cruise ship tax and regulatory policy. "I don't think a bullet line goes unless the State wants to flat out subsidize it." We have reached the same conclusion which ushers forth a question for State leaders: if several billion dollars of public monies build a "bullet pipeline" from the ANS to Cook Inlet to make the cost of gas acceptable to South Central Alaska residents, what pressures will citizens in other parts of the state put on lawmakers for pay-offs in the name of equality? Here's a new principle to ponder: huge government involvement discourages private involvement. Who wants to compete with government? If government is willing to get involved and change the rules of the game, the game becomes less predictable...too unpredictable for prudent investors. Here's another principle: if leaders have faith in the private sector, support it and at times give it incentives, that invisible hand Adam Smith described can activate itself to solve the complex web of problems too complex for simplification at the political level. If private parties know government will support and not compete with them, some could explore that very realistic possibility of South Central Alaska LNG imports. At today's natural gas/LNG prices such a temporary solution to critical shortfalls in deliverability during peak winter periods would be eminently more sensible and would not through into motion the multi-billion dollar raid on dwindling state savings accounts to subsidize a more expensive ANS gas supply option. Sometimes elected leaders try to do too much. -dh * Yesterday, the State released letter from state revenue and natural resources commissioners to Senato

r Mark Begich (NGP Photo, 4-09). "We were surprised and dismayed to read the comments you delivered at the World Trade Center Alaska luncheon concerning progress on the Alaska gas pipeline project. We must believe that you are uninformed about the current situation in Alaska regarding this project. The Alaska gas pipeline will be the largest and most complex private sector project in the history of North America. The lead time required to execute the project successfully is measured in years, not days or months. However, every day the Alaska gas pipeline project is making significant progress toward becoming a reality. That progress is the result of bipartisan actions taken in Congress and the Alaska State Legislature in the past—actions that must continue to be bipartisan into the future." KTUU story. ...more.... Comment: "Oh, dear.... -dh" * Caledonia Courier, by Rick Playfair. “People’s safety and environmental protection are our highest priorities,” Steve Greenaway, Vice President of Public and Government Affairs for Enbridge Northern Gateway Pipelines said. “Over our long history operating thousands of miles of pipelines, Enbridge has had an excellent record of safe, reliable pipeline operations. While no transportation system is completely risk-free, ruptures on modern steel pipelines are extremely rare.

6-3-09. State Press Release. Yesterday, Governor Sarah Palin (NGP Photo, 5-09) addressed a Point Thomps

on appreciation luncheon. Point Thompson will eventually provide about 1/3 of the input for an ANS gas pipeline. * Reuters by Jeffery Jones. The shifting outlook for North American natural gas supply as gas from shale deposits is developed will hinder plans to tap reserves in the Far North, the president of the Canadian Association of Petroleum Producers said on Tuesday. ... "You have to acknowledge the very different supply outlook in North America for gas has got to be a factor in, certainly, the timing at least of those (Arctic) projects," CAPP President David Collyer told the Reuters Global Energy Summit. The multibillion-dollar Alaska and Mackenzie Valley gas pipelines remain in the planning stages amid regulatory delays and high costs. * Calgary Herald by Dan Healing. Higher oil prices translate directly into higher revenue for oilsands companies -- lower natural gas prices mean lower costs for the industry that can burn through a lot of gas for each barrel produced. * Reuters. U.S. Energy Secretary Steven Chu said on Monday he believes technology can solve environmental problems associated with Canada's oil sands and that the huge nearby resource contributes to U.S. energy security. Chu told the Reuters Global Energy Summit that the balance between the environmental impact from the huge energy resource in northern Alberta and its importance to U.S. energy supply is a complicated one that will require solutions from the industry. * Calgary Herald also by Dan Healing. A proposed $3-billion liquefied natural gas export terminal at Kitimat, B.C., has signed its second tentative deal with an Asian customer, but has yet to nail down any gas suppliers. Kitimat LNG Inc. announced Monday it has signed a memorandum of understanding with government-owned Korea Gas Corp., or Kogas, under which it will buy up to 40 per cent of output--about 1.8 million tonnes per year-- and potentially take an equity stake in the project. The deal is similar to one inked with Japan's Mitsubishi Corp. in January for up to 1.4 million tonnes per year. Neither has been finalized, said Rosemary Boulton, president of Kitimat LNG, although when it was announced, the Mitsubishi deal was expected to close by March 31. ... Greg Stringham, a vice-president with the Canadian Association of Petroleum Producers, said the tentative deals are a good sign, noting many LNG export terminals have been pursued in Canada over several decades, but none are currently operating.

6-2-09. FNM. Two local residents — Kathryn K. Lamal and Brian Rogers (NGP Photo, 2-5-09) —

were appointed to the Alaska Natural Gas Development Authority on Friday by Gov. Sarah Palin. The authority, led by a seven-member board of directors, was created by a statewide voter initiative in 2002. Its mission is to develop a natural gas pipeline from the North Slope to Prince William Sound or Cook Inlet. (Note: Kathryn and Brian have a tough assignment. They will bring their valuable Golden Valley Electric Association and University of Alaska experiences to the table and participate in many meetings. ANGDA's mission has evolved more into a role of facilitating the building of a spur line to South Central Alaska, intersecting with a future mainline tracing through Fairbanks. Officially, ANGDA is focused on, "...getting North Slope natural gas to Alaskan communities as well as identifying feasible LNG opportunities for Alaska." The conundrums, however, are many. ANGDA doesn't have the Governor's or Legislature's support for building a mainline (i.e., one of the challenges of government projects is responding to multiple oversight interests who, unlike private owners, have no 'skin in the game'.). One can't build a spur line from Fairbanks until a Mainline from Prudhoe is constructed. If that is not until 2018, say, how's South Central Alaska going to access ANS gas as it runs out of Cook Inlet gas? If Enstar builds a bullet line to the North Slope after contracting with some unknown entity for some unknown gas supply, that, of course will make the greater part of ANGDA's mission moot. Then there is the question of how South Central Alaska gas ratepayers would feel about paying a pricey tariff on a long bullet line after a Main Line is built which would have offered a cheaper ANS-Fairbanks tariff? How could the Regulatory Commission of Alaska possibly rationalize allowing any new gas supply for South Central Alaska at a price higher than it has permitted Enstar during gas supply agreement proceedings over the last two years? Or will the RCA reconsider the new precedent it has established? Why should South Central Alaskans be interested in Alaska North Slope gas when a more immediately available supply of cheaper gas could exist via a new LNG IMPORT project? Isn't it possible that foreign gas from Pacific Rim tidewater locations could be cheaper than ANS gas transported to Anchorage over 800 pipeline miles? Anyway, for those who love to practice the art of discourse, a tour of duty on the ANGDA board would be a pursuit worthy of a distinguished chancellor and a dedicated utility executive. Ultimately, those who orchestrate such government projects as the Matanuska Maid Dairy, Alaska Seafood International and Federal Government ownership of General Motors have found or will find that no number of good intentions or committee meetings can replace the 'silent hand' of free enterprise. It seems we are destined to never learn that message, so determined are we to experience that message over and over again, from generation to generation. -dh) * (NOTE: The Alberta Oil Magazine story below is the most significant gas pipeline news in months, also featuring intense government involvement in that other large gas pipeline project across the border. Bob Reid, a man of indisputable integrity and gas pipeline savvy, is not optimistic about the Mackenzie project based on what I as an outsider may simplistically refer to as bureaucratic delays. Please read the article. When you do, you may note that several reasons for Bob's pessimism stem from competition from other gas sources and competition from Alaska. His distinct lack of optimism in this article flows from another concern we have in common: that of bureaucratic delay of projects. I'll go a step further than he did and suggest these delays are largely caused by a minority of local stakeholders emboldened and financed by large, outside, environmental, special interests. Those interests have shown disdain for the rule of law: seeking to discourage, delay then derail projects before the permitting process is begun...or in other cases, complete. -dh)