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Northern Gas Pipelines, (Alaska Gas Pipeline, Denali - The Alaska Gas Pipeline, Mackenzie Valley Gas Pipeline, Alaska Highway Gas Pipeline, Northern Route Gas Pipeline, Arctic Gas, LNG, GTL) is your public service, objective, unbiased 1-stop-shop for Arctic gas pipeline projects and people, informal and rich with new information, updated 30 times weekly and best Northern Oil & Gas Industry Links on the Internet.  Find AAGPC, AAGSC, ANGTL, ANNGTC,  ANGDA, ANS, APG, APWG, ANGTA, ANGTS, AGPPT, ANWR, ARC, CARC, CAGPL, CAGSL, FPC, FERC, GTL, IAEE, LNG, NEB, NPA, TAGS, TAPS, NARUC, IOGCC, CONSUMER ENERGY ALLIANCE, AOGA,AOGCC, RCA and more...

2009 LINKS: FERC Reports to Congress, 1, 2, 3, 4, 5, 6, 7....; USGS Arctic Gas Estimates; MMS hearings: RDC, Our NGP, AJOC, DH, ADN, KTUU; Enstar Bullet Line: Map and News Links; ANGDA; Alaska Energy Forum; Prosperity Alaska

2008 LINKS: Shell Alaska OCS Study; Mackenzie Gas Project EIS; Join the Alaska Gas Pipeline Blog Discussion; Governor Sarah Palin's AGIA Links; 2007 ACES tax bill links; Department of Revenue 2007 ACES tax documents;  2007 ACES tax Presentations; 2007 ACES tax news; Alaska Gas Pipeline Training and Jobs; Gas Pipeline and Economic Development; Andrew Halcro; Bjørn Lomborg; FERC's Natural Gas Website Links

WASHINGTON: Alaska Natural Gas Pipeline Act; History of H.R. 4; DOE Energy Bill Position, 6-02; Daschle-Bingaman Energy Bill (Alaska, Sec. 1236 & tax credit, Sec. 2503 & H.R. 4 Conferees), Tax Credit; See amendments, "Energy Policy Act of 2002";  "Alaska Natural Gas Pipeline Act of 2001 (Draft)" & Background Paper, 8-9-01;Alaska Legislature Joint Committee position; Governor's position; Governor's 10-Point Plan; Anadarko Analysis; U.S. Senate Energy Committee Testimony, 10-2-01 - text version;  U.S. Senate Energy Committee Testimony, 9-14-00; Report on the Alaska Natural Gas Transportation Act of 1971, prepared by staff of the Federal Energy Regulatory Commission, 1-18-01

ALASKA: 1-23-03, Governor Frank Murkowski's State of the State Speech; 2002 DRAFT Recommendations to 2003 Legislature; '02 Alaska Legislation; Alaska Highway Natural Gas Pipeline Policy Council; Joint Legislative Gas Pipeline Committee; 9-01 Alaska Models: Canadian Routes, LNG, GTL; HR 4 Story; Cook Inlet Supply-Demand Report: AEDC; Commonwealth North Investigation & Our Article; Report: Backbone; Legislature Contacts; State Gas Pipeline Financing Study; 5-02 Alaska Producer Update; Kenai: "Oil & Gas Industry Issues and Activities Report, 11-02"; Alaska Oil & Gas Tax Structure; 2-27-02 Royalty Sale Background; Alaska Gas Pipeline Office opens, 7-01, and closes, 5-02; Betty Galbraith's 1997-1998 Chronology Our copy.

CANADA: 1-10-03, "Arctic Gas Pipeline Construction Impacts On Northern Transp."-Transport Canada-PROLOG Canada Inc.-The Van Horne Institute;Hill Times Reports, 8-30-02; 9-30-02, Cons. Info. Requirements; CBC Archives, Berger Commission; GNWT Economic Impact Study, 5-13-02; GNWT-Purvin & Gertz Study, 5-8-02; Alberta-Alaska MOU 6-02; Draft Pan- Northern Protocol for Oil and Gas Development; Yukon Government Economic Effects: 4-02 & PPT; Gas Pipeline Cooperation Plan Draft & Mackenzie Valley Environmental Impact Review Board Mackenzie Valley Pipeline MOU Draft, 6-01; FirstEnergy Analysis: 10-19-01; Integrated Delta Studies; National Post on Mackenzie Pipeline, 1-02;Northern Pipeline Act;  Haida Nation v. British Columbia; Indian Claims Commission; Skeena Cellulose decision -- aboriginal consultations required, 12-02; Misc. Pipeline Studies '02

COMPANIES: Alaska Gas Producers Pipeline Team Newsletter, 7-27-01; APG Newsletter: 5-02, 7-02 & 9-02; ArctiGas NEB PIP Filing Background; NRGPC Newsletter: Fall-02;  4-02 ArctiGas Reduces Field Work; BP's Natural Gas Page; Enbridge Perspective; Foothills Perspective; Williams Perspective; YPC Perspective, 7-02

 MEDIA REFERENCE: Alaska Journal of Commerce; Alaska Inc. Magazine; Anchorage Daily News; Canadian Broadcasting Corporation; Fairbanks Daily News Miner, Juneau Empire; Northern News Services; Oil & Gas Reporter; Petroleum News Alaska; Whitehorse Star, etc.

EXTENDED CONFERENCE NEWS: Alaska Support Industry Alliance, Anchorage Chamber of Commerce Canadian Institute, Insight Information, Inuvik Petroleum Shows, International Association of Energy Economists, Resource Development Council for Alaska, Ziff Energy Group

 

LEST WE FORGET!

 

 

 

 

 

   

 

 

Northern Gas Pipelines: Please Scroll Down For July News.

 Gas Pipeline Office gets temporary quarters; sends MOU to ANS producers - July 2001

Gas Pipeline Office gets temporary quarters; sends MOU to ANS producers. The state's Gas Pipeline Office will open a temporary headquarters in early August on the 15th floor of the Atwood building in downtown Anchorage. The newly created....www.petroleumnewsalaska.com/pnarch/010738.htm  (See NGP report of office closing, Spring 2002.)

7/31:  WASHINGTON (AP-Yahoo) By Leigh Strope--The Teamsters will start airing radio ads this week in favor of drilling in the Arctic National Wildlife Refuge in Alaska. The campaign aligns the union with the Bush administration and sets it apart from much of organized labor.     *     The Edmonton Journal, by Dave Finlayson--(Aboriginal Pipeline Group forges ahead with Mackenzie Delta Project.)  ... In June, 39 N.W.T. aboriginal leaders signed a memorandum of understanding to build an alliance and come up with a business plan by the end of the year.  On Thursday, 10 representatives from Inuvialuit, Gwich'in, Sahtu, Deh Cho, Metis, Akaitcho Treaty 8 and Dogrib Treaty 11 were appointed to the working group. They will meet Aug. 25 to come up with a working plan and budget.      *     YAHOO Finance, Reuters (See O&GJ story 7/30, below)--Natural gas from the Alaskan frontier -- including the Alaska North Slope, Mackenzie Delta and Yukon Territory -- could total 45 trillion cubic feet (tcf), versus 331 tcf from the U.S. Lower 48, Canada and Mexico. ...about 12 percent of total supplies, according to a study by the Interstate Natural Gas Supply Association of America, a group that represents gas pipeline operators.  The new supplies could have a greater impact on U.S. inventory than when the Trans-Alaska pipeline (TAPS) began shipping crude oil to lower 48 U.S. consumers in the 1970s, the study said.   Three major oil companies that own reserves on the Alaska North Slope -- BP Plc (quote from Yahoo! UK & Ireland: BP.L) (NYSE:BP - news), Phillips Petroleum Co. (NYSE:P - news) and Exxon Mobil Corp (NYSE:XOM - news) -- in February formed a working group to study pipeline options. ... could decide on a route by year-end.    

WHITEHORSE – The Pacific NorthWest Economic Region (PNWER) supports the resolution on northern pipeline development put forward by Yukon Economic Development Minister Scott Kent at its annual meeting last weekend.

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Kent asked the western legislators to endorse the construction of two complementary pipelines in the North: one following the Alaska Highway to transport natural gas from Alaska and Yukon; and another down the Mackenzie Valley to transport natural gas from the Mackenzie Delta to market.  (Photo: Kent at PacCom in Anchorage, 2-14-01, story here.)

“The two-pipeline solution clearly offers northerners and western citizens in both Canada and the United States more benefits than a single project,” said Kent  “Two pipelines, one originating in Alaska and the other in the Mackenzie Delta, would create more investment and more jobs than a single project.  It would also open up new areas for exploration and development in Yukon and the Northwest Territories.”

While participating in the energy working group sessions Kent spoke about the potential for growth in Yukon’s oil and gas industry and explained the Yukon’s view on pipeline development.

“The Yukon government does not see itself in competition with the Northwest Territories for a pipeline,” said Kent. “Market demand for natural gas is sufficient to support two projects - an Alaska Highway pipeline and a stand alone Mackenzie Valley pipeline.

“Although the Yukon government supports the two pipeline proposal we believe that there are many reasons why the Alaska Highway pipeline has a significant timing advantage over other projects,” said Kent. “Some of these reasons include jurisdictional issues, multiple approvals and regulatory processes, resource availability and market demand.”

The Pacific NorthWest Economic Region solidly endorsed the resolution. PNWER is a public/private partnership represented by the Yukon and the provinces of Alberta and British Columbia as well as the states of Alaska, Idaho, Montana, Oregon and Washington.  

PNWER’s energy working group is a new group established this year to explore possibilities for a regional energy strategy in the Pacific NorthWest that promotes cooperation between interest in Canada and the US to accomplish this task.  (For more information:  ken.macgillivray@gov.yk.ca  0r  bonnie.king@gov.yk.ca at (867) 667-8905)

7/30:  ANCHORAGE, Ak. Northern Gas Pipelines (Also, see Ben Spiess, Anchorage Daily News 7/31 review)—This morning in Anchorage, Citizens for the All-Alaskan Gasline Initiative representative Scott Heyworth announced his group’s intention to establish an Alaska Natural Gas Development Authority.  In correspondence to Alaska Lieutenant Governor Fran Ulmer, he identified three primary sponsors of the initiative, including himself, Tyrone Neel and Mike Macy.

lngscott1-crop-7-30-01.pngHeyworth said the effort was modeled after Senator Robin Taylor’s proposed, SB 221.  (Photo-Heyworth with poll results)  He told of public opinion research results of a poll he commissioned from Ivan Moore Research, indicating that within the Municipality of Anchorage, of 252 responses: 26.6% favored the Alaska Highway route; 63.6% favor an LNG project with the Valdez terminus; and less than 10% having no view or other opinions.

Heyworth reported he has already secured support for the initiative from the Alaska Independent Party and the Republican Moderate Party.  He expects to achieve formal support soon from the Green Party and the Libertarian Party and is soliciting support from traditional Republican and Democrat quarters.  “It is a non-partisan issue,” he said.  “This doesn’t need to be a political issue.”

Heyworth supports a pipeline routing from Prudhoe Bay to a liquefaction terminal to be constructed in the Valdez area.  From there, a fleet of ten cryogenic tankers would transport the –265 degree Fahrenheit liquefied gas to markets in Asia and perhaps the North American west coast.    (See more background on Heyworth’s efforts at "Our Gas, Our Future")  -dh        

 (7/30, continued) Oil & Gas Journal Online, Washington, D.C.--INGAA Pres. Jerald Halvorsen said, "As natural gas continues to be the fuel of choice for North America's expanding electricity generation market, rising consumer demand, national security concerns, environmental needs, and economic competitiveness require development of gas, and delivery of gas by pipeline from the Alaskan and Canadian arctic frontier."      *       Whitehorse Star, by Jason Small--"The Yukon’s premier spoke to the prime minister earlier this week ...."  Which pipeline comes first?   An Alaska  panhandle pipeline?     *    Reader Paula Easley invites U.S. readers to make their views known on The Energy Security Act of 2001, by visiting: www.anwr.org.   HR 2436 consolidates several House energy bills. It addresses domestic production of fossil and alternative fuels, conservation and energy efficiency, and access to public lands. A floor vote on HR 2436 is expected this week.       *       Our Gas, Our Future…Anchorage press conference…Hotel Captain Cook, Today, 11:00 am…, ADT, announcing a Citizens Initiative to put a measure on the 2002 General Election ballot to create an All-Alaska Gas Project….photo-op at Division of Elections, Dimond Center, at 3:00 p.m.  …for presenting the required petition and signatures to the Division of Elections for submittal to the Lt. Governor's office.  (Information: 277-9981, Scott Heyworth) .        *        Tuesday, July 31, Semco Energy (i.e. parent of Alaskan gas company, Enstar) conference call; plug in here at 11 a.m. EDT.             *       August 2, Baranof Hotel, 4-6 P.M., Governor's Alaska Highway Natural Gas Policy Council (PUBLIC HEARING), (907) 269-0346     *      August 6-8, Colorado Oil & Gas Association’s Rocky Mountain Natural Gas Strategy Conference, Colorado Convention Center, Denver, CO. Phone: 303-861-0362.       *         September 5 - 6, 2001, Oil Sands Trade Show & Conference, Fort McMurray, Alberta: www.petroleumshow.com/oilsands       *        October 2-3 Pacific Norwest Strategies Conference, Portland, Oregon, E-Mail: gasconference@ziffenergy.com.          *        October 10-12, 2001 The Fourth Monetizing Stranded Gas Reserves (www.remotegasstrategies.com), Omni Interlocken Resort in Denver, Colorado.

28-29, Weekend News:  THE FIRST ALASKA GAS PRODUCERS PIPELINE TEA NEWSLETTER: CLICK UPPER LEFT COLUMN..  Maps below available here.  *     Anchorage Daily News: Columnist/economist David Reaume focuses on wellhead value to Alaska of competing gas pipeline projects.     *     National Post, by Alan Toulin, OTTAWA - A planned pipeline to bring huge volumes of Alaska natural gas to market in the United States -- the southernroutemap.pnglargestnorthernroutemap.png private sector enterprise ever undertaken in North America -- will cost an estimated US$15- to $20-billion and is expected to require the construction of a high-capacity pipeline from Edmonton to Chicago.  *  For the first time, a consortium of Alaska gas producers is putting a cost on the mammoth project. Previous estimates by observers had put the price tag at US$10- to $12-billion. The new figures include the cost of building the high-volume pipeline from a site near Edmonton through Saskatchewan to the distribution hub of Chicago.  *  "The project cost -- and we've started to use this for the very first time -- is somewhere between US$15- and US$20-billion for the whole ball of wax," said Curtis Thayer, a spokesman for the Alaska gas producers consortium, which includes ExxonMobil, British Petroleum and Phillips.     *     WHITEHORSE, YUKON - The federal and Yukon Liberals have kissed and made up.   Yukon Premier Pat Duncan says she is convinced the prime minister remains neutral on a northern gas pipeline route.       *     CBC, PRUDHOE BAY, ALASKA - A natural gas pipeline project that will cover thousands of kilometers from Alaska to markets in the United States will have a $15- to $20-billion US price tag, according to a published report. The undertaking would be the largest private sector project ever in North America.      *     To:  Northern Gas Pipelines The attached letter was written by James McElligot, a freshman at Harvard, who's father Mike, is a broker at my office. James was so upset by an editorial in the Crimson Tide against opening ANWR that he wrote the attached and sent it to the Crimson Tide. After reading the Crimson Tide's editorial I wrote them saying that I am a journalist and would be fired if I had written what they wrote because the first rule of journalism is to have accurate facts.  I challenged them to publish James' letter, and to their credit they did (Click above).  Chris Stephens, CCIM, Bond, Stephens & Johnson, Inc.  (Note: Click 'Reference' above, then 'ANWR' for more.)

7/27:  The Chairman of CSX Corporation gave Commonwealth North (CWN) members this morning his view of thecwngroupcrop.png U.S. economy, Alaska’s role in it and status of CSX –owned Yukon Pacific Corporation’s (YPC) Trans-Alaska Gas System (TAGS).  Chairman/President/CEO John Snow said the economy is the “weakest I’ve seen in 20 years…with the exception of energy,” but that, “...we see a brighter economic outlook for Alaska than for the Lower 48.”    (Photo right, left-right: Frank Peake, Vice President & General Manager, CSX Lines-Alaska, Snow, Former Governor Walter J. Hickel, and Jeff Lowenfels, Yukon Pacific Corporation President; Photo, below left, left-right: Lowenfels, Snow and CWN Board Chair, Nancy Bear Usera

cwn7-27-01snow1crop2.pngThe Federal Reserve’s interest rate increases prior to this year resulted in consumers buying less, Snow observed, …fewer cars and houses, which impacts corporate and industrial production.  “Even with all that, the American economy is still very strong due to our strong productivity”. The Fed’s rate reductions should again be creating better earnings in the next three quarters, he said.  Of CSX’s Alaska activity, he reported that the company is responsible for about half of the inbound containers to the state and remains committed to investments in Alaska: ports, containers, ships and rolling stock.

Paraphrasing Governor Hickel and redirecting his remarks to gas pipeline issues, Snow said, “To understand Alaska, you need to understand Asia.” . 

He said that over the years he had appreciated the Commonwealth North forum.   “Our support began with Governor Hammond appointing a blue ribbon commission co chaired by Governors Hickel and Egan.  The concept they proposed was movement of Alaska gas to Asia.”  (Note: Hickel and Egan—who is now deceased—are also cofounders of Commonwealth North.)

Snow said that since the Commission’s report, YPC has spent the intervening time productively involved in permitting the system, particularly in three categories: rights-of way, export licenses and environmental clearances.

“Thanks to the good work of Jeff Lowenfels we are very close to completing all requirements for State and Federal permitting work.” He said the concept of providing Alaska gas to Asia remains valid, serves Alaska’s interest, “has ‘Alaska’ stamped on it”, and serves the needs of the Lower 48 and the world.

“While Yukon’s TAGS project is viable and can move gas now to markets in Korea, Japan and Taiwan”, Snow said that “…if another project goes, we’re prepared to make our licenses and permits available.”

“The nature of these opportunities is that they are fleeting and can’t last forever”, he stated.  “If we don’t take advantage of this alignment of the stars, it may be a long time before such an opportunity returns.”

Then, greeted by supportive cheers and some applause, Snow asserted,  “We’ve had all the studies, reviews, analyses and legislative hearings necessary.  Never have conditions been better.  The world energy demand is outpacing supply.  The Bush administration supports energy projects.  The Alaska delegation, pound for pound, is the strongest delegation of any state in the union.” 

“We’ve gone about as far as we can go.” Snow concluded.  “It’s time for the producers, the state, the governor and legislature to seize this opportunity and commercialize North Slope gas for the benefit of citizens, the treasury and the Lower 48.  If not now, when?”

Snow then responded to questions.  Addressing current challenges, he repeated that the company had overcome the greatest obstacles, obtaining permits, and that consensus from the state and producers was needed now: “…a will to make it happen.”  He observed that some say that if the gas is not developed now, it will always be there.  “That is not an attitude Alaska should tolerate,” he said.

He said in answer to a question about state investment in a project that it could be considered but may not be necessary.  He said the important role for the state was that of a convener, or facilitator and without a will to make the project happen certain obstacles will be insurmountable.           ***

RELATED ANNOUNCEMENT:  Our Gas, Our Future…Anchorage press conference…Hotel Captain Cook, Monday, July 30, 11:00 a.m….announcing a Citizens Initiative to put a measure on the 2002 General Election ballot to create an All-Alaska Gas Project….photo-op at Division of Elections, Dimond Center, at 3:00 p.m.  …for presenting the required petition and signatures to the Division of Elections for submittal to the Lt. Governor's office.  (Information: 277-9981, Scott Heyworth)

Bellingham Herald, AP, LA PAZ, Bolivia -- It's a grandiose vision: build a $5 billion, 5,000-mile natural gas route using ocean tankers and pipelines through three Latin American countries -- and rescue energy-starved California.      *        Whitehorse Star, by Jason Small--INUVIK, N.W.T. — This community’s economy may be booming but there’s no room at the Inuvik for people moving to town.     *       San Francisco Chronicle, by Bernadette Tansey--Six months after Californians were stunned to find their winter heating bills soaring by hundreds of dollars, energy companies are moving ahead with plans to build pipelines into the state that could lead to a flood of cheaper natural gas and give consumers a break.     

7/26:    CBC, EDMONTON, ALBERTA - Official ceremonies are being held today in Edmonton to celebrate the construction of a new drilling rig that will be used near Tukoyaktuk this winter.     *      Northern News Services, Yellowknife - The Coast Guard ship CCGS Nahidik will head north July 30 on a three-week mission to study the ice and sea bed of the Beaufort Sea, a move that would make way for the "over-the-top" route of the proposed natural gas pipeline....  Nahidik's trip brings a welcome sign of federal government support for the Mackenzie Valley pipeline, said Northwest Territories Premier Stephen Kakfwi.        *        North Slope oil field discovery: Phillips Petroleum Company and Anadarko Petroleum Corporation;john_snow-crop.png Anchorage Daily News version of company news release below, 7-25.     *       Whitehorse Star--Whitehorse learns from Inuvik what natural gas fuel can mean to a northern community.  PLAN AHEAD:  July 27, CSX Corporation (majority owner, Yukon Pacific Corporation; owner, The Greenbrier Resort), Chairman/President/CEO John Snow (Photo-right) will address Commonwealth North, Hotel Captain Cook, 276-6350.        *        Tuesday, July 31, Semco Energy (i.e. parent of Alaskan gas company, Enstar) conference call; plug in here at 11 a.m. EDT.             *       August 2, Baranof Hotel, 4-6 P.M., Governor's Alaska Highway Natural Gas Policy Council (PUBLIC HEARING), (907) 269-0346     *      August 6-8, Colorado Oil & Gas Association’s Rocky Mountain Natural Gas Strategy Conference, Colorado Convention Center, Denver, CO. Phone: 303-861-0362.       *         September 5 - 6, 2001, Oil Sands Trade Show & Conference, Fort McMurray, Alberta: www.petroleumshow.com/oilsands       *        October 2-3 Pacific Norwest Strategies Conference, Portland, Oregon, E-Mail: gasconference@ziffenergy.com.          *        October 10-12, 2001 The Fourth Monetizing Stranded Gas Reserves (www.remotegasstrategies.com), Omni Interlocken Resort in Denver, Colorado. 

7/25:  ANCHORAGE, Alaska, July 25, 2001 --- Phillips Alaska, Inc., a wholly owned subsidiary of Phillips Petroleum Company [NYSE: P], and Anadarko Petroleum Corporation [NYSE: APC] today announced the discovery of and test production from a satellite oil field near the newly developed Alpine oil  field on the North Slope of Alaska.  The Nanuq accumulation is estimated to contain more than 40 million barrels of gross recoverable reserves.      *          NEWS RELEASE--Anchorage, Alaska Foothills Pipe Lines Alaska Inc., on behalf of the Alaskan Northwest Natural Gas Transportation Company partnership (ANNGTC), has signed a Memorandum of Understanding with Alaska to complete its review of ANNGTC’s previously filed right-of-way lease application for the construction and operation of the Alaska Highway Pipeline (See Weekend report, below re: Foothills testimony.).        *          CBC, Washington, D.C.--Shirley Neff (energy advisor to the Democratic Caucus of the U.S. Senate) says that...environmental opposition to the 600-kilometre sub-sea component of the "over the top" route, just about seal(s) the Northern route's fate.     *      YELLOWKNIFE, N.W.T & WHITEHORSE, YUKON - The premier and MLAs of the Northwest Territories applauded Prime Minister Chrétien’s support of a Mackenzie Valley pipeline in the Legislative Assembly yesterday....  Meanwhile, the Yukon's official opposition says the prime minister's endorsement of the route through the N.W.T is bad news for the Yukon.        *        Houston Chronicle, Michael Davis--OPEC ministers are weighing a plan to pull as much as 1.5 million barrels per day from the market within the next two weeks, a move some say would be a rush to correct a market that is not that out of whack.         *       Northern Gas Pipelines can now provide these new, recent speeches and presentations: PowerPoint: John Goll, U.S. Minerals Management Service's Alaska Regional Manager: "The Alaska Natural Gas Pipeline: Right of Way Planning for an Offshore Route" (Obtain 7-17-01 presentation here); further North Slope Citizen Testimony on offshore vs. overland gas pipeline routes (Arnold Brower Jr., Edna Ahgeak MacLean, Rex Okakok, Sr.), available here.

7/24: CBC, Washington, D.C.-- "If you have that pipeline immediately offshore from the refuge then they will use that as a further argument about let's go ahead and develop the Arctic Coastal Plain," the Natural Resources Defense Council's Chuck Clussen says.  (Comment: This forum supports reasonable development of Northern gas provinces and sensitive exploration of the small section of ANWR set aside for that purpose.  We support a factual approach to these issues and discourage emotional arguments and the use of myth to propagate support.  Environmental soldiers are weighing in, combining ANWR and pipeline issues, as our editorials have predicted would happen, with well intended Alaska lawmakers attempting to legislate denial of the Northern Route before all facts are known.  This will ultimately work against their well-considered ANWR positions.  While this forum is honestly neutral on all gas pipeline routes/modes, it has always supported stakeholders making their positions known, then finally coming together by compromise after all the research and facts are on the table.  We laud the stakeholder testimony occurring throughout Alaska and Canada (i.e. see important North Slope and Legislative testimony below, and June-July Archives), believing it will appropriately affect the decisions of project planners and regulatory agencies.   We have discouraged legislation circumventing free market, diplomatic and regulatory 'due-process' outcomes believing it has the potential to delay any gas pipeline project and produce other unintended effects (i.e. Canadian-U.S. tensions, ANWR delay).  P.S.  In the CBC story above, one highly respected lawmaker is quoted (hopefully, incorrectly) as saying, "One wonders how you would gain access to a spill unless it takes place in the short summer you have...."  While it is reasonable to question how a buried natural gas pipeline fracture, under winter ice, would be repaired, natural gas (a gas, not a liquid) does not "spill".  The erroneously frightening specter of a 'gas pipeline spill' adjacent to ANWR spawns another myth which will surely provide new talking points to those designing extremist, mass mail fundraising pieces.    -dh             *       Houston Chronicle, AUSTIN-AP -- Pipeline operators will save billions of dollars under a rule negotiated with federal regulators....          *               Richard Gleeson, Northern News Services, Yellowknife  -  (i.e. regarding ARC's  'Northern Route' proposal) If it looks too good to be true that's because it is, said Finance Minister Joe Handley of the 100 per cent pipeline ownership offer gaining support among aboriginal groups…. "We can finance this project in exactly the same way as an infrastructure project -- 100 per cent debt secured by the revenues from the natural gas being transported," (Harvie) Andre said….    *           Note: Yesterday, Science Magazine contacted Northern Gas Pipelines for map information; today we heard from Congressional Quarterly requesting routing information, also available to you HERE with maps from virtually every other project office as well.

7/23:   By the OGJ Online Staff, HOUSTON -- Natural gas prices dipped below $3/Mcf Thursday as oil futures also continued a downward spiral on the New York Mercantile Exchange.  The August contract for natural gas dropped 14.8¢ to $2.94/Mcf on the NYMEX. The last time a near-term natural gas contract closed below $3/Mcf was for April 2000 delivery (OGJ Online, July 17, 2001).    HOUSTON -- Energy Sec. Spencer Abraham said despite easing concerns about prices and supplies, the US still faces a significant energy crisis.     *     Dave Sullivan, Northern News Services, Fort Simpson - The Department of Indian and Northern Affairs wants to expand its presence in the region….The oilpatch activity is mostly taking place in southern parts of traditional Deh Cho territory near Fort Liard, but political leaders expect exploration to work its way toward Fort Simpson.     *     Houston Chronicle-Bloomberg: More details on Prime Minister Jean Chrétien's pipeline position.       *     CBC, CALGARY - A leading advocate of the Mackenzie Valley route for a northern natural gas pipeline is pleased with Prime Minister Chrétien’s endorsement of that path.

7/21-22 (Weekend): Alaska State Legislature, Joint Committee on Natural Gas Pipelines Hearings, 7-17/18 (Continued report using notes, not transcripts; see full agenda here.  While the author endeavors to produce accurate reports, he encourages all persons and offices named in this and other articles to provide additions/corrections to ensure the validity of the record herein.  -dh).

William G. Britt Jr., Alaska State Pipeline Coordinator, Joint Pipeline Office,  addressed the Committee on "...the status of gas pipeline right-of-way applications."   Britt reported a rather active interaction with Yukon Pacific Corporation's Trans Alaska Gas System, Foothills' Alaska Natural Gas Transportation System, the Alaska Gas Producers Pipeline Team, the Sponsor Group's Alaska North Slope LNG Project, and BP's prototype gas to liquids plant at Nikiski, now under construction.  "My office has had very limited contact," he reported, "with the Port Authority (LNG route-Valdez), the Cook Inlet Terminus Group (LNG Route-Nikiski) or the Municipal Energy Resources Group (northern overland route advocates)."  Currently, this is the most complete public overview of all active, Alaska gas projects, an excellent six page reader for veterans and new pipeline students as well (Obtain your copy here).    

7-18joekencrop.pngThe Alaska Gas Producers Pipeline Team (Contact information, here) is managed by three executives: Joseph P. Marushack (photo, left; See 5-17-01 Story), Vice President, ANS Gas Commercialization for Phillips Alaska, Inc.; Ken Konrad (photo, right, See 6-13-01 Story), Senior Vice President, Business Unit Leader Alaska Gas for BP/AMOCO and Robbie Schilhab (See 5-17-01 story),  Alaska Gas Development Manager for ExxonMobil.  Together they manage the work of 90 company employees and almost 500 contract employees, “fully engaged in a joint program to evaluate and progress a large, modern pipeline from Alaska to Canada and the Lower 48 states”.  Konrad and Marushack delivered the update, saying it is premature to preclude any routing options at this point and that it is unclear whether there is an economically viable project.  Their studies remain focused on the “Seven Lenses of Evaluation”: Economics, Environment, Gas Access, Jobs, Revenues, Safety and Timing.  Marushack briefed the committee on organizational structure indicating their goal of completing work and filing an application with the FERC is still "...within three months...” of their year-end schedule.  He added that most of his time was now being devoted to governmental relations activity and that due to complexities encountered anticipated spending more than the $70 million originally budgeted.  Both speakers indicated a preferred route had not been identified, but Konrad said that though analysis had revealed little in-state demand for gas, the Team was looking at "creative ways" of providing gas for in-state use regardless of the route chosen.  He said studies encountered issues unique to each route: frost heaves, earthquakes, etc. with the southern route, and ice forces, etc. for the northern route.  One of the great uncertainties, he said, is the regulatory process, citing numerous Federal and state agencies in both countries, as well as thousands of landowners.  Regardless of the route chosen, a conditioning plant (i.e. carbon dioxide, etc. removal) will be required on the North Slope and a natural gas liquids removal process downstream.  "New technologies," he said, "could reduce (conditioning plant) project cost significantly," he said.  Konrad cited potential records for the project: "largest sealift in the history of the North Slope; thousands and thousands of truckloads/barge loads of pipe; largest carbon dioxide plant in the world."  Marushack emphasized the importance of government "engagement", one objective being to have key terms understood prior to the "January Legislative Session."  Some of the key terms include "valuation clarity, pipeline vs. producer issues, pipeline Ad Valorem certainty, gas take-in-kind and nomination process, project risk and long-term certainty.  He advocated a "transparent pricing" policy, simplification of common royalty/severance/wellhead price methodologies.  Rep. John Davies expressed interest in "multiple opportunities" for taking of liquids for small-scale operations in different locations.  Marushack responded that generally NGL use is centralized in large facilities.  Davies asked if the producer team had considered state ownership.  Marushack said that while the issue had not come up, "The state of Alaska is our partner and we are willing to consider that."  In response to questions about 'open seasons' for determining shipper allocation of throughput Konrad noted that the open season must be completed before filing the FERC application and Marushack added that an "expansion open season" could occur later.  Senator Don Olson (Photo, left to right: Olson, Ogan, Green, Torgerson) asked for an opinion on state involvement in the gas 7-18legis3.pngproject, adding as a "small businessman" that he was not sure he would wish the state to be involved in his business.  Marushack replied that it is not a matter of the project needing state equity, but if state involvement could move the project along it could be helpful.  Rep. Scott Ogan noted that after reducing the state budget by about $250 million over the last several years the budget is now increasing and did that cause concern.  Konrad observed that a balanced budget and sense of stability "would help a lot".  Marushack added that a huge budget deficit down the line could cause changes which would be, "frightening".  Rep. Joe Green asked if the producers would support someone else building and operating the pipeline.  Konrad replied that if someone else wished to build and operate the line that could "be a good thing".  Rep Hugh "Bud" Fate asked about FERC communications, specific questions the pipeline team may be asking re: the northern or southern route.  Marushack said that various team members are coordinating with all relevant agencies, that the questions are focused on general requirements.  Fate asked about specific manpower requirements.  Konrad said that operating a buried gas pipeline is less labor intensive than an oil pipeline.7-18jeffa.png   (Presentation provided as a public service, here, 5-18-01)

Jeff Lowenfels (Photo-right), President & CEO of Yukon Pacific Corporation (YPC: History, in progress), briefed the committee on the history and current status of the Trans-Alaska Gas System (TAGS).  He identified TAGS Permits and Authorizations, including: a "Presidential finding approving the export of gas; project-wide and site specific final EIS; 800 miles of rights-of way; DOE authorization for North Slope gas export; FERC final EIS and site license; and NPDES air permit for the Anderson Bay LNG site.  He suggested several acceptable variations of the TAGS project, including a "Y-line to Valdez from Delta Junction," in combination with an Alaska Highway project.  Lowenfels recounted advantages of an LNG project, including portability and service of multiple markets, diversity of supply, security of long term contracts and use of existing permits.  Chairman John Torgerson inquired about how the competition of new Russian Far East natural gas supplies to Asia affect the economics of Alaska LNG.  Lowenfels replied that such a project "nibbles away at Alaskan LNG opportunity" (See Russian Story in Archives, BELOW).  When Torgerson asked about YPC's major challenge, Lowenfels said it revolves around the producers' decision to pursue an LNG project (See Steve Alleman report below).  Torgerson asked if a commitment of the state's royalty share would be sufficient to support a TAGS project; "No," Lowenfels replied, "the state's royalty share is not enough....” Lowenfels reviewed a YPC letter given earlier to the Governor's Alaska Highway Natural Gas Policy Council.  The correspondence states that a confidential report prepared by Purvin & Gertz, Inc. (P&G), entitled "Alaskan Gas Development Strategies", provided Governor Knowles and his staff with numbers which, had they been "true numbers", might have led to another conclusion.  Natural Resources Commissioner Pat Pourchot said later that while the P&G report was considered, it was only one of a number of references considered when the Administration's routing position was adopted. (Obtain Lowenfels' PowerPoint presentation here).

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John R. Ellwood, Vice President, Engineering and Operations of Foothills Pipe Lines Ltd. (Photo-middle, See 7-11 story, BELOW and history, in progress) was joined by representatives of Foothills' owner companies: D. Michael G. Stewart, Executive Vice President, Westcoast Energy Inc. (Photo-right), and Dennis McConaghy, Executive Vice President for Gas Development, TransCanada PipeLines, Ltd. (Photo-left).  Stewart and McConaghy also hold the title, Co-Chief Executive Officer, Foothills Pipe Lines Ltd..  Their presentation reviewed the organization of Alaskan Northwest Natural Gas Transportation Company (NNGTC), the entity operating in Alaska and owned by TransCanada and Foothills.   The officials believe the Alaska Natural Gas Transportation System (ANGTS, using the same general highway routing as one of the routes being researched by the Alaska Gas Producers Pipeline Team), could be best executed by their project due to their having already obtained rights-of-way on Federal and state lands, FERC and NEB certificates, US Corps of Engineer 404 permits, Yukon rights-of-way and British Columbia Map Reserve.  They said they have signed a Memorandum of Understanding with the Joint Pipeline Office, are working to finalize state land rights-of-way and coordinating with government officials in both countries, aboriginal communities, potential shippers and the gas producers.   They suggested that South Central Alaska demand could be delivered via a 16-inch spur line connection near Fairbanks, "...whenever it is economic to do so."   Chairman Torgerson inquired about Canadian views described earlier by CERA witness Ed Small (report below).  Stewart said there was some negative sentiment in Canada following passage of SB 164, describing it as "bristle and noise and somewhat irrelevant".  Referring to Premier Klein’s “pound of flesh” statement, he described it as a way of engaging the issue and indicating the Premier's desire to be involved in the discourse.  Representative Davies recalled producer opinions that construction of both projects (i.e. separate ANGTS and Mackenzie Delta-only lines) at the same time would tax manpower and equipment resources.  Ellwood concurred saying it would be far better for the large projects to occur in sequence.  Davies asked about the status of Foothills' relationship with the producers.  McConaghey replied that "We have been trying to effect more collaboration to help expedite their route selection...."  (Obtain complete PowerPoint presentation here.)

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Phillips Petroleum Company executives Steve Alleman (photo-right) and George Findling, briefed the committee (History, in progress).  Alleman is assigned as Commercial Manager for the Alaska North Slope LNG Project, or Sponsor Group, consisting of Phillips, BP Exploration Alaska, Inc., Foothills Pipe Lines, Ltd. and Marubeni Corporation. The focus of earlier work, Alleman said, "...was to innovatively redesign a smaller, market entry project where costs could be deferred and overall risks reduced....” Alleman agreed with sentiment that "...the East Asian market is very interested in Alaska LNG."  The critical question, he said, is "Under what conditions would the market move from interest in Alaska LNG to commitment to purchase?"  Due to many LNG projects "fiercely competing" for Asian markets, Alleman concluded "Alaska is not yet cost competitive with the majority of those other LNG projects....” Alleman said that at this stage of development, the Sponsor Group is working on commercial and technical ways to reduce costs and risks, expecting to complete that work by year-end and within their $3 million budget.  He added that the Group is also "evaluating synergy around sharing facilities with a southern route, lower 48 pipeline" and indicated the Group would also "develop an overall permitting strategy for expeditiously moving forward with either the Nikiski or Anderson Bay route and site" when market conditions permit initiation of a project.  Chairman Torgerson asked if the partners in the study would be partners in a project.  Alleman said that while that issue hasn't been settled, there were a number of investment options for participants, including ownership in the pipeline, liquefaction/port facilities, LNG tankers, etc.  (Testimony available here.)

7-18authority3.pngThe Alaska Port Authority (History, in progress) was formed by Valdez, the Fairbanks North Star Borough and the North Slope Borough for the purpose of creating jobs and providing income to Alaska and her communities via a tax-exempt gas pipeline extending from Prudhoe Bay through Interior Alaska to Valdez.  Attorney Rigdon H. Boykin (photo-middle), Bechtel Pipeline Project Manager Brent P. Sherfey (photo-right) and former Attorney General/Fairbanks Attorney Charlie Cole briefed the committee and were accompanied by the Authority's Vice Chairman, Dave Cobb (photo-left in jacket, with Fairbanks North Star Borough Mayor Ronda Boyles and Senator Torgerson).  Cole stated that the original concept was ownership and operation of a gas pipeline, in which 7-18-01johnrondadave.pngrevenue would be apportioned to the State (60%), to Alaskan communities (30%), and to the Port Authority (10%).  Mission would be to enable development of ANS gas to maximize benefit to all Alaskans.  Their consultants have completed cost and base case studies, leading the Authority to now conclude that supporting a “Y” line concept (connecting with an Alaska Highway project) will enhance economies of scale.   (A copy of the presentation is available here.)  In the question period, Boykin responded to Representative Ogan that the project would not be subject to FERC regulation.  Senator Pete Kelly inquired of any municipality owned interstate pipelines elsewhere, "not regulated by FERC".  Boynton said there were two small projects of which he was aware.

Kenai Peninsula Borough Mayor, Dale Bagley (photo, w/ Fairbanks North Star Borough Mayor Ronda Boyles), assisted by Borough Business Development Manager, Jack Brown, briefed the committee as Chairman of the Cook Inlet Pipeline7-18mayors.png Terminus Group (History, in progress) advocating an LNG project terminating in Nikiski.  (Full presentation available here.)   He said that the "Midwest/Canadian gas pipeline is becoming more likely every day," and that "If the instate LNG pipeline is built along with the Midwest pipeline, both projects can share costs from the North Slope to Fairbanks, making both projects more economically feasible."  Representative Ogan suggested that the earlier Sponsor Group presentation sounded somewhat "pessimistic", and Bagley expressed hope that the Group will ultimately "find it economic to put LNG facilities in Kenai."

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External Affairs Vice President, Jeff Cook (photo-left) announced the arrival of Diane PrierPresident of Williams Alaska Petroleum CompanyCavan Carlton (photo-middle), Williams' Arctic Project Team Director is joined by Wayne Buck, Manager-Regulatory, Government,  and Community Affairs (photo-right).  Carlton described the new Williams Arctic Project Team, covering several disciplines, with offices in various U.S. and Canadian locations.  He reinforced Williams Management's commitment to Alaska and the gas project (See 5-25-01 Archive story) emphasizing Williams' role in the industry as the "second largest pipeline company in the U.S.", which on an average day supplies about 20% of the country's gas demand and is the largest natural gas liquids processor in the U.S..  The company owns $32 billion in assets and employs 14,000 employees, about 500 of whom are in Alaska.  Williams Alaska refines 200,000 barrels of oil per day at its North Pole refinery, operates a terminal at the Port of Anchorage, owns an interest in the Trans-Alaska Pipeline and pays over $12 million in state/local taxes.  Following that impressive introduction, Carlton spoke of the importance of the company's core values and beliefs then addressed North Slope gas.  Arctic gas is needed to meet a 4-9 BCF/day shortfall by the end of this decade, when demand could grow from about 23 TCF/year to 30 TCF/year.  He emphasized that "the Alaska Highway Route is the best way to move North Slope gas to market" and said the company is analyzing opportunities for in-state gas use, including local municipal access, commercial & industrial use, gas-fired power generation, LNG & GTL.  He said the company is researching feasibility of petrochemical development in the state.  Representative Davies inquired about Williams' interest in joining the pipeline project.  "Our view is that this is an option," Carlton said, "this project needs at least one strong U.S. and one strong Canadian pipeline company."  As to Davies' interest in smaller scale projects for using gas liquids, Carlton observed that "you likely would look at existing infrastructure in Alberta and British Columbia...which doesn't exclude a smaller plant upstream."  Representative Green referred to a statement in the presentation, "All long-haul natural gas pipelines in North America are owned & operated by pipeline companies;" Carlton verified that "all existing, new and expanded long-haul gas pipelines in North America are owned and operated by pipeline companies," and, he said, "We are extremely eager to take a key position in the construction, operation and ownership of an Arctic gas pipeline project."  Representative Ogan inquired about Arctic project ownership and Carlton said that Williams was positioning itself to provide additional value to the project, but that no project will be built unless the producers are supportive.  "The financial strength and risk management skills of Williams, combined with our physical strength and operational expertise, are powerful resources," Carlton's presentation concluded.  (PowerPoint presentation available here.) 

John Goll, U.S. Mineral Service's Alaska Regional Manager (Obtain 1-01 MMS presentation, "Prospects for Development of Alaska Natural Gas: A Review", Kirk W. Sherwood & James D. Craig)

NYT: Natural Gas Supplies Down, Drilling Up.    TORONTO STAR, by Bruce Cheadle, Canadian Press, GENOA, Italy--Prime Minister Jean Chrétien told U.S. President George W. Bush yesterday he preferred a single pipeline project in the Pacific Northwest-making it clear hefranulmerportrait.jpg supported the Mackenzie Valley proposal (ANCHORAGE DAILY NEWS, AP story.).  Meeting Follow-up: In wake of the Thurday gas pipeline council meeting in Barrow (i.e. full report below, 7/20), Lt. Governor Fran Ulmer (Photo) told Northern Gas Pipelines that:  "The testimony was unanimous in support of the highway route and in opposition to the over the top route. Several reasons were offered," she continued, "including concerns about subsistence and the impact of off shore development on migrating bowheads and belugas. Other issues included access to the gas for local use and development, and tax base for municipalities.  Many thoughtful statements were offered by residents of Barrow and  surrounding villages.  Several made it clear that if the partnership between the people who live on the North Slope and the oil and gas industry is to continue, the route for Alaska's natural gas cannot include a  pipeline under the Beaufort sea."

7/20:  Today’s continuing reports on this week's Alaska State Legislature’s Joint Committee on Natural Gas Pipelines hearings, important as they are, will be deferred until the weekend in favor of significant events occurring yesterday in Barrow at a scheduled meeting of the Governor’s Alaska Highway Natural Gas Pipeline Policy Council (See Ben Spiess' Anchorage Daily News story; also refer to the Council committee meeting, below)

“A Significant Day in the Life of Northern and Southern Gas Pipeline Routes...and perhaps ANWR”

Governor Tony Knowles did not name the “Alaska Highway Natural Gas Pipeline Policy Council” without design.  While the Council has courteously—and one might say—patiently, listened to virtually all project proponents in its community meeting schedule covering the state (See schedule here), the declared objective has always been to build momentum in support of a Southern pipeline routing along the Alaska Highway.  At no time in the Council’s 5-month history has evidence of that intent and growing momentum been clearer than at yesterday’s meeting in Barrow. 

Four citizens gathered in the Anchorage conference room of the Governor's office in the Atwood Building, as lucid and heartfelt presenters painted a picture for us of what appeared to be a large audience gathered in the North Slope Borough Assembly chambers in Barrow.  We quietly watched the speakerphone on a polished conference table as the drama unfolded before us in a Technicolor movie focused on the screen of our own imaginations...and the conference operator professionally verified that Anchorage was plugged in, then Atqasuk, Anaktuvuk Pass, Kaktovik, Nuiqsut, Point Hope, Point Lay.

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Co-Chairman Frank Brown (Photo-Brown, left, touring Phillips' LNG facilities at Nikiski with host, George Findling, during 5-17-01 Council meeting in Kenai), a retired Arco executive familiar with the Alaskan Arctic and her people gently opened the meeting, asking everyone to devote a moment of silence to the memory of Rosemarie Maher, a Council member and recently deceased President and CEO of Doyon Ltd., the Fairbanks-based Alaska Native Regional Corporation.  In a resonating southern accent, Brown warmly thanked the North Slope Borough, Arctic Slope Regional Corporation’s Jake Adams and former state Senator Al Adams (Council Members) for helping to facilitate the meeting.  He thanked Governor Tony Knowles and Lt. Governor Fran Ulmer for their attendance and asked them to speak. 

Knowles again thanked the group’s hosts, then settled into his message.  He recognized the leadership North Slope residents have shown through their support of economic development balanced by protection of the environment and subsistence lifestyle.  "The North Slope is ground zero for oil and gas development," knowles said.  "The Inupiat people of this region strongly support jobs, schools, and sewer systems that oil and gas production brings ....  They are also fierce protectors of whales, sea mammals, and a subsistence way of life.  That's why they support the Alaska Highway route and adamantly oppose the risky gamble of a pipeline into the Arctic region."  Ulmer referred to her May visit in which hunters escorted her out on Beaufort Sea ice to witness subsistence landings of two Bowhead Whales in the same day.  Yesterday she visited municipal utilities, including the natural gas plant.  She said that there are lessons all Alaskans can learn from North Slope residents on “how the state can balance a subsistence lifestyle with resource development.”

Natural Resources Commissioner Pat Pourchot offered the official state pipeline presentation, saying that the “purpose of the Administration” is to move gas along the highway while making use of the gas in Alaska and achieving other benefits.  (See full presentation here.)

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Brown introduced North Slope Borough (NSB) Assembly President, Molly Pederson (Photo-right, 7-19-01, by Noe Texeira), speaking for Mayor George Ahmaogak, now attending International Whaling commission meetings in London. She spoke of  NSB, "...partnership with the state and the industry", balanced by "...adequate protections for the land and the wildlife...."  In a quiet but forceful voice, she told of North Slope citizen support for ANWR efforts.  "The (ANWR) lobbying effort has demonstrated that our people get a very warm reception from Congress," she said.  "...because we have an agenda that extends beyond oil income...and because we deliver the most powerful response to the Gwich'in, who are among the environmentalists' most potent weapons".  She moved to the subject of the day.  "We bring the same attitude of partnership to the issue of gas development....By using the existing pipeline corridor instead of the Beaufort Sea, the highway route makes the most environmental sense....we increase the potential for in-state use of gas....gas production and transportation down the existing pipeline corridor...will help to sustain our tax base...."  (Full text available here.)

(See Balance of this story on the Pipeline Policy Council Page, here.)

7-19:  WASHINGTON, D.C. - Alaska Congressman Don Young today announced an amendment was agreed to in the House Energy and Commerce Committee's energy package that would prohibit construction of a natural gas pipeline taking a northern route through Alaska and into Canada.  The amendment was introduced by Chairman Billy Tauzin (R-LA), on behalf of Rep. Young, during the Energy and Commerce Committee's markup of the "Energy Advancement and Conservation Act of 2001."  The amendment states "No license, permit, lease, right-of-way, authorization or other approval required under Federal law for the construction of any pipeline to transport natural gas from lands within the Prudhoe Bay oil and gas lease area may be granted for any pipeline that follows a route that traverses (1) the submerged lands beneath or the adjacent shoreline of the Beaufort Sea; and (2) enters Canada at any point north of 68 degrees North latitude."

Today in Barrow, full Alaska Highway Natural Gas Policy Council meeting/public hearing.  NY Times--After a heated debate over the drilling provision the House Resources Committee voted 29 to 19 to kill a Democratic amendment to ban exploration in the Arctic National Wildlife Refuge.  LOS ANGELES, July 18 — After months of warnings about power shortages and forced blackouts… California … has so much electricity on its hands that it is selling its surplus into a glutted market.   CBC, YELLOWKNIFE, NWT--The Deh Cho First Nations want in on talks designed to streamline environmental approvals for a Mackenzie Valley pipeline.  Breaking News, 12:30 p.m. A.S.T.: Responding to increased industry interest in North Slope natural gas, Gov. Tony Knowles announced today that the state will add additional North Slope Foothills area wide oil and gas lease sales to its 2002 to 2006 leasing schedule, to be released next January (See 5-01 lease sale story, archives).

Alaska State Legislature, Joint Committee on Natural Gas Pipelines (Continued Report, with more to follow tomorrow and this week-end).   Natural Resources Commissioner Pat Porchot, in his presentation, provided7-17-01chairmen2crop.png the three “Primary Objectives” the state should achieve in the course of commercializing its gas: income to the state and municipalities; benefit to Alaskan citizens; and, benefit to state businesses.  He provided an example of a state ‘Royalty-in-Kind’ sale to a company like Netricity (See our May 14 story, archived here); while potential income to the state under 7-17-01spiess2.pngsome scenarios could be modest, the benefit of encouraging development of an Internet data center, with associated construction, permanent jobs, property taxes and pre-pipeline gas sales could satisfy state criteria.  (Obtain presentation here.)  Photo above: Committee Chair, Sen. John Torgerson-right, and Vice-Chair, Rep. Joe Green.  Review the Committee's official news release reporting outcome of the hearings; and Ben Spiess' Anchorage Daily News report (Photo-left: Spiess is one of the most experienced journalists covering Arctic gas pipeline news and events; also refer to journalist Tim Bradner's work here.)

One of the most intriguing presentations of the two-day meeting came from Department of Revenue Economist, Roger Marks.  Marks provided several scenarios to the committee involving varying Alaska Highway (‘Southern’) route capital 7-17-01rogermarks2crop.pngcosts, gas prices, transportation charges, volume of gas throughput, rates of return, wellhead values and value to the state (The report outline is available here, worthy of review).  The scenarios point out, as Marks indicated in his presentation, that “Small changes in the gas price have as dramatic an effect as large capital cost changes.”  Following the meeting, Northern Gas Pipelines asked Marks if he had done any economic modeling for other routes (While the Committee did not request it, we include his Canadian model here).  When asked how the Northern route compared with the above scenarios, Marks said that, “Most interested parties think that route could save about $2 billion in capital costs,” owing in part, he said, "to the economy of scale achieved by transporting Mackenzie Delta gas--about a $.60/MCF savings at the wellhead.”  (Photo, above: Marks briefs committee) 

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Testifying for the Regulatory Commission of Alaska (RCA), Antony Scott said that for gas pipelines within its jurisdiction, the RCA’s policy is to ensure just and reasonable rates and non-discriminatory access.  He then went on to point out that when interstate-bound gas molecules were in a line it would typically be under the authority of the Federal Energy Regulatory Commission (FERC).  He said that he would expect the RCA to have no authority over a North Slope gas pipeline, but that it generally has jurisdiction over ‘lateral lines’.  (Obtain presentation here.)  Other committee teleconference discussions with FERC officials Robert Cupina, John Katz, Randy Mathura and Bob Petroselli confirmed these lines of authority.  General sense of discussions characterized positive working relationships among Federal and state regulatory agencies and with the National Energy Board (NEB) of Canada.    (Photo-While audience size varied during the two day meeting, about 50 were present while Scott testified.)  (More reports below, and more to follow….  -dh)

7/18:  Larry Tourangeau, the President of Ernie McDonald Land Corporation, announced today that the Corporation had completed the details of a Funding Agreement on behalf of an Aboriginally owned  pipeline corporation that will be created to apply for a Certificate of Convenience and Necessity from the National Energy Board to construct a pipeline from Prudhoe Bay in Alaska to the Mackenzie Delta to a province of Canada.  (See release here.)

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Alaska State Legislature, Joint Committee on Natural Gas Pipelines. See full agenda here)        PARTIAL REPORT (MORE TO FOLLOW):  State consultant Ed Small (Photo-Small, left, with Revenue Commissioner Wil Condon) told lawmakers yesterday that even with a doubling of natural gas prices in the last two years to $3/thousand cubic feet (MCF), after spiking to over $9, marketing Arctic gas reserves faces difficult challenges and competition but there continues to be reason for optimism. “There is a reasonable chance that Alaska gas will reach market in the next 10 years,” he said, “but we do not subscribe to the ‘30 trillion cubic feet (TCF) world by 2010’; we see that as more plausible than possible”.  Small was referring to some estimates that today’s annual US consumption of about 23 TCF will increase by nearly half in the decade due to increased use of natural gas for power generation, industrial and residential use.  A bright spot, according to Small is that, “the two target markets for Arctic gas are the Midwest and West Coast,” which offer a slight price premium.  He cautioned that major sources of new gas are “starting to have an impact…” on the market, including drilling success in Western Canada, the Rocky Mountains, Gulf Coast, Gulf of Mexico and offshore Eastern Canada.   Western Canada exploratory wells have increased 23% this year.  The Scotian Shelf now produces 500 BCF/day, expected to move to 1 BCF/day by 2005 and 3 BCF/day by 2010.  Atlantic Coast landings of LNG imports could rise to 3 BCF/day by 2005 with world LNG transportation increasing continuously and reorganizing.  New regasification facilities are on the drawing boards for Mexico, the Gulf Coast, East Coast and even offshore California.  He said that LNG prices are projected at $3/MCF or less and that “…you need $3 gas…” to justify an Arctic gas project (See yesterday’s LNG story, below. –dh).  “Under our scenario,” he said, “there could be adequate demand (for Alaska gas), by 2008.  Canada is not a market for Alaska gas: “Canadian demand is more than adequately provided by Canadian supply,” he said, another form of competition for Alaska gas.  “There is a competition even among Arctic gas.  If you saw an Alaska project, it would probably delay a Mackenzie Delta project until 2015.”  Small does not foresee adequate pipeline capacity in southern Canada for movement of Arctic gas.  “We expect that in the 2010 timeframe we will need a 1 BCF/day expansion of existing infrastructure,” just to meet existing requirements.  Small inventoried project risks, including: gas prices, growth of competing supplies, political intervention (“…infighting and political delay could be enough to close the window on Arctic gas.”), market growth, competition for pipeline workers and material among various projects, and other factors.  On the continuing desire by many Alaskans to see an LNG project, Small observed that, “we see in Asia an adequate supply of LNG at a lower price than Alaska LNG.”  Small also alluded to the importance of US/Canadian relations and complexities, reminding lawmakers that of total pipeline routing, 2/3 of either of the two major proposals would be in Canada, where a third proposal, a Mackenzie Delta only pipeline, increases competition even within Canada.  A 4 BCF/day Alaska project, he said, “…would certainly push Mackenzie Delta gas beyond 2015.  (In earlier remarks to Governor Knowles’ gas policy council, small referred to Canadian interest in tapping into Canadian royalty gas reserves in the Delta.)”  Chairman Torgerson asked how long it would take for Canadian companies to be able to produce 1 BCF/day from the Delta.  Small said, “There are about 9 TCF of proven reserves there…;” and that there could be sufficient reserves developed by the time a pipeline were constructed.  The joint Legislative Committee, chaired by Senator John Torgerson  (Representative Joe Green, Vice-Chair) has focused on benefits of a gas project for Alaska, including the potential for a petrochemical industry.  Small pointed out that there is even competition between Alaska’s producing interest and its manufacturing interest.  A higher price is needed to justify transportation costs for Alaska’s gas, but “Gas prices spiking up could put a petrochemical business out of business,” he said.  Torgerson referred to Premier Klein’s now famous “pound of flesh” statement regarding Alberta’s desire to have access to Arctic gas liquids for its own petrochemical industry.  Small opined that the Premier doesn’t want to see a shortfall in liquid feedstocks in the Province and was sending a signal that regardless of what project is built, proponents need to “talk to Alberta”.  (Note: in later testimony, Westcoast Energy Executive Vice President D. Michael G. Stewart offered a similar analysis.)

Alaska Revenue Commissioner Wil Condon addressed the committee on questions regarding state financial participation—“Options and Analysis”, as Senate Bill 158 requires his department to provide the Legislature with a comprehensive report by 1-31-02.  His progress report identified consultants chosen to assist in the research, CH2 M Hill’s David Gray and Petrie Perkman’s Bill Garner.  He reviewed the significant array of previous studies dealing with potential state financial participation in a north slope gas project.  Then he reviewed reasons some say the state should participate and others oppose such involvement (i.e. document available here, on request.)

(More reports to follow….  -dh)

7/17:  Washington, D.C.- House Resources Committee Chairman James V. Hansen has scheduled a Full Committee legislative markup for H.R. 2436, the Energy Security Act.  The markup will be TODAY, at 2:00 p.m. E.S.T. in 1324 Longworth House Office Building.  The bill, sponsored by Chairman Hansen, Energy and Commerce Chairman Tauzin, Transportation Chairman Young, and Energy and Minerals Subcommittee Chairman Cubin will implement parts of the President's energy policy agenda that are within the jurisdiction of the Resources Committee.   Live audio of the markup will be available here.        *         HOUSTON--(BUSINESS WIRE)--July 17, 2001--The following is an advisory from Industrialinfo.com (Industrial Information Resources Inc.; Houston, Tx). Currently, the U.S. consumes over 22 billion cubic feet per day of natural gas of which approximately 1.4 billion cubic feet per day is supplied from Liquefied Natural Gas (LNG) import terminals. Energy specialists forecast that the need for natural gas will exceed 30 billion cubic feet per day by the end of the decade. According to the Department of Energy (DOE), demand for natural gas will increase by 4.4 percent in 2002 and 2.5 percent annually thereafter. The increase in future demand is being driven by construction of new natural gas fired power plants by Merchant Power Producers and Industrial Energy Producers (IEP). This is creating a grave concern for future natural gas supply.   Importing LNG is one part of the solution to help supply the expected 8 billion cubic feet per day natural gas shortfall by 2010. Presently, there are not enough LNG terminals in operation to handle the import volume being considered. In the U.S. there are two LNG receiving terminals with a combined regasification capacity of 1.4 billion cubic feet per day. Two other facilities with a combined regasification capacity of 1.7 billion cubic feet per day are in the process of being reactivated on the east coast. This will bring the total regasification capacity to 3.1 billion cubic feet per day by the third quarter of 2002, still leaving a shortfall in capacity. As of July 2001, four companies are presently evaluating the construction of seven new LNG terminals, and expanding one existing LNG terminal, all located in the U.S. If completed these terminals would provide a combined total regasification capacity of 7 billion cubic feet per day of natural gas. Two of these companies, El Paso Energy Corporation (Houston, Tx.) and CMS Energy Corporation (Dearborn, Mi.), are also evaluating the construction of four new LNG terminals in Mexico, two of which, due to their location, would be capable of supplying markets in California.      *       UPCOMING EVENTS: Today and tomorrow, Alaska State Legislature, Joint Committee on Natural Gas Pipelines.  See full agenda here (report to follow....).        *       July 19, Barrow, full Alaska Highway Natural Gas Policy Council meeting/public hearing.        *        July 27, CSX Corporation (majority owner, Yukon Pacific Corporation; owner, The Greenbrier Resort), Chairman/President/CEO John Snow will address Commonwealth North, Hotel Captain Cook, 276-6350.        *        August 6-8, Colorado Oil & Gas Association’s Rocky Mountain Natural Gas Strategy Conference, Colorado Convention Center, Denver, CO. Phone: 303-861-0362.       *         September 5 - 6, 2001, Oil Sands Trade Show & Conference, Fort McMurray, Alberta: www.petroleumshow.com/oilsands       *        October 2-3 Pacific Norwest Strategies Conference, Portland, Oregon, E-Mail: gasconference@ziffenergy.com.          *        October 10-12, 2001 The Fourth Monetizing Stranded Gas Reserves (www.remotegasstrategies.com), Omni Interlocken Resort in Denver, Colorado.  *        November 27-30, 2001, Prime Minister Jean Chrétien leading Team Canada West trade mission to Dallas and Los Angeles.

7/16 CBC, TULITUA, NWT - The Dene National Assembly isn't talking about a northern pipeline.....Away from the microphones, some delegates speculated no one wanted to jeopardize Dene unity, now at a ten year high, with all five regions back at the table.... The Deh Cho First Nations will discuss the pipeline issue at a special assembly next month in Wrigley.           *       CBC--Klein said he and Cheney talked about ways to come up with a continental approach to energy, integrating the province into the U.S.'s plans. He said he would welcome American investment in the tar sands, and wants any new oil or gas pipeline from Alaska to run through Alberta.     

7/14-15, weekend:  Public Notice printed in 7/9/01 News/North (See complete version here): "To all persons considering the construction of a pipeline in the Mackenzie Valley (the "Proponents")  ...  Notwithstanding subsection 73(a) of the National Energy Board Act no person shall have access to these lands or waters overlying such lands without the written permission of...."  (See 7/5 news item to understand context.)       *        Thorunn Howatt, Northern News Services, Yellowknife - …(Western Arctic MP Ethel Blondin-Andrew) also spoke about the Canadian government's role in pipeline negotiations. Although the federal government claims to remain neutral, the prime minister has publicly supported the development of Arctic gas and strengths of the Mackenzie Valley corridor.   *  She said the route is the shortest and cheapest with a right of way existing from Norman Wells to Alberta.  *  The route also passes through Canadian deposits, allowing for more development, leaving the smallest environmental footprint and giving Prudhoe Bay gas the shortest route to commercial markets.  ...  Blondin-Andrew said an alternative route through Alaska and southern Yukon would delay further Canadian development.       

 xspeakerporter.png7/13:  SPECIAL REPORT: Russian Far East Competes With and Supports Alaska Interests.  Yesterday, Dr. Galina Pavlova, Director, Dept. of Offshore Mineral Resource Development, Sakhalin Region/Russian Far East, said, "We are planning to build the largest LNG plant in Russia, with a capacity of 10 million tons/year."   Northern Gas Pipelines asked Governor Igor P. Farkhutdinov (Photo-right, at Anchorage's Hotel Captain Cook for Alliance presentation.) about markets for Sakhalin's LNG project.  "The market for our LNG is Japan, Taiwan and Korea," he said.  When asked about competitiveness of his LNG gas in a long term environment which may see LNG being landed for $3-3.75/BTU, Farkhutdinof said, "Our LNG will be very competitive."   Sakhalin's natural gas reserves occur relatively close to planned liquefaction facilities at tidewater and destination markets, unlike North Slope gas which must traverse the state for about 800 miles before it can be liquefied and loaded onto cryogenic tankers to serve the same, but more more distant Asian markets.  Alliance President, Bill Stamps, welcomed the crowd while Community and Economic Development Commissioner Debby Sedwick introduced Governor  Farkhutdinov.   The Alaska Export Assistance Center's Chuck Becker shared the head table.  Complimenting the relationships  these parties have developed over the last decade, Farkhutdinov said that transportation infrastructure is critical to ongoing development and that , "we were all delighted when we heard about Evergreen's plan to develop regular air service from Alaska to Sakhalin."  Pavlova added that, "We are following in your footsteps but may now be a little ahead of you, for we are in process of building both an oil and a gas pipeline."  She acknowledged with appreciation the training opportunities Senator Ted Stevens has supported, and concluded that "we are delighted that great companies like Natchiq, VECO and Peak have become involved in our development."  Where Russian Far East development may provide competition for any Alaska LNG projects, the meeting made clear that Sakhalin development has welcomed Alaska's oil & gas support industry.  (Photo, left-Dr. Pavlova with House Speaker Brian Porter at 7-13-01 Alliance meeting)  -dh       *         Request this special Dr. Arlon Tussing paper, "Gasification of Japan and East Asia: The Need to Organize Receiving-Country Markets." It still contains enough timely information and plausible opinions about Far Eastern gas markets to permit its readers to sound like near-experts. Indeed, it may be the only public source of this information offering certain insights.  "Just as some people classify the North Slope resource as 'stranded gas,'" Tussing says, " the Japanese could well be tagged 'stranded consumers.'" (See our 7/6 Tussing story above.)        *        "Drilling for natural gas deflates: A decline in prices means a decline in rig-use forecasts," By NELSON ANTOSH, Houston Chronicle.        *        Victoria , CBC- The petroleum industry wants the new B.C. government to cut taxes and streamline regulation to make drilling here more competitive with Alberta.

7/12:  Special Detailed Report: ALASKA HIGHWAY NATURAL GAS PIPELINE POLICY COUNCIL.  Yesterday the Council's State Pipeline Ownership and Tax Structure Committee met at the Atwood Building in Anchorage to raise and corbusfreeman7-11-01.pngdiscuss key gas project (i.e. GP) pipeline ownership and tax structure issues, though ownership subjects dominated the discussion.  Chairman Bill Corbus (Photo-right) led the discussion for members with briefings provided by Permanent Fund Executive Director Bob Storer, Revenue Commissioner Wil Condon, AIDEA Executive Director Bob Poe and Department of Law representativesDan Fauske, Executive Director of the Alaska Housing Finance Corporation, attended as a resource and invited guest as did Governor's Pipeline Cabinet member, Community and Economic Development Commissioner Debby Sedwick .  Council members participating in the public meeting included Mike Navarre, Ron Duncan, Ed Rasmuson, Mike O'Connor and Jack Roderick, with Special Assistant to the Governor Ken Freeman (Photo-left), facilitating.  (Information on members included here).  

The Committee will advise the Council on matters pertaining to state state royalty share issues, promotion/facilitation of GP (i.e. Gas Project) financing, state ownership issues, evaluation of relevant state tax structure.   Various committee reports, including this committee's, are due to the Council by October 1, and the Council's charge is to provide all of its final recommendations to the Governor by November 30.  It is during the current, interim period that the various committees are reviewing alternatives for state involvement and taking public comment from citizens throughout Alaska (See Council schedule, here.).

(Please see this link for the full report, too detailed to include on this page.  -dh)

Other news:  RUSSIAN GOVERNOR TO DISCUSS ALASKA OIL AND GAS PARTNERSHIPS TODAY:  Governor Igor P. Farkhutdinov, Sakhalin Region/Russian Far East will speak on, "Sakhalin Oil and Gas Developments", with Dr. Galina Pavlova, Director, Dept. of Offshore Mineral Resource Development at noon, July 12, at Anchorage's Hotel Captain Cook.  (Reservations: Alliance, 907, 563-2226).         *         Alan Petzet, Chief editor - Exploration and Economics, Oil & Gas Journal, FINDLEY LAKE, NY, July 11 -- US natural gas prices likely will hold at near current levels for as long as 2-5 years rather than fall further, as many forecasters think, the chairman of the Independent Petroleum Association of America said Wednesday.       *       BARTLESVILLE, Okla., July 11, 2001 --- Phillips' first state-of-the-art Millennium Class double-hulled tanker, the POLAR ENDEAVOUR, sailed into the Port of Valdez, Alaska, today where it will load its first cargo of Alaska North Slope crude oil.  The vessel is operated by Polar Tankers of Long Beach, Calif., a subsidiary of Phillips Petroleum Company.     *        OTTAWA, CBC--Energy officials from the United States were in Ottawa Wednesday night, trying to get Canada to play a bigger role in Washington's national energy program.          *         WASHINGTON, D.C. - Several Alaskans appeared today before the full Committee on Resources to testify on behalf of H.R. 2436 - The Energy Security Act.  The bill was formally introduced Tuesday and has been referred to the Resources Committee.  Roger C. Herrera of Arctic Power joined Richard Glenn, Vice President of Arctic Slope Regional Corporation and Jerry Hood of Alaska's Teamsters on the witness stand (See related Hood-Herrerea story here).  Interior Secretary Gale Norton was the panel's lead witness.  (Scroll down to our 6-21-01 story here.)  *  Secretary Nortoncwnnortonharbour6-20-01crop.png recently returned from her second visit to Alaska's North Slope (Photo-right, with author, 6-21-01).  She has now fulfilled her pledge to see North Slope production facilities and the 1002 Area in both the winter and summer seasons.  During her testimony she answered questions demonstrating first-hand knowledge of the area.  When asked how Alaska Natives feel about oil drilling in the ANWR region she replied the Alaska Federation of Natives voted to support oil exploration and the indigenous Inupiat Eskimos who live on the North Slope also wholeheartedly support production facilities.  *  Congressman Young, now Vice Chairman of the Resources Committee, engaged in spirited debate with his fellow Members during the hearing.   See Maureen Lorenzetti's Oil & Gas Journal Online report here.)

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7/11 PIPELINE NEWS, Quebec, Canada--John Ellwood, vice president, engineering and operations for Foothills Pipe Lines Ltd. confirmed his company's support for the construction of two northern pipelines at the Pipe Line Contractors Association of Canada's annual convention . "Our vision at Foothills is that two northern pipelines can and should be built," he said. "Together, the Alaska Highway Pipeline and the Mackenzie Valley Pipeline will deliver the maximum benefit to all regions of Canada and the United States.  (Photo: Elwood visiting Alliance members in Anchorage, 5-17-01)      *      CBC, TULITA, N.W.T--Premier Stephen Kakfwi asked for gas pipeline project unity during opening remarks yesterday at the 31st Dene National Assembly in Tulita.        *        HOUSTON, CBC - Canada gave its approval Tuesday to Conoco' s $9.8-billion takeover of Gulf Canada Resources     *     "Terry Halifax, Northern News Services, Hay River (July 09/01) - Last week, the oil and gas industry and members of the Deh Cho First Nations signed a partnership agreement that will bring 30 new jobs and secure a foothold in the oil and gas industry for the people of the Hay River Reserve....Minister of Resources, Wildlife and Economic Development Joe Handley wished the joint venture success and sees the partnership as the wave of the future for business in the North.....     *     Yahoo Finance, By Andrew Kelly, HOUSTON, (Reuters) - U.S. energy exploration and production companies said Tuesday they had no plans for the time being to ease off drilling for natural gas, despite a big drop in prices this year amid signs supply is running ahead of demand as the nation's economy continues to slow down.  ``We are not cutting back at this point on drilling or production,'' said Teresa Wong, a spokeswoman at Anadarko Petroleum Corp. (NYSE:APC - news), which has led a surge in U.S. natural gas drilling over the last 18 months....  Burlington Resources spokesman James Bartlett said his company did not anticipate any cutback in its drilling program during the balance of this year.  ``Even though prices are off their peaks, they're still very good when you look at the long-term price trends for natural gas,'' he said.     *      MEETINGS/EVENTS:  Governor's Alaska Highway Natural Gas Policy Council State Pipeline Ownership and Tax Structure Subcommittee, meeting @ 10 a.m. TODAY, Suite 1700, 550 W. 7th Avenue, Anchorage.

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7/10:  SPECIAL REPORT, ANCHORAGE, AK--"The state must focus on 50 years of socio-economic benefits for Alaska," former Arco Alaska President, Ken Thompson (Photo-right) told his Anchorage Chamber of Commerce audience in the historic Fourth Avenue Theater yesterday.  In his vision for a North Slope natural gas business for the state, Thompson said Alaskan leaders would be in for some intense bartering with industry which, rightfully, seeks its own best interest.  "The state should be unified behind a proactive position...or we will have a weak negotiating position," he counseled.  Now retired from over two decades of oil industry service, Thompson returned to Alaska with his family from his last assignment at Corporate Headquarters in Los Angeles following the Arco/BP Amoco merger.  He now serves as president of Pacific Rim Leadership Development, counseling companies, non-profit organizations and Native corporations on strategic planning.  Critical to Thompson's message is the creation of a gas 'trading hub' to establish potential for diversifying sales to the Lower 48 and, later, to local, West coast and Asian markets via a future LNG system.  The hub concept would also involve establishment of 'clear and transparent' transportation costs and pricing, providing security and certainty to in-state markets of gas for residential, commercial and petrochemical uses...as well as to distant markets.  Img439.pngThompson makes no secret of his preference for an initial gas transportation system using the TAPS-Alaska Highway corridor and suggests that the state own at least a 12.5% portion of the pipeline in the state from Prudhoe Bay to the hub.  (His other comments and "Principles for ANS Gas" are included in a PowerPoint presentation which readers may request (with our compliments) from the Presentations Page).   Following the presentation, former Anchorage Mayor and oil industry author Jack Roderick (Bibliography), a member of the Governor's Alaska Highway Natural Gas Pipeline Policy Council remarked that," Ken's been there and I think he's right; the negotiations may be difficult."  (Photo: Alaska Humanities Forum Program Manager, Jane Angvik; Jack Roderick; James Kenworthy, Executive Director-Alaska Science and Technology Foundation.)    See ANCHORAGE DAILY NEWS STORY HERE, by Ben Spiess-DH 

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7/9:  SPECIAL REPORT, ANCHORAGE, AK-- "This Administration believes economic development and environmental stewardship can go hand in hand,"  U.S. Environmental Protection Agency Administrator, Governor Christie Whitman, told members of the Resource Development Council for Alaska (RDC), at the Sheraton Anchorage Hotel this morning(Photo-right: Before the meeting, Governor Whitman personally greeted about a third of the several hundred audience members, including Kenneth J. Freeman, Special Assistant to Governor Knowles for business and gas line development.)"Washington needs to listen more and preach less; and that's why I'm here," she told the appreciative crowd.  Whitman observed that RDC has advanced tenants of stewardship for the past 25 years.  "You know that responsible growth doesn't mean no growth," she said.  In context of President Bush's effort to structure a national energy policy, Whitman said that, "Alaska can make an extraordinary contribution without compromising environmental protection."  Being sure she did not emphasize 'energy production over environmental protection," she said that, "We are obligated to leave the land cleaner, purer and better protected than when we found it."  Whitman was aware of Congressional efforts to establish an EPA 'Region 11' and joked that while such "...a new region would likely include both Alaska and Hawaii, the only trouble is I couldn't get anyone to work anywhere else."     Whitman said Alaska has the largest EPA satelite office in the country, with a staff of 30 employees.     (See extended news section for event photos: 1.  Nancy Usera, Bob Stiles, Governor Whitman, Aide-Susan Spencer & Tad Owens; 2.  Governor Whitman and Robert Hawk; 3. Charles Johnson, Jack Williams & Governor Whitman; 4. Governor Hickel, Meade Treadwell & Governor Whitman; Governor Whitman, Mayor Wuerch & Charles Johnson; 5.  Governor Whitman and Alice Hanley; 6. Governor Whitman and James Blassingame; 7. Gail Phillips, Governor Whitman, Bob Stiles and John Shively)

 The Canadian Press, Bob Weber, NATIONAL POST, EDMONTON - Environmentalists are fuming over a deal struck between the federal and Northwest Territories governments and aboriginal groups to streamline a review for a proposed northern natural gas pipeline.   ...   Based on discussions with gas producers, the panel will be set up to consider two proposals.  One would be a stand-alone pipeline for Mackenzie Valley gas that would carry only Canadian natural gas. The other would be the so-called over-the-top route, in which gas from the much larger gas fields in northern Alaska would be piped from Prudhoe Bay off the north coast of Yukon to the Mackenzie Delta in the N.W.T., from where it would be sent south with the Canadian gas.  The agreement, which could cut a year out of the approval time for the project, is a boost for those promoting a pipeline down the Mackenzie Valley.   A rival route, which would head down the Alaska Highway and bypass Canadian gas, is seen to have a head start because most of its regulatory approvals are in place.      *     WHITEHORSE STAR, by Jason Small, DAWSON CITY – The Yukon’s first nations may be able to benefit from a pipeline regardless of whether it goes through the territory.  John Carruthers of BP Canada attended last week’s Council of Yukon First Nations general assembly in Dawson.  ...       *      Oil & Gas Journal, Sam Fletcher, HOUSTON--With US supplies of natural gas increasing in the face of "lost demand," Salomon smith Barney Inc. reduced its forecast of composite spot prices to $3.25/MMBtu through 2002 from a previous range of $3.75-$4.50/MMBtu.       *         At noon, today, former Arco Alaska, Inc. President, Ken Thompson will address the Anchorage Chamber of Commerce on natural gas pipeline issues.  Thompson is president of Pacific Rim Leadership Development.

7/7-8, Weekend: ANWR reality lies far north of Gwich'in, FAIRBANKS DAILY NEWS-MINER, By GEORGE TAGAROOK--Here in Kaktovik, home of the only people native to the lands in question, the Arctic Coastal Plain of the so-called Arctic National Wildlife Refuge, we read with both amusement and horror the series of articles in the Fairbanks Daily News-Miner about recent eco-ethnic parties over in the Yukon Basin. It is marvelous rhetoric, a stunning incursion of alien perspectives and language into a world never before visited by such seemingly noble sentiments.   ...    When Sarah James, one of the persons using that alien language now, signed the lease agreement years ago for oil and gas exploration within the Gwich'in homelands, we did not think to question the wisdom of her decision. It was their homelands to do with as they pleased. When they speak of their sacred lands, the calving grounds of the Porcupine Caribou Herd, which just happen to be our homelands and far removed from theirs, we know we are hearing alien words spoken for somebody else. For no Gwich'in would ever make that incredible mistake.  The ANWR issue has nothing to do with environmental protection nor with caribou....    *      Derek Neary, Northern News Services, Kakisa (July 06/01) -  Don't sign the proposed Mackenzie Valley pipeline agreement, Deh Cho First Nations' chief negotiator Chris Reid advised chiefs and elders last week.  Alleging the deal lacks guarantees and could result in "zero ownership" for First Nations, Reid was critical of the Aboriginal Pipeline Group's memorandum of understanding (MOU). At best, it would only net $1 million per year for the entire Deh Cho region after taxes, despite the fact that an estimated total of $100 billion in gas from the Beaufort Delta would be flowing south, he said.     *     Globe and Mail, Calgary-- "... Joe Handley, Minister of Finance for NWT, said the withdrawal of two key native communities from a tentative agreement between natives and the producers' consortium last week is threatening to close a narrow window of opportunity.  ...  'My biggest fear is while we're diddling around with various options, we could see the Alaskan pipeline go first,' he said.  'If that happens, [our] pipeline would not be needed any more.'"          *     Following up on Dr. Tussing's comments below (7/6), re: gas pricing, please note that references to his biography and bibliography are here...along with some papers and speeches.  Not much outdated with the passage of time is this brief summary excerpt of 1991 Congressional testimony (Complete remarks, available on request):  "The Case Against a New Crusade for Energy Inde­pendence--War in the Middle East has imbued many Americans with nostalgia for the en­ergy-con­scious 1970s and a longing for a re­vived National En­ergy Policy to serve as a moral sub­stitute for war.  This clamor is grounded on two stubborn fallacies—that energy inevitably grows scarcer and more costly over time, and that experts can accurately forecast fuel-supply and price trends or pick the "winners" among new technologies —and on an exaggerated preoccupa­tion with U.S. dependence on crude-oil imports. *   As a whole, the massive inter­vention of the federal govern­ment during the Energy Crisis years did more harm than good, and the good that did emerge was often at an exorbit­ant cost to consumers or tax­payers.  The wisest and most successful element of President Carter's energy policy was the deregulation of natural-gas prices. But the Natural Gas Policy Act of 1978 dragged out the de­control pro­cess into a seven-year in­terreg­num...."

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7/6Dr. Arlon R. Tussing told Northern Gas Pipelines this week that there has been a “…huge difference between actual historical conditions in the natural-gas market of North America …and the idealized market conceived by analysts and forecasters.”  Tussing, an economist, is one of the leading northern gas pipeline analysts (See bibliographical reference to his important northern gas pipeline and natural resources economic works and biography, here.)   He documents the gas pricing concern also expressed below by columnist Tim Bradner (Scroll down to 7/4 news).   *  According to Tussing (Photo), the world envisioned “… by analysts and forecasters is best characterized by a unidirectional trend of prices like those represented in Figure 2 by successive additions of the Annual Energy Outlook published by the U.S. Department of Energy's Energy Information Administration. The trend of such projections is usually upward, reflecting the imagined depletion of a fixed, finite resource base.”  *  Tussing completes his analysis by citing “…the historical record, 20 years of which is depicted in Figure 1, discloses great seasonal, cyclical, and random real-time price volatility---but has indicated no statistically significant price trend since free wholesale gas markets first emerged in the mid 1980s. The record does nevertheless reflect major one-time price discontinuities stemming from major structural changes, such as the re-regulation and deregulation of first-sale prices in 1979-1987, and the exceptional events of the last twelve months.  It is worth noting that professional forecasters almost unanimously projected price rises during the late 1980s and 90s.  Almost unanimously again, they failed to foresee the unprecedented price upheavals of  either the early 1980s, or 2000 and 2001.”  *  In Tussing’s presentation before the International Association for Energy Economists (IAEE) last month in Anchorage, he pointed out that, “The rapid emergence of a North American natural-gas transmission network, and the rapid growth of gas consumption between the Depression and about 1972, was powered by a huge inventory of previously troublesome or worthless, and thus nearly "free" gas reserves, accumulated in more than a century of oil exploration, and previously vented, flared, or shut in.”    *    (Author’s comment:  All northern gas pipeline stakeholders should appreciate the gas pricing disparity between economic projections and historical reality, which Dr. Tussing illustrates.  Investors are mindful of this disparity.  They will participate in a financing plan for a project or multiple projects based on their sense of gas price reality, and other cost and market factors.  While the desires of important governmental leaders and politically powerful constituencies will influence investors, political desires can only produce a successful Arctic gas pipeline project when the economic reality concurs.  Accordingly, the North Slope and Mackenzie Delta producers should be complimented for the intense financial and scientific studies now underway.  In the author’s opinion, especially given the complexity of competing routes and modes, political action is more likely to delay projects than to expedite them--absent great statesmanship.  One does expect stakeholders to express opinions; but accompanying such opinion with support--not criticism--for the producers’ due diligence and the free market is the surest route to a successful project. –dh)

Ottawa, Ontario--Prime Minister Jean Chrétien announced today that he will lead the first Team Canada West trade mission to Dallas, Texas and Los Angeles, California from November 27-30, 2001. On this occasion, the Prime Minister, the Premiers of the four Western Provinces – British Columbia Premier Gordon Campbell, Alberta Premier Ralph Klein, Saskatchewan Premier Lorne Calvert, and Manitoba Premier Gary Doer – as well as the three Territorial leaders – Pat Duncan of Yukon, Stephen Kakfwi of the Northwest Territories and Paul Okalik of Nunavut – will lead a delegation of Western Canadian companies.      *      Governor Igor P. Farkhutdinov, Sakhalin Region/Russian Far East will speak on, "Sakhalin Oil and Gas Developments", with Dr. Galina Pavlova, Director, Dept. of Offshore Mineral Resource Development at noon on Thursday, July 12, at Anchorage's Hotel Captain Cook.  (Reservations: Alliance, 907, 563-2226)     *     U.S. Environmental Protection Agency Administrator, Governor Christie Whitman, will address members of the Resource Development Council for Alaska, and guests, 7/9/01 @ 7:30 a.m., Sheraton Anchorage Hotel, reservations: 276-0700.

7/5:   YELLOWKNIFE, NWT, CBC-- ...Metis Land Corporations from Norman Wells, Fort Good Hope and Tulita signed a framework memorandum with Arctic Resources last Thursday. Bob Murphy says his company will now try and convince other aboriginal communities to join the deal. He says it is also important to bring producers on board with any kind of deal reached with Aboriginal people.  "We're creating an approach that's working with the aboriginal groups in a business-like yet pro-active ... way.  We're also creating a pipeline tariff structure that would make immense business sense to the producers on both sides of the border." Murphy says Arctic Resources will spend the next two months trying to negotiate a final agreement with Aboriginal communities. He says if that happens, a pipeline down the Mackenzie Valley could be completed by 2006.    (See our 6/29 story, below)  *        POWERMARKETERS:   With cooler-than-normal summer temperatures, natural gas prices for July dipped to their lowest level since last fall.        *       Note:  August 6-8 Colorado Oil & Gas Association’s Rocky Mountain Natural Gas Strategy Conference, Colorado Convention Center, Denver, CO. Phone: 303-861-0362; Fax: (303) 861-0373. October 2-3 Pacific Norwest Strategies Conference, Portland, Oregon, E-Mail: gasconference@ziffenergy.com.  The Fourth Monetizing Stranded Gas Reserves (www.remotegasstrategies.com), is the first and most extensive conference to cover the remote gas development industry; October 10-12, 2001 at the Omni Interlocken Resort in Denver, Colorado...industry leaders will discuss the opportunities and challenges of monetizing remote gas. 

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7/4:  HAPPY INDEPENDENCE DAY!     *     WASHINGTON POST--"We remain committed to [Arctic refuge] production but realize that it won't be easy," said Mark Pfeifle, a spokesman for Interior Secretary Gale A. Norton.   (Note: Pfeifle accompanied Norton on her recent Alaska fact-finding trip, reported here--scroll down to 6/20-21.)    *       Northern Gas Pipelines asked Alaska Economic Report Editor, Tim Bradner, for his opinion on key obstacles to approval of any Arctic gas system in the near future.  Those studying these pages will agree with Bradner that one obstacle is the sheer complexity arising from numerous projects, stakeholders and political agendas made even more obscure with the volatility of energy pricing and supply.  "Specifically", he said, "I believe there is a concern among the companies that prices can be sustained for ten years or more.  Energy economists are now observing that one of any Arctic gas project's key competitors will be imported LNG, which is now being landed at close to $3 per MCF."  Bradner cited a second concern will be project costs (See 7/3 Daily News Story, below).  "Some have said a project could cost $10 billion.  But 25 years ago the Trans-Alaska Pipeline was built for about that amount.  I appreciate there have been gains in technology and productivity in that period.  But will those efficiencies overcome a quarter century of inflation, the fact that instead of 1/4 inch pipe, the high pressure gas pipeline will be thicker, that rather than 800 miles, the gas line will traverse over twice that distance?"  When asked if that is not why the major producers on the North Slope and the Mackenzie Delta are studying all aspects of the major competing routes, he said, "...of course, and for that reason we should have reliable numbers by the end of the year.  These numbers, backed by studies and investor concern will be more reliable than figures now being used in press releases and debates." -dh  (Photo-Bradner covering 5-17-01 Kenai meeting of Governor's Natural Gas Policy Council.  His renowned, Alaska Economic Report may be ordered by corresponding directly.  Bradner is also a columnist for the Anchorage Daily News, business writer for the Alaska Journal of Commerce and an editorial consultant to the Governor's Alaska Highway Natural Gas Pipeline Policy Council.)

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7/3: Michael W. Gordon was installed today as incoming president of the Anchorage Downtown Rotary Club, which has provided forums for numerous gas pipeline speakers: governmental , corporate and contractor.   Those forums are covered extensively throughout these pages.  (Photo: Gordon is President/CEO of Jadon, Inc., owner of Chilkoot Charlies.)     *      ANCHORAGE DAILY NEWS, by Ben Spiess--"U.S. natural gas prices continued to fall Monday, crashing through the critical $3 per million British thermal unit price for the first time in 15 months. Analysts and executives alike have pegged the $3 price as the bottom price at which a huge Alaska natural gas export pipeline to the Lower 48 would be economic.   ... 'I don't think analysts anticipated the strong supply response,' said Roger Marks, an oil and gas economist with the state Revenue Department.   '...Every cent incurred in getting gas to market is important. A cost difference of 10 cents is a chasm.'"     *     NORTHERN NEWS SERVICES STORIES: "Aboriginal pipeline adds backers" by  Jack Danylchuk, Yellowknife (July 02/01); and  Kakisa (July 02/01) piece by Dave Sullivan: "Conflicts between old values and new stand in the way of a decision on a gas pipeline through traditional Deh Cho territory."   (See our reports on these stories below: 6/29.)       *        CALGARY, CBC - Premier Ralph Klein, five of his ministers, and representatives of nearly thirty Alberta businesses met on Sunday with business and government officials at the Canadian Consulate in Los Angeles.

7/2:  CBC story re: Aboriginal agreement with ARC (Note: See our 6/29 story below); and, a related CBC story re: Deh Cho First Nations meeting again in August (Note: See our Kakisa, 6/29 story below).      *       Dr. Arlon Tussing: New bibliographical reference, three decades of important northern gas pipeline and natural resources economic counsel.   (See 6/21 news item.)    *      ANCHORAGE DAILY NEWS, AP, Fairbanks -- The major North Slope oil companies are poised to launch survey vessels from Prudhoe Bay this month to scout a proposed northern natural gas pipeline route...that ... is roughly 350 miles shorter than the main alternative, a path paralleling the trans-Alaska oil pipeline to Fairbanks, then along the Alaska Highway.  (Note: article also quotes from original news releases linked to our 6/29 story below.)      *        CALGARY (CP) - Canadian companies stand to reap a "substantial" chunk of the work on a proposed $10-billion-US pipeline to transport Alaska natural gas to American markets, says a Calgary pipeline group involved in the plan. And the benefits of moving U.S. gas won't end there, says Foothills Pipe Lines co-chief executive Mike Stewart.  ...  While consensus appears to be growing on the need for two separate pipelines - one from Alaska, the other along the Mackenzie Valley - the side that gets under way first will enjoy a variety of benefits, including first dibs on a limited labour force and tight construction supplies.  ...  A glaring example of government interference is an Alaskan bill passed this spring that forbids a pipeline under the Beaufort Sea. This so-called over-the-top route is the key alternative to an Alaska Highway pipeline and would connect American gas to the shorter and less expensive Mackenzie Valley route.  (See 6/29 news item.)      *        ANCHORAGE DAILY NEWS EDITORIAL, 7/2: "State Rep. Lisa Murkowski stood up before the Downtown Rotary Club last Tuesday to dish out a dose of reality regarding the state fiscal predicament."  (Scroll down for our 6/27 report and gas pipeline reference.)      *        Comments on the Inuvik Petroleum Show, via Northern News Services, by Malcolm GorrillMayor Peter Clarkson called the first Inuvik Petroleum Show an "incredible" two days.  ... Wally Cullen, an accounts manager with Imperial Oil, agreed.  "Coming together like this, you get the chance to share new ideas and a better understanding of what's going on in the industry...." ... Inuvik Boot Lake MLA Floyd Roland was pleased with the show.  "We've got a lot of companies and corporations showing interest again in the Mackenzie Delta...."  ... Rod Maier, Northern gas program manager for Chevron Canada Resources Ltd., said he was really encouraged by the interest shown at the conference.  "It really shows support for Northern development...." ... John Brown of Shell Canada Ltd. said there was a "dynamic environment for networking" at the show.  ... Coun. Don Craik said, "I heard a lot of comments from people saying they thought it was even better than the Calgary show. There was a lot more opportunity for networking."  Related story:  Nellie Cournoyea of nellie photo colour-j.pngthe Inuvialuit Regional Corporation (Photo: Nellie Cournoyea, also Chair, Aboriginal Pipeline Group-APG)  said that when Inuvialuit or Gwich'in firms team up with larger firms within the oil and gas industry, the relationship must benefit everyone.  "These partnerships should be true and meaningful partnerships," Cournoyea said. "It has to be a two-way street."  ...  Fred Carmichael, president of the Gwich'in Tribal Council, said trust needs to be established and maintained. ... "It's not because we want to be hard," Carmichael explained to oil and gas firms. "It's because we've been hurt in the past."  ... Graeme Phipps of PetroCanada responded.  "Fred and Nellie, we hear you. We in industry hear you," Phipps said.  ...  Joseph Handley, minister of resources, wildlife and economic development, said there are exciting opportunities and challenges ahead in the Beaufort Delta.  "All of us, the territorial government and aboriginal governments, we need to really support the responsible development of the oil and gas industry," Handley said.  "The worst thing we can do politically is stall this opportunity."  (Note: the first Inuvik Petroleum Show, 6/20-21-22, attracted over 300 participants and 70 exhibitors; already, 40 exhibitors have signed up for next year.)

6/30-7/1, Weekend:  HAPPY CANADA DAY!       *     See this excellent background report, "Canadian Natural Gas: Review of 1999canadamplf.gif and Outlook to 2010", prepared by Natural Resources Canada, Natural Gas Division.  "Essentially," it says, "all U.S. demand growth since 1994 has been met by increased imports, mainly from Canada.   (By 2010)...currently uneconomic gas supply sources may be under consideration such as... Alaskan and Mackenzie Delta gas."        *         CBC:  Mexican gas may increase gas competiton.        *        ANCHORAGE DAILY NEWS by Ben Spiess--A high profile environmental group has staked its opposition to an offshore natural gas pipeline route from Alaska's North Slope to Canada and the Lower 48. ...  The group opposes the offshore route through the Beaufort Sea because of its proximity to the Arctic National Wildlife Refuge and because it would travel through the largely undeveloped waters east of Prudhoe Bay.   (Note: Northern Gas Pipelines earlier cautioned that the passage of SB 164 in Alaska could indirectly support anti-ANWR efforts.  -dh)          *       "Environmental Organizations Living Off Fat of the Land", ANCHORAGE DAILY NEWS reprint--7-1-01, 1st of 4 parts-- of Pulitzer Prize-winning Tom Knudson's SACRAMENTO BEE articles (Not yet uploaded on ADN website).  "ADN Editor's note: Thirty-one years after the first Earth Day, the environmental movement has blossomed into a fund-raising, public-relations machine...."       *             HOUSTON CHRONICLE VERSION (Of earlier report, below)-- Arctic Resources Co. said two Canadian Indian bands endorsed its proposal to build a pipeline to carry gas from Canada's Arctic to U.S. markets, rejecting a rival plan from a group led by Exxon Mobil Corp.  

                  

 

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