9-30-02 Updates: 00:01, 01:48, 02:20, 11:55, 13:38, 14:25 ET.  Northern News Services, by Thorunn Howatt (Photo)-Today's throne speech will carry an encrypted message that will change the face of the North forever.   The federal government will tell the Aboriginal Pipeline Group (APG) it will get the loan guarantees it needs to raise cash for one-third ownership in a Mackenzie Valley pipeline. ...The federal government will give the APG its money partly because it stands to make back energy royalties. Then there's the thousands of jobs attached to the project.  (The Speech from the Throne will be delivered by Governor General Adrienne Clarkson in the Senate at approximately 14:30 PM, September 30, 2002. The moving and seconding speeches will immediately follow in the House of Commons.)     *     Tomorrow: We shall provide NGP readers with links to Canadian government's Consolidated Information Requirements for NWT pipeline.  Readers will also have latest government and industry speeches, delivered today/tomorrow to the Far North Oil & Gas Conference in Calgary.      *      'The Ear' also heard the ANWR Band, story & music demo below.    *      Bill Wicker, Communications Director, Senate Energy Committee tells us, "The House-Senate conference on the energy bill will cross the mall to the Senate side for its next meeting. That is Tuesday, Oct. 1, at 4:00 p.m. (TOMORROW-Here's a link.). Conferees will muster in 325 Russell Building, a.k.a. the Caucus Room. On deck: ANWR ... followed by other pending issues. Conference hasn't entered the home stretch, but it's rounding the final turn. For staff, that means weekend leave is canceled, it's sleeve-rolling time. Negotiators are firing offers and counter-offers at each other, ideas are being exchanged, meetings are breaking out everywhere Everything is now in play. Here's what remains, what we're working on: electricity/RPS ... ethanol ... climate ... tax issues ... research & development ... alt fuels ... oil & gas/ANWR ... hydro relicensing ... hydraulic fracturing ... geothermal ... and study provisions. We're far apart on a few key issues, but also ready to close on several others. All of these titles and sections are in varying stages of completion, so we're not starting flat-footed on anything. It's still a lot of work."     *     WASHINGTON (Dow Jones) - Congressional energy bill negotiators ... scaling back access to the Arctic National Wildlife Refuge in a Republican-backed plan to open the area to oil drilling.  (Our recent opinion.)        *      CBC-The American ambassador to Canada says the success of NAFTA may help Canada and the U.S. resolve other trade disputes.  "It will be an incentive for the U.S. and Canada to find common ground in areas excluded from this agreement," Paul Celucci told business delegates at a conference in Banff Thursday. (Earlier References)      *      Energy Information Administration-U.S. crude oil and natural gas proved reserves increased in 2001. Reserves additions exceeded production by 21 percent for oil and 31 percent for natural gas in 2001. This is according to the "Advance Summary: U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Reserves 2001 Annual Report" released by the Energy Information Administration.  (Photo-Guy Caruso, Administrator, EIA: "The trust and credibility of EIA information is essential to the fulfillment of that mission." -O&GJ       *      Murkowski News-NPRA was set aside in 1923 as a repository for petroleum reserves to fuel the U.S. Navy. The oil industry is increasingly interested in producing from the petroleum reserve, and federal lease sales are scheduled for 2004. Estimates put the amount of recoverable oil in NPR-A at from 1.3 billion to 5.6 billion barrels. But the Campaign for America's Wilderness began an effort Monday aimed at designating NPR-A as wilderness, placing it off-limits to most human activity including development of natural resources.

9-28/29-02 Updates: Saturday, 16:19, 16:32, 17:30, 19:30; Sunday: 16:55 ET.  Peter Cook of Williams Energy News Live tells us: "It's crunch time for lawmakers on Capitol Hill trying to reach an agreement on an energy bill compromise.... next week. We could also see a final vote on drilling in ANWR. The Washington bureau will have updates starting Monday.     *     "Music for Energy Bill Conferees? (Demo Clip for NGP Readers)".  It had to happen.  A patriotic group of Alaskans with no outside funding has organized a rock and roll band called "ANWR", to help sway the U.S. Congressional vote in favor appropriate development of ANWR.  Band member and keyboard player Joan Massart-Paden explains, “Music is a grassroots element for most people. Our music is based on the premise that if the American public hears through music that real people support the drilling at ANWR, maybe some of the politicians opposing the drilling would change their vote.”  The band has currently written and recorded one song, aptly titled “Drilling – Yes or No”, and is attempting to get it distributed locally and nationally. The lyrics, written by Gary Webster and Connie Wilhelm, are meant to carry a strong but non-controversial message. “Drilling issues, we gotta face. We’re divided in the race. From this point where does it go? Is it drilling yes or no?”  The song also remembers the horrors of September 11 in the lyrics: “We can’t forget the terror that brought us all together. We raised our flags and sang the songs. The adversity made  us strong.”  (ANWR Band Position Statement & Contact Information.  Media welcome to re-run our articles and links.  Note: polling data shows most Alaskans prize their state for environmental reasons...and most favor responsible development of the small fraction of ANWR acreage which Congress is considering.  -dh)

9-27-02 Updates: 00:15, 00:20, 01:09, 01:38, 12:19, 13:41, 15:25, 15:36, 16:00 ET.  At mid day, today in Calgary, Government of the Northwest Territories (GNWT) Premier Stephen Kakfwi (Photo) criticized Alaska's gas pipeline policy for hindering GNWT economic development progress and said that lack of investment from Ottawa could diminish GNWT interest in resource development projects.  Speaking to industry executives, he said it was ironic that Alaska had been, "among the first to recognize our efforts. They have acted to block decisions regarding the timing and extent of northern gas development."  He recalled Alaska's passage of SB 164, saying "they passed a law banning the Beaufort Sea/Mackenzie Valley route – virtually negating the feasibility of transporting Alaskan natural gas to market via the Northwest Territories. This was followed by a similar amendment in the energy Bill still being discussed in the U.S. Congress. ... More recently, an amendment in the US Senate’s Energy Bill calls for U.S. taxpayers to provide Alaskan gas production with a price guarantee ....  This blatant inference in the North American gas market will benefit a few to the detriment of many. It is a poor and ill-conceived public policy that would have a negative impact on North American energy security."  Of Federal relations, Kakfwi said, "Unless NWT Aboriginal groups, communities, businesses and residents can realize real benefits, there is no reason for resource activity to proceed. In the absence of any benefits, and without an agreement on devolution and resource revenue sharing, you can understand why major resource development is of little value to the Government of the Northwest Territories."  He concluded by asking private industry executives present to, "assist and work with us to get this message to Ottawa."   (Readers may download the Premier's speech notes, courtesy of Drew Williams-Yellowknife.  Also, refer to Minister Antoine's recent letter and our related commentary: For The President and The Prime Minister )      *      ADN by Liz Ruskin-Washington -- It's horse-trading time on the energy bill, and the proponents of drilling in the Arctic National Wildlife Refuge seem to hold conflicting views about what would make a good bargain.           *     Whitehorse Star-(Premier Pat Duncan) is scheduled to attend an oil and gas conference in Calgary early next week.  She has been scheduled and advertised for months as one of the two luncheon keynote speakers for the fourth annual Far North Oil and Gas conference at the Fairmont Palliser Hotel in Calgary.  However, government officials are trying to get a gas company to take the premier’s place as a keynote speaker.  According to cabinet spokesman Michael Hale, right now, there are discussions with Conoco Phillips to have someone from that company speak in the premier’s stead.  ... if someone from Conoco Phillips or British Petroleum spoke in the Yukon’s slot, that would show that industry is supporting the Yukon’s stance on natural gas pipelines.  ...hearing from someone in the industry supporting the territorial government’s stance for two natural gas pipelines – one along the Alaska Highway and the other along the Mackenzie River – carries more weight with media than the same statements coming from a politician.  If Duncan’s place at the conference is taken by a company, Cunning said the premier will still probably attend the event....   *     CBC-Environment Minister Lorne Taylor says the prime minister's plan to deal with ratifying Kyoto is haphazard and the federal government does not understand the implications of initiating the environmental treaty.  (Our earlier links.)

9-26-02 Updates:  01:30, 02:00, 13:06, 13:15 ET.  ADN by Liz Ruskin, Washington -- President Bush called House and Senate energy bill negotiators to the White House on Wednesday, pressing them to finish their work on the bill and restating his support for drilling in the Arctic National Wildlife Refuge. "The president said, 'I want an energy bill, and I want ANWR in it,' " Sen. Frank Murkowski, said afterward. ... He and Murkowski said provisions that might spur construction of a pipeline for North Slope natural gas came up in the White House discussion but only in a general way. The administration has said it opposes the price guarantees Murkowski attached to the Senate bill.  (Note: today, Conference Chairman Billy Tauzin called for another meeting on October 1, 3 p.m., 325 Russell, primarily to vote on offers each side has given the other.  Already, the September 30 deadline is being passed and the Energy Bill is on borrowed time. Our commentary.  -dh)

 (Alaskan Insight)  Juneau-591,537 Alaskans will receive a 2002 Alaska Permanent Fund dividend of $1,540.76.  Revenue Commissioner Wilson Condon (NGP Photo, 2-19-02) announced the amount of the 2002 dividend at last night’s annual meeting of the Alaska Permanent Fund Corporation in Juneau.  "We can expect smaller dividends for the next few years," Condon said.  "The dividend is based on the fund’s average earnings over five years, and it will take awhile to overcome these low market years in that average."  The fund’s total market value at the end of Fiscal Year 2002, on June 30, 2002, was $23.5 billion, down from $26.5 billion on June 30, 2000.  Due to its resource wealth (receiving 80% of its revenue from oil and gas severance, property and income taxes plus royalties) Alaska has no statewide sales tax or personal income tax.  However, with Prudhoe Bay production at half of peak volumes, Alaska is now depleting its savings to fund what would otherwise be a $1billion annual deficit.  The reserve fund source of that revenue will be depleted in the 2004 time frame absent dramatically higher oil prices.  Condon reminded citizens that change is coming.  "Though some may choose to avoid reality, we are quickly approaching the day when Alaskans will have to help pay for the society we enjoy", he cautioned.  Politicians are now debating tough choices on taxing citizens/tapping the Permanent Fund.  A gas pipeline will only produce a fraction of the projected deficit, and though it is a large fraction the revenue could not be 'on stream' until 2010 or later.  Soon, Alaskans will have to 'bite the bullet' and face the reality of which Condon spoke.  (Readers may download Condon's full speech text here.  More on Alaska's fiscal crisis.)           -dh    *     Whitehorse Star-The territorial Department of Energy, Mines and Resources will lead a delegation of first nations and Yukon Contractors Association representatives on a study tour to examine pipeline construction and operations in Alberta this week. ...“This is a unique opportunity to see a pipeline being built in terrain that is similar to the Yukon,” Energy Minister Scott Kent said in a statement. “Delegates will examine first-hand most aspects of pipeline construction such as clearing, ditching, stringing, bending, welding, lowering-in, river crossings and reclamation.”  TransCanada Pipelines is constructing a 63.5-kilometre extension to its Westpath pipeline system in southern Alberta and British Columbia.   ...  BP Canada Energy Co. will also provide participants with an update on that company’s efforts to get an Alaska Highway pipeline project off the ground.  The 36-member Yukon delegation includes representatives of the Council of Yukon First Nations, the Kaska Tribal Council and the business community. They left Whitehorse on Air North Monday and will return Friday.     *    Anchorage Daily News, by Wesley Loy-The Knowles administration and Exxon Mobil Corp. have signed an agreement to streamline permitting for the proposed Point Thomson gas field on the North Slope.  (Announced in Governor Knowles' Monday speech.) *    In response to yesterday's editorial, "For The President and The Prime Minister", we heard from several readers:

• From a Calgary-based consulting firm manager to his employees: "Generally in this update to all of you, I try to put together something brief and concise that allows you to be updated but not inundated with too much verbiage. The VAST majority of my communication comes from one source, a public service website, Northern Gas Pipelines based in Alaska.  NGP...has put together an incredible editorial that weaves together much of the political, industry, and public commentary and dialogue, and ... the looming deadline of September 30th for the US Senate and House Conference on the Energy Bill. I suggest you all take a moment to read this piece. Leadership...at a very high level is the key to developing the right project, at the right time, and with the right players...."   Peter Jalkotzy

• From an Houston oil industry executive: "Once again I am compelled to send a short note  congratulating you for your singular commitment to progressing an Alaska gas pipeline. Like you, I've been disappointed in what appears to be near-total disregard for communication and cooperation between the involved parties to bring forward a project that would benefit the public good. Your thoughtful commentary today was very good; hope it provides the necessary spark to continue forward. Your vision and counsel to involved parties continues to be clear and without prejudice and I for one appreciate your hard work and patience.

• From a territorial executive.  As you know I'm from Inuvik in the N.W.T. originally, and now reside in Whitehorse where I manage oil and gas interests for the Yukon government.  I'm from "Yukon-uvik" as the News North newspaper so aptly characterized the relationship between Yukon and the Mackenzie Delta. I also enjoy many close friendships with my neighbors in Alaska. Like you I have been around the northern petroleum industry for some thirty years. In fact Justice Berger issued his final report on a Mackenzie Valley Pipeline the year I started my first year of University. I have always been concerned that the northern pipeline issue held the potential to divide rather than unite northern people, both in an inter-jurisdictional and intra-jurisdictional context. One only need witness the divisions in the Northwest Territories caused by the self interest of non vested parties for clear evidence of that.  I agree with my friend J.G., formerly of Gulf Canada and now ....  in Inuvik, that if northern pipelines aren't built this time (this time being the third for many of us) they won't happen for a very long time. Unfortunately the northern pipeline debate has been infused with so much rhetoric that it is hard for northerners or anyone else to understand what's really going on, or more importantly, to understand the context in which critical decisions will be made in the coming weeks.  Whenever one plays for "all the marbles" the risks are great and this is how the northern pipeline debate has been characterized. We are told that either Alaska, Yukon, or the Northwest Territories will "win" or "lose" amidst stranded gas, uneconomic projects or ill conceived project proposals. I believe the greatest risk to northern pipelines lies not in gas markets, but rather in the inability of northern stakeholders (broadly defined) to create an positive investment climate for projects to move forward. Unrealistic expectations, uncertainty, inequity and high costs present more of a threat to gas pipeline projects in northern Canada and Alaska than the fundamentals of the North American gas market.   -Greg Komaromi

9-25-02 News and Commentary Updates:  01:20, 02:33, 02:42, 11:29, 11:43, 12:28, 13:37, 14:00, 16:27, 17:18 ET.  Bill Wicker, Communications Director, Senate Energy Committee, advises that "today's Energy Conference meeting begins at 11:30 a.m. in 2123 Rayburn  (Here's your live link.)  It is anticipated that 1) the Senate will make an offer to the House on R&D provisions and 2) Senator Craig will move that the Senate make an offer to the House on hydroelectric provisions. There * may * be discussion on any or all of the remaining issues (electricity, ethanol, climate, ANWR, taxes, etc.), but nothing more than talk.  Today's meeting is likely to end at about 12:45 p.m., so Conference principals can attend a meeting on the energy bill with President Bush at 1:15 p.m. at the White House. (It appears the White House remains interested in the energy bill, which all of us see as encouraging.)"  (Note: Conference now over, 12:26 ET.  Chairman Tauzin said, "We are at a point that we could complete our work and conclude the conference by the end of the month".  Alaska issues did not arise today, but should in the meeting to reconvene tomorrow morning at 9:30, 2123 Rayburn. -dh)   *********    David Woodruff, Director of Communications, Senate Energy and Natural Resources Committee, kindly informs us that US Senator Frank Murkowski is scheduled to join a bipartisan group of Senators at a meeting with the President today to discuss the energy conference.   The closed meeting gets underway at 1:15 p.m. ET at the White House.  It could foretell the fate of northern gas pipelines and is timely relative to today's commentary.  (Related news at bottom of commentary.)

Note:  Faithful readers know we truly support the work of all northern gas pipeline project advocates.  It is thus in a cooperative spirit that today's page represents hours of reviewing historical and current events in light of imminent decisions.  For whatever creative ideas these thoughts provoke, we are grateful.  For whatever criticism they generate, we can only fall back on our commitment to give you our best public service effort.  The next two weeks will be critical.  We ask divine guidance for all involved.  -dh

For The President and The Prime Minister

It is easy for a non-combatant to criticize those in the arena...and often improper.  We therefore apologize for any impropriety in advance and do not mean to criticize.   This is just one humble witness from the wilderness recalling 30 years of Arctic gas pipeline inertia.  So, personalities aside, let's just agree that some of the world's largest energy projects awaiting destiny, now demand and justify the focused attention of country leaders.  Governors, commissioners, premiers, ministers and legislators are doing the best they can to work energy problems from the vantage point given them by their voters.  But when inter-jurisdictional disputes threaten ruin, national leaders must step in.   If they are content to captain gas pipeline policies adrift in swirling political currents, they can only achieve a chaotic outcome.  Last March, we counseled deeper involvement of country leaders.  While that was the imperfect recommendation of a neutral observer, we still support the thesis: communication.  Based on the conscientious positions taken by the distinguished yet subordinate leaders below, we now predict an unhappy outcome, complete with a few celebrants and many bitter losers.  Simply, the gas pipeline situation--influenced by US trade policy, ANWR and terrorism travails--must be addressed by President Bush and Prime Minister Chrétien along with their smartest advisors, beginning a new dialogue with no preconceived outcome.  (Someone like Congressman Billy Tauzin would make a fine facilitator.)  Presumably, those leaders will have their subordinate stakeholders in the anteroom, available for frequent consultation.  In this way, we might see an agreeable outcome for Continental gas pipeline policy that will strengthen rather than erode the relationship between these neighbors, these trading partner brothers.   An easy solution for politicians faced this month in Washington with the intransigent positions below, is do nothing, or do something based on constituent pressure.  The most difficult and right course of action is for elected leaders of countries to adopt the mantle of statesmanship.  They should undertake the Olympic effort and sacrifice required for diplomatic success.  Not all heroes are found on the battlefields of true war and some go without recognition, unsung.  Not all national emergencies are threats from abroad and some miss the media spotlight, unappreciated.   Absent a Herculean diplomatic effort by our principal leaders, the gas pipeline future could soon resolve itself through regional, political warfare: leaving broken projects, bitterness, winners and losers in its wake--like the trodden path of Mongol hoards who've sought to gratify their own self interests.  We see gasline saber rattling from coast to coast.  Where is the statesmanship, the leadership?  Where is the communication, the unity of purpose?  Is political dissention among friends the only answer Mr. President, Mr. Prime Minister?  Respectfully,   -dh

    US SENATOR HOLDS POSITION ***** GNWT MINISTER HOLDS POSITION

WALL STREET JOURNAL TAKES POSITION  *****  ALASKA'S GOVERNOR DEFENDS POSITION 

NORTHWEST TERRITORIES' STRONG STAND *** YUKON TERRITORY'S STRONG STAND

MORE WEDNESDAY NEWS: At the U.S. Chamber's Energy Summit yesterday, energy bill Conference Chairman, Billy Tauzin said an acceptable energy package was the Bush Administration's, "2nd highest priority."  He made an articulate and impassioned plea for a modest ANWR provision, saying he would be offering a "very attractive package" to the Senate, which our readers know did not include the ANWR provision in their version of HR 4.  Senator Jeff Bingaman noted the strong opposition in the Senate to ANWR, but said that a deal he couldn't disclose was in the works.  We speculate that the 'deal'  could be a primary focus of today's meeting between conferees and the President.  -dh  (From monitoring Stephanie Stanton's report on Williams Energy News Live via Windows Media Player.  300K)

9-24-02 Updates: 00:43, 02:30, 03:14, 03:31, 04:44, 05:06, 05:37, 06:07, 06:30, 07:13, 11:37, 11:53, 12:23, 13:06, 13:21, 16:40 ET.Secretary of Energy Spencer Abraham (NGP Photo) visited Alaska yesterday, flying back to Washington last night in time for a Cabinet meeting and U.S. Chamber energy summit today.  Find links to stories and today's editorial, below.  -dh      *      BALLOT INITIATIVE NO. 3.  Yesterday, Anchorage Chamber Chairman George Vakalis, moderated noon presentations both for and against Ballot Initiative No. 3, first introducing Northern Gas Pipelines’ Dave Harbour to provide an objective briefing on the initiative itself. (Note: in the near future, we shall be providing readers with an editorial opinion on this issue.  -dh)  Scott Heyworth (NGP Photo-r) spoke in favor of the initiative and Larry Houle (NGP Photo-l) opposed the initiative.  (PLEASE CLICK FOR OUR COMPLETE REPORT, PHOTOS AND PRESENTATION DOWNLOADS. -dh )     *     Honorable Spencer Abraham, U.S. Secretary of Energy (NGP Photo, 9-23-02-l), addressed the Alliance's 23rd Alliance Annual Meeting last night, surrounded by a big slice of Alaska's business and political leadership.  Alliance President, Bob Stinson welcomed Abraham and a sold out Sheraton Anchorage ballroom of executives from throughout Alaska, then invited Governor Tony Knowles (NGP Photo-R, 9-23-02) to the podium, who made a special announcement about Point Thompson.  ...  Stinson asked US Senator Frank Murkowski (NGP Photo-l), traveling with Secretary Spencer, to the podium.  Murkowski emphasized to the audience the importance of this week's energy bill Conference meeting, saying that some provisions may have missed the attention of Alaskans....  In his remarks, Abraham emphasized the importance of Alaska to President George Bush's proposed national energy policy, contained in separate House and Senate versions of HR 4.  "We need ANWR;" he said, "we need a new pipeline to bring Alaska gas to the Lower 48...."  The energy bill conference is meeting again this week to resolve differences.   (PLEASE CLICK FOR OUR COMPLETE REPORT, PHOTOS, PRESENTATION DOWNLOADS.....AND, OUR EDITORIAL COMMENT. -dh)      *      Bill Wicker, Communications Director, Senate Energy Committee, sent us a message last night: "The House Energy and Commerce Committee has indicated that the next Conferee meeting on the energy bill will be this Wednesday, Sept. 25, at 11:30 a.m. in 2123 Rayburn. We're told that it is Chairman Tauzin's hope that the conference will address a Senate offer on electricity, and such other matters as may be ripe for action. An official notice and agenda should follow soon.  (Note:  We expect Alaska issues to be on the agenda for Wednesday's meeting, or another meeting later in the week.  Congressional staff are working behind the scenes to identify compromises and areas of agreement that might facilitate Conference negotiations, debate. See last week's projection of action.   -dh)      *      For latest energy bill intelligence, Williams Energy News Live's Stephanie Stanton has this report: The U.S. Chamber of Commerce will hold a summit on the national energy policy Tuesday (today) in Washington. A long list of policymakers and regulators affecting the energy sector will participate. Energy Secretary Spencer Abraham, FERC Chairman Pat Wood and the chief negotiators of the energy bill talks, Rep. Billy Tauzin (R-LA) and Sen. Jeff Bingaman (D-NM), are all scheduled to speak. We'll have reports from the summit throughout the day from the Washington bureau.       *    Reuters- ...Interior Secretary Gale Norton told Reuters that she would recommend the president veto an energy bill that did not include opening the Arctic National Wildlife Refuge to oil companies. ... Fleischer declined to say if President George W. Bush would veto an energy bill without the Alaska drilling provision, saying only that the president was continuing to work with lawmakers.  "The president thinks it's even more important now than ever for the Congress to pass legislation that maximizes America's energy independence," he said.        *       Canadian issues are intertwined.  -dh  Northern News Services, Yellowknife - There will be no Mackenzie Valley pipeline until the Aboriginal Pipeline Group is on board. And the APG can't get on board until it has money. The $70 million question is: When will the APG have the money.  "Not within the next week or two," said former Alberta premier Peter Lougheed, but he added the feds will probably ante up within the next two months.  "You can't have this without aboriginal involvement," he said, referring to a pipeline that would carry Arctic natural gas southward following the Mackenzie Valley. ... The $70 million for research is probably the APG's biggest cash-related hurdle because there is nothing to secure the money with. Those funds are needed for community consultations, environmental and engineering studies before a rock-solid commitment is made. ... Imperial Oil Resources officials say they want gas flowing down the pipe before the end of 2007. The urgency is partly because of a competing proposal coming from Alaskans. Americans are pondering an energy bill that could include subsidies which make a natural gas pipeline following the Alaska Highway very attractive.  "If the Alaska pipeline goes ahead before a Mackenzie Valley pipeline then a Mackenzie Valley pipeline will be delayed a very significant number of years," said Lougheed.  The Americans have set a deadline for themselves to complete the energy bill by the end of the month.  If the Mackenzie pipeline project goes to the construction phase -- and it looks like it will -- the APG will need another $1 billion. "There are going to be a lot of twists and turns in the road," said Lougheed.  (Reference.)

9-23-02 Updates: 00:20, 00:51, 17:58 ET.  Today, Anchorage will host (and we shall report tomorrow) on two important events:

• At noon, the Anchorage Chamber of Commerce  (Phone: 907-272-2401) heard advocates and opponents discuss Proposition 3, appearing on Alaska's election ballot in November.  Your author provided a review of the proposition.

• This evening, US Energy Secretary Spencer Abraham is scheduled to address members of the Alaska Support Industry Alliance (Phone:  907-563-2226) at the Sheraton Anchorage Hotel.  However, we are told the Secretary is recovering from an illness and was forced to cancel his North Slope trip today.

Northern News Services by Mike Bryant, Yellowknife - A proposed subsidy on Alaskan gas may not be dead after all.  Minister of Resources, Wildlife and Economic Development Jim Antoine (NGP Photo, 11-29-01) was in Washington last week to convince the U.S. State Department, legislators, and oil and gas representatives, not to support a joint Senate-Congress energy bill that could give an Alaskan pipeline route up to $31 billion in subsidies and loan guarantees. ... Last June the U.S. Secretary of Energy Spencer Abraham threw cold water on the energy bill, saying the Bush Administration was not in favour of subsidies and might veto the bill if legislators attempt to pass it. (Friday's Gas Pipeline Incentives Commentary.   Look in the weekend report below for more fallout on Friday's Wall Street Journal editorial.    *     CALGARY (CP) - Canada has renewed its fight against potential American subsidies for a future natural gas pipeline from Alaska, saying such efforts could depress prices and slow down future production. As U.S. lawmakers considered a new proposal for floor prices and loan guarantees to spur a multibillion-dollar pipeline project, Canada's ambassador to the United States, Michael Kergin, said such a plan would distort the gas market.     *  CBC, CALGARY - An announcement from one Alberta company to reduce spending in the oilpatch by $9 million has Alberta's Energy Minister trying to gage the outcome Kyoto ratification.  "I hope it's just a one-time issue," says Murray Smith (NGP Photo, 11-29-01). "But I'm not sure. This could be a signal."  On Thursday TrueNorth Energy Corp. announced plans to spend $5 million on a northern oilsands plant instead of $14 million. The company's president warns the $3.5 billion dollar project may be abandoned if the environmental treaty is ratified.     *     National Post, CALGARY - Murray Smith, Alberta's Energy Minister, yesterday launched a scathing attack on the Kyoto Protocol on climate change, saying it could cost the province up to $10-billion in future oilsands investment.    (Our earlier report & links.)

9-21/22-02 Weekend Updates.  Sunday Morning-Anchorage Times comments on WSJ editorial opposing mandated route and gas pipeline incentives.     *        ADN by Liz Ruskin, Washington -- A Wall Street Journal editorial has eroded congressional support for a proposed Alaska natural gas pipeline, said Sen. Ted Stevens (Photo). The House and Senate negotiators working on the national energy bill agreed last week to mandate a southern route, carrying the North Slope gas through Alaska on its way to markets in the Lower 48. Alaska's political leaders favor that route.  But Thursday's "malicious" editorial in the Journal -- titled "Alaska's Pipe Dream" -- reopened the matter, Stevens said Friday.  "The agreement, we're told, is off," he said. "There is no agreement right now on the right of way."  The editorial criticized both the route requirement and a financial incentive package intended to encourage construction of the $20 billion project. ... "I don't think you can get the bill moving as long as you have this position taken by an entity like The Wall Street Journal," Stevens said.  (See our report & link to WSJ article.)   (Please note WSJ first reference to current gasline issues: Kerigan Op-Ed piece last May.  -dh)    *    Reuters, WASHINGTON - The Bush administration on Thursday repeated its call for more domestic oil drilling to ease the nation's dependence on foreign oil as OPEC keeps a firm grip on oil production. ..."The (gasoline) price to the American consumer will go up. The price of oil will go up," said Republican Sen. Frank Murkowski of Alaska.  Murkowski said OPEC's decision shows the United States must reduce its dependence on Middle East oil, which he said was "controlled by those countries that basically have funded terrorism." ... Republican Sen. Conrad Burns of Montana also slammed OPEC's decision, saying the cartel only acts in its own interest.  ... "Basically, we're giving them the money to blow us up," Burns said. ... On Wednesday, Interior Secretary Gale Norton told Reuters that she would recommend the president veto an energy bill that did not include opening the Arctic National Wildlife Refuge to oil companies. Democrats oppose drilling in the Alaskan refuge, citing potential environmental damage, while Republicans say the vast wilderness could be safely developed for oil rigs.      *     CBC-Inuvik, N.W.T. - Inuvik's mayor won't have any opposition for his bid for another term in the town's top job. Peter Clarkson (NGP Photo-6-02) is running unopposed in the upcoming town election.     *     ADN on Fiscal Gap.    *     David Reaume (Photo),  ADN Op-Ed -...The simple truth is that, barring a near miracle increase in crude oil prices, the state's only options are 1. politically impossible large cuts in state spending (recall how hard it was for the Republican legislative majority to cut a mere $250 million less than 10 years ago); 2. an impossibly large cut in Permanent Fund dividends (remember the recent referendum); or 3. new taxes. Faced with these choices a truth-telling candidate for governor of Alaska would lay it on the line.  ...neither candidate has a strong incentive to be a truth teller. The first one to tell the truth loses!

9-20-02 Updates: 01:35, 02:24, 02:44, 03:20, 10:03, 13:16, 13:57, 14:22 ET.   Globe & Mail, by PATRICK BRETHOUR and STEVEN CHASE-Kyoto Cited As Oil Sands Project Put On Ice. (Our opinion.)      *        National Post, by Tony Seskus and Claudia Cattaneo, CALGARY - Jean Chrétien came to the heart of the oilpatch yesterday to defend the Kyoto accord on climate change, promising to spread the burden fairly across the economy and the country.  (Reference: Our earlier links.)     *     Canadian Press-(When I read the term 'Economic Nationalism' in this article by Chris Morris, I thought of my home state, Alaska.  But the article referred to New Brunswick/Nova Scotia on the other side of our continent.  The NEB acted to temporarily restrain nationalism in favor of free trade for now, but, as in Alaska, self interest waits restlessly at the door, impatient with facts, free markets and the merits of an argument. -dh)     *      Whitehorse Star-Fast-tracking a Mackenzie Valley pipeline would place northern wildlife and traditional lifestyles at risk for the sake of big company profits, warns the Canadian Parks and Wilderness Society (CPAWS).               *     Globe & Mail, 9-19-The U.S. Federal Energy Regulatory Commission has approved a proposed underwater natural-gas pipeline between Vancouver Island and Washington state.        *      WASHINGTON.  While yesterday's Energy Bill conference did not address Northern Gas Pipelines issues, we learned more about Member interests by observing their debate live via web cam today and hope you joined us.  As a former Congressional and state lobbyist, I must say that following committee meetings via the web is very convenient.  We are also indebted to Bill Wicker, Communications Director, Senate Energy Committee, for his timely updates.  Rather than using my report, let's just use his, below.  (Also, the ADN's Liz Ruskin provides this good status report.)  -dh 

"The energy conference continued its progress {yesterday}, with major movement on two key issues: 1) agreement on a modest CAFE measure and 2) commencement of the great electricity debate.  1) Staff negotiators brokered the CAFE compromise that Conferees adopted {earlier}. It will require that minivans, SUVs and pick-up trucks in model years 2006 through 2012 use at least 5 billion gallons less gasoline than the 2002 model year fleet. Staff negotiators also removed a provision in the Senate-passed bill that would have exempted pick-up trucks from future mandated increases in mileage standards, and dropped Senate bill language that would have required the government to consider the effects that higher mileage requirements would have on vehicle safety and autoworker jobs. (That latter provision would have made it harder for the Transportation Department to develop stricter fuel economy standards.)  Also ... the House made an offer to the Senate on electricity. That makes electricity the pending business before the conference. The Senate will consider the House offer and act on electricity/RPS when Conferees next muster.

"NOTES: Today marks the end of once-a-week conference meetings. With a Sept. 30 deadline nearing, the pace will quicken, with multiple-day meetings next week. Chairman Tauzin says he would like to meet next Wednesday and Thursday, both at 10:00 a.m., and that he wants next week's agenda to include ethanol.  Staff work is also intensifying. For example, the much anticipated tax walkthrough with Senate Finance and House Ways & Means will take place tomorrow (presumably on gas pipeline incentives). Staff also is working hard on the other remaining Tier I issues, including climate change and oil and gas/ANWR. There are a handful of Tier II issues, too, that are near resolution."  -bw 

 (Gas Pipeline Incentives Comment.  So called 'tax' issues noted above, include reference to a gas price floor guarantee and a loan guarantee included in the Senate but not House version of HR 4.  Our readers know that some important voices have spoken against any market manipulation and that other alternatives have been discussed.  (Ref.  Ref.)  In August, we reported that one alternative was a floor guarantee priced at the wellhead ($1.35) instead of the Alberta hub (3.25), with payback provisions.  This week, staff members are discussing the alternative of a 'production tax credit' that begins to phase out at field prices above $0.83/MMBtu. At $1.35, the credit would be zero.  Such creative financing could, in effect, arrange for the taxpayer to provide guarantees that reduce financing charges (i.e. tariffs) and, ultimately, consumer prices.  Expect to hear more alternatives discussed as we approach the end of the month.  While the Senate version creates a potential $10 billion gas pipeline loan guarantee, staff is now discussing an alternative of making a loan guarantee apply to 80% of the capital investment, basically covering the debt portion of a typical, large project.  Thus, on a $20 billion project (simplified and generally stated), the government could guarantee up to $16 billion rather than up to $10 billion.  Most Members are aware that should the energy bill pass with no incentive legislation, America's energy policy for the foreseeable future will be one that doesn't include a conduit to the country's largest reservoir of proven gas reserves.  Critics say Alaska gas should only move south when market forces demand it without incentives/subsidies.  Still others counter that if taxpayers are not willing to provide 'modest' guarantees to allow creation of an Alaska gasline now, consumers (a class nearly identical to the 'taxpayer' class) will pay that amount and more purchasing offshore LNG and other more expensive gas supplies, not including a balance of payments penalty.  With a two week deadline, Congress must consider many complex and conflicting alternatives while performing in the spotlight on a public stage as November elections approach.   It is an historic and challenging time for them and for all of us.   -dh)

9-19-02 Updates: 00:12, 01:13, 11:32, 12:45, 16:41, 17:37, 18:12 ET.