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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, ANS, APG, APWG, ANGTA, ANGTS, AGPPT, ANWR, ARC, CARC, CAGPL, CAGSL, FPC, FERC, GTL, IAEE, LNG, NEB, NPA, TAGS, TAPS, and more... 2008 LINKS:
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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 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
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Northern Gas Pipelines: Alaska Support Industry Alliance, 2002
2001-02 President Bob Stinson, President, Conam Construction Co. (1-02) 2002-03 President Jack Laasch,
Executive Vice President, Natchiq, Inc. (10-02) Alliance General Manager, Larry Houle (2-02) See 2001 Alliance Archives Here 2002 Activities
12-13-02. Alaska MMS Regional Director John Goll (NGP
Photo) addressed the Alliance this morning, drawing attention to the
12-7/8 Weekend Updates: BALLOT MEASURE #3.
ADN by Larry Houle- 11-22-02. Valdez Star--The man who led the battle against Proposition 3 was Larry Houle, general manager of the Alaska Industry Support Alliance.
Laasch had earlie Meyers briefed Alliance members on the recent evolution of the company, describing recent acquisitions of Phillips (ARCO and Tosco) and Conoco (Gulf). The final ConocoPhillips merger earlier this year resulted in creation of the third largest oil & gas company in the U.S. and the country's largest refiner. The company markets under a number of well known brands, including: Conoco, Phillips 66, Mobil (in the North East), Exxon (in the Mid Atlantic region), and Union 76 (in the West). The company owns about a third of Duke Energy Services. Upstream, ConocoPhillips is the sixth largest oil reserves owner, of which 27% is attributed to Alaska. The company is the world's 6th largest producer, is #5 in the Lower 48, #5 in Canada, #4 in the North Sea and #1 in Alaska. It operates in 49 countries worldwide. "Our objective," he said, "is to grow our assets. We will be disproportionately investing upstream in the future." Of more interest to our Canadian readers was Meyers' reference to Syncrude activity which remains a priority of the company in near term, mid term and long term (2008-10) planning. Focusing on Alaska, Meyers reminded Alliance members that ConocoPhillips is Alaska's largest oil producer, is a 26.7% owner of the Trans-Alaska Pipeline and is dedicated to achieving Alaska North Slope gas sales within a decade. "Last year," he said, "gas producers spent $125 million on a work program to quantify costs and benefits and identify risks associated with a gas pipeline." He said the next step is to justify and mitigate risks associated with a gas pipeline project and highlighted the value of the energy bill now under Congressional consideration. The bill provides an expedited review process for an Alaska gas pipeline and federal support to mitigate risk. He said that when Congress returns from its mid-term election break, the energy bill conference could complete its work and that, "...we will be working with everyone involved to resolve the issues." At the conclusion of his presentation, Meyers showed an Alaska landscape slide, the lowered sun half below a horizon, suggesting it could be either a sunrise or sunset. He said Alaska contained a 'legacy asset' for ConocoPhillips, reminding the audience that Alaska investments compete with other worldwide opportunities. He suggested that members help in establishing "a positive, and fiscally stable environment" for investors. "Over the next few years," he said, "we'll struggle with the state's fiscal gap." He said the state would make a mistake if it turned to the oil and gas industry to fill the fiscal gap. He said improving the state's permitting (regulatory) process could help. He added that such positive changes would attract 'new players' but that fiscal issues would cause them to weigh their decisions carefully. Positive changes and new players, he said, could assure that Alaska was facing a sunrise and not a sunset, that the state would attract new discoveries rather than being left to "manage declining resources." In a question period, your author asked for Meyers' position on Ballot Proposition #3 (described below) with special attention to the eminent domain feature of the legislation a positive vote would create. He said the industry had worked hard to identify ways of moving North Slope gas to market. He said, "there is no law that will force industry to invest in an uneconomic project." Meyers said his and other companies had researched LNG concepts and, "do not see an economic project." On the eminent domain issue, Meyers asked, "How would you react as an investor? ...this could have a catastrophic impact in Alaska." Former Alliance president, Bob Stinson asked if there could be other legislation than the energy bill to support Alaska gas pipeline progress. Meyers said a stand-alone bill is less likely to be approved than gas pipeline provisions within a larger energy bill. (Note: since our objective is accuracy of archives, Northern Gas Pipelines invites anyone to provide us with additions or corrections to our reports. -dh) References: Ballot Language, The New Statute, Outline of Statutory Provisions, Anchorage Chamber Forum, and Proponents Earlier this month, the author participated in an Anchorage Chamber of Commerce forum featuring a proponent and an opponent of Ballot Measure 3, which, if approved in the November 2002 general election, would create the “Alaska Natural Gas Development Authority.” Links to the Chamber forum are above, along with ballot language and – importantly – the statutory language every voter would be responsible for putting in place with a ‘yes’ vote. Ye Marks said that citizens entering the voting booth will see only a paragraph of language. “If they vote for it,” he said, “they will unknowingly approve an 11 page statute.” He described the new government entity created by the statute: its board, mission, staff, powers and budget. He drew the Alliance audience’s attention to several ‘findings’ of the new statute that are “particularly disturbing”. Finding #7 says Alaska’s producing companies, “…have competing gas reserves in other parts of the world vying for the same markets, creating a conflict of interest for them in advancing the sales of Alaska gas.” Marks pointed out that a company with only Alaska gas reserves would have the same difficulty marketing high-cost ANS gas. Finding #9 again refers to alleged conflicts of interest and says, “…it may be necessary to take the gas back.” Approval of and action upon this concept could result in a new era of litigation. Marks described gas pipeline economic considerations to the audience and contrasted them with oil pipeline efficiency. “In 1973” he said, “Alaska couldn’t build the oil line fast enough.” Four times more BTUs can be transported in an oil pipeline than in the same size gas pipeline. The pipeline itself costs ‘about the same’, he said, but transportation costs in a gas pipeline will consume much of the gas value. He said that in any market, “…consumers buy lower cost gas first. Alaska’s geography, its distance from the market, makes it high cost, ‘end of the line’ gas, he said. Since the new “Authority” would have the power of eminent domain, Marks suggested there could be a threat to the producers of ‘coercive action’. The creation of an Authority with such powers, in itself, would be a distraction to other ‘serious’ gas pipeline projects, he pointed out. Marks said the Authority’s charge to produce a plan of action in a year was unrealistic. He noted that Alaska gas producers had spent $150 million in the last year and one-half on a pre-feasibility study of the most feasible two gas pipeline alternatives. He noted the $250 million Mackenzie Valley gas pipeline feasibility study now underway. He said the state did not have ready funds for such studies, that investors would be difficult to identify. He said that the entire concept of a 100% debt financed mega-project—especially in wake of the Enron catastrophe—worked against investor interest in a project without the underpinning of equity investment. The author visited with Alliance General Manager, Larry Houle, following the presentation. Houle said, ““Companies have looked very hard at the LNG commercialization option for many years, spent millions of dollars to determine that Alaskan LNG is too costly to bring to markets. The Pacific Rim”, he said, “has over 20 times the reserves of Alaska’s North Slope, all at tidewater. The cost of the 800 mile pipeline, required to get Alaskan LNG to market, would provide Alaska gas with the highest marginal cost on the market.” Asked about competing LNG projects, Houle said, “Alaska cannot currently compete with other Pacific Rim LNG projects. Not only are other projects not burdened with long pipelines but, they are closer to the end-user markets than Alaska. “ Houle seemed particularly aware of the new statute’s effect on Alaska’s oil industry. “Several of the Initiative’s provisions, like the eminent domain section … give me great concern. This Ballot Measure, if passed, could be devastating,” he added. “It provides for one specific, non-economic pipeline from the North Slope to Tidewater, thereby eliminating other gasline options. Since when is it a prudent business decision to eliminate options?” (Note: Northern Gas Pipelines always invites additions or corrections to its reports, as accuracy of our permanent archives is our goal. Wishing the photographer always did justice to the photogenic models, we nevertheless provide several event photos below.... -dh
9-
 24-02.
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
collection of Alaska's business and political leadership. Alliance
President, Bob Stinson (NGP photo-above), Conam Construction Co.)
welcomed Abraham and a sold out Sheraton Anchorage ballroom of executives from
throughout Alaska, then invited Governor Tony Knowles (NGP Photo,
9-23-02) to the podium.
Knowles thanked Abraham and his wife, Jane, for
"...a lifetime of public service," and said that Alaskans, "...deeply
appreciate your championing the opening of A
 NWR."
He lauded the Alliance's leadership saying, "...no other industry fuels Alaska
like the oil patch. Through innovative partnerships, new legislation and
aggressive marketing, together we've revitalized Alaska's oil and gas
industry." Knowles announced that earlier in the day, Natural Resources
Commissioner Pat Pourchot, signed a memorandum of agreement with
ExxonMobil positioning the state as a "one-stop-shopping center for permits"
related to development of the company's
Point Thomson field on the North Slope. Anchorage business
consultant, Dick LaFever, will coordinate the effort among the parties.
Then, with Secretary Abraham listening intently, Knowles read a '300 word'
statement he sent yesterday in response to last Friday's
Wall Street Journal
gas pipeline editorial. (You
may click here for Governor Knowles' complete speech, which includes his WSJ
editorial response.)
Stinson asked US Senator Frank Murkowski,
traveling with Secretary Abraham, 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. These include an effort to provide a 'heavy oil tax credit
of $3/bbl," giving substantial incentive for development of billions of
barrels of Alaska North Slope viscous oil reserves; and, programs to reduce
the cost of electricity in rural and remote areas. He said that without
"Washington's help", the risk involved in building a $20 billion pipeline
project would be "too large and the gas would stay in the ground." He
acknowledged that Interior Secretary Gale Norton has said that if ANWR
is not approved by the Congress, she will recommend that the President not
approve an energy bill. Then, in providing a final introduction to the
Secretary, he said, "At every turn in the road, Spence Abraham has been a
committed ally of Alaskans."
Abraham's Alaska visit yesterday ended a trip to
Japan for meetings with oil ministers and he urged Congress to pass the
President's energy legislation. He spoke in support of domestic
production in ANWR. "We need ANWR; we need a new pipeline to bring
Alaska gas to the Lower 48; we need electricity law reforms; and we need
Congressional passage of the other recommendations the Administration has
advocated.... We need the energy security and the jobs such legislation
will create," he said. Offering bi-partisan kudos (which we consider
both justified and smart), he said, "I give Congress, and particularly
Senators Murkowski and Jeff Bingaman, and Chairman Billy Tauzin
and Congressman John Dingell a great deal of credit for moving forward
in such a constructive way over the last year. With their leadership and
your support, I believe we will succeed." (Later today, you may click
here for Secretary Abraham's' complete speech.
Please see our editorial opinion below.
Don't miss
our Alliance photo gallery.)
"A Chapter in the History Books"
The Alliance
event, to an observer and member of the organization, was a great success.
Secretary Abraham reflected the Administration's wholehearted commitment to
ANWR and gas pipeline development. Reciprocating, Governor Knowles and
Senator Murkowski expressed admiration for the Administration's work and for
the diligence of Secretaries Abraham and Norton. Northern Gas
Pipelines readers know there is a bigger story playing out behind the
scenes and we recall that "Politics is the art of compromise." The
Administration and their
Canadian counterparts have
expressed a free enterprise philosophy that we so much respect: "let the
market and the investors determine the routing and financing of a pipeline
with minimal government interference (with the exception of expediting
legislation and large project loan guarantees)." We would have
preferred this approach all along. We believe it would have produced
quicker projects, of higher value, with less intrigue, complexity and
ill-will. But that is ancient history and the sides are now committed:
all or nothing...or perhaps compromise? After tough negotiations between
Congressional and White House staff from August through this week, all parties
have come to know that for an energy bill to pass, compromise will be
required. ANWR, ethanol and other issues aside, for the moment, a
spectacular development is evolving with respect to gas pipelines.
Today's Canadian news report expresses optimism for Federal funding of the
Aboriginal Pipeline Group's (APG's) participation in the high-momentum
Mackenzie Valley Pipeline. That would be a
different version of Federal support than
Prime Minister Chrétien has opposed on the U.S. side. Congress has set a
September deadline for energy bill work this year and Iraq confrontation is
fast approaching, along with the need for maximizing domestic energy
production. President Bush may be able to succeed in derailing the Congress'
northern route prohibition, but if he does not accept Alaska gas pipeline
incentives, here's a pessimistic scenario. No Alaska pipeline will be
built at this time. The U.S. will satisfy its growing demand for natural
gas with cheap LNG imports and other sources. The Mackenzie line will
move ahead and be built. By 2004, Alaska will be in deep, fiscal crisis and
industry investment will be minimal. Alaska will have a choice of
piggybacking on the Mackenzie line via a northern route connection (i.e. made
difficult with passage of prohibition laws), or possibly wait until the next
decade for a project to be feasible. Meanwhile, the U.S. will be paying
for gas imports by exporting U.S. dollars, exacerbating the balance of
payments deficit and also exporting jobs it could have had with an Alaska gas
pipeline. This will also hurt America's largest trading partner, Canada.
If the stars and other heavenly bodies soon come together, at just
the right altitude and with just the right compromising attitude, an
optimist might see this sort of scenario:
9-24-02. BALLOT
INITIATIVE NO. 3. Yesterday, Anchorage Chamber Chairman George
 Vakalis,
moderated
 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. 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 )
6-4-02
 Updates: 01:07, 01:33,
11:31, 12:14, 14:25, 18:55 ET. Premier Ra lph
Klein and Governor Tony Knowles today signed a memorandum of
cooperation. At the same noon forum, the Alaska Support Industry
Alliance's president, Bob Stinson (CONAM
Construction Co.) signed a memorandum of understanding with Roger L. Soucy,
President of the
Petroleum Services Association of Canada. Above right, left to
right: Larry Houle, Alliance General Manager, Klein and Knowles
standing; Soucy and Stinson seated.) Click here
for the day's photo gallery. Below is our complete report.
Below the report, are document download links.
Alaska, Alberta and Support Industries Sign
Cooperation Pacts
Gov.
 Tony
Knowles (NGP Photo-l) and Alberta Premier Ralph Klein (NGP Photo-r)
today signed a
 Memorandum
of Understanding and cooperation between the two governments following talks
between the two leaders. The Memorandum calls for the appointment of a
council of Alaskans and Albertans to advance areas of cooperation from energy
development and improved transportation links to aboriginal issues and
northern health improvements. "With work underway toward development of
an Alaska Highway natural gas pipeline that would deliver gas to North
American markets through Alberta’s vital energy hub, it is high time to
formalize our relationship to ensure we both benefit from such development,"
said Knowles, who spoke with Klein before a meeting of the Alaska Support
Industry Alliance in Anchorage. "Alaska enjoys close contact with our
immediate neighbors in the Yukon and British Columbia. The strengthening
of friendly and mutually beneficial bilateral relations with Alberta is the
next logical step in our developing relationship with Canada."
"Alberta and Alaska share much
in common--northern climates, abundant natural resources, thriving oil
and gas industries, and strong pioneer spirits," Klein said in a press release
issued by his office. "This will be a good opportunity to forge closer
and more formal linkages between our governments." In remarks to the
Alliance meeting today, Knowles noted current economic ties between Alaska and
Alberta as well as promising opportunities.
Canada is Alaska’s number 3
trading partner, with Alaska exports to Canada jumping 14 percent last year.
Knowles recently named an Alberta-based company that operates in Kenai,
Agrium, as the 2001 Governor’s Exporter of the Year. The Governor also
noted that a Calgary company, EnCana Corporation, was among the successful
bidders in Monday’s oil and gas lease sale in the National Petroleum
Reserve-Alaska. That follows last month’s state North Slope Foothills oil and
gas lease sale in which Canadian firms helped the sale set a record for the
single largest acreage sale in Alaska’s history.
Under the Memorandum of
Understanding Alaska and Alberta agree to pursue the following objectives:
a) To promote common goals by encouraging cooperation and understanding between governments, businesses, legislators, and citizens of Alaska and Alberta; b) To develop informal dispute avoidance and resolution processes to address potential cross border concerns; c) To work cooperatively to influence our respective federal governments' policies and decisions in areas of interest to both regions, in recognition of the fact that certain issues are beyond the jurisdiction of Alaska and Alberta; d) To learn from each other's best practices and the world-class expertise in specific sectors that are found in both jurisdictions. Members of the Alaska-Alberta Bilateral Council will provide direction on bilateral issues, review achievements, and explore new areas for cooperation. Council delegates will include legislators, government officials, and representatives of private industry. Meetings of the Council will be held annually, alternating between Alaska and Alberta. "While the gasline is an obvious, immediate link between Alaska and Alberta, the Council will facilitate cooperation in a number of others areas," Knowles said, including: * Transportation, including the Alaska Highway and exploring the viability of establishing direct commercial air service between Alaska and Alberta; * Aboriginal issues, including resource development, tourism, education, health and wellness, and culture; * Trade and investment, including business information exchanges and joint business partnership opportunities; * Northern sustainable development issues, including cold weather technology, environment, and telecommunications; * Northern health issues, including rural sanitation, air quality, and wild and traditional food safety; and, * Tourism including marketing. Following the signing of the Memorandum of Understanding, Knowles and Klein witnessed the signing of a similar agreement formalizing communications between the Alaska Support Industry Alliance with its Canadian counterpart, the Petroleum Services Association of Canada. In part, the document called bilateral cooperation between the two organizations "desirable and warranted" based on broad, shared goals and objectives as well as the "potential development of a cross-border pipeline to carry Arctic natural gas to market." The two organizations then resolved to, "...establish a relationship founded on international friendship, a desire to ensure coordination and cooperation and a resolve to work closely to achieve common objectives...." Following Tuesday’s activities in Anchorage, Premier Klein left for Dawson in the Yukon Territory for a meeting of Premiers of Western Provinces. Gov. Knowles will join Klein and other premiers in the Dawson meeting today and Thursday. (See related 6-4-02 story.)
5-24-02:
Yesterday, Dr. Scott Goldsmith, discussed the state fiscal crisis (i.e.
as he has for the
past two-plus decades) at this spring's last semi-weekly meeting of the Alaska
Support Industry Alliance. Goldsmith, Director of the University of
Alaska's Institute for Social and Economic Research, provided an updated
review of 'A Generic Fiscal Plan for Alaska', presented to the Alaska House of
Representatives Finance Committee on March 19. He said Alaska's annual
budget is larger than most people think, over $8 billion. The $2.404
operating budget is typically discussed, of which only about $400 million
comes from non-oil sources. An additional $2.082 billion comes from
restricted Federal sources, about half of which is used for operating expenses
and the balance for capital projects. Permanent fund earnings consist of
about $1.799 billion and 'other' areas of $1.748 billion are off-budget items
such as the Airport. All of the $8 billion in public funds spent
annually are about half of Alaska's household income of approximately $16
billion. In 1999, Goldsmith said Alaska spent about 275% per capita of
the national average for state expenditures. He said that if that figure
were adjusted to eliminate unusually large, recent Federal appropriations, a
cost of living adjustment and Permanent Fund distributions, Alaska would only
be spending about 146% of the median per capita state expenditures. He
said that between 1991 and 2001 Alaska's population had increased by over 10%
with prices up 20%. During the decade, however, general fund spending
was down 12 % in nominal terms, 30% factoring in inflation, though some of the
spending had been shifted into the 'off-budget' category. Having laid a
base, he then suggested a phase-in of other revenue sources. Alaska is
spending about $1billion/year more than it takes in. The balance is
debited from its savings account, the Constitutional Budget Reserve (CBR),
fast depleting. Goldsmith's new revenue sources are timed to match the
exhaustion of the CBR, projected for the fall of 2004. Goldsmith says
the fiscal situation, "...is primarily a political problem, not an economic
problem." His Generic Fiscal Plan, is intended to offer a technical
solution to the economic challenge which is politically palpable. Its
guiding principles are that it is: fair, sustainable, realistic, gradual,
complete, positive, flexible, efficient, stable and transparent.
Please download the
entire presentation of 'A Generic Fiscal Plan' here. During a
question and answer period, Goldsmith said he was optimistic based on effort
of the House of
Representatives this spring to pass a long-range fiscal plan, though the
Senate balked. When it is ultimately passed, he said, "...clearly the
tax regime will change." (Northern Gas Pipelines has long linked
resolution of Alaska's fiscal crisis to fiscal certainty for gas pipeline
investors; see latest
here. ***and*** Please see yesterday's report of other
economists commenting on Alaska gas pipeline strategy,
here.
* In other matters, Alliance general manager, Larry
Houle (NGP Photo, 5-23-02), said the organization was involved in upcoming
meetings with Premier Ralph Klein of Alberta and Alaska officials.
A lunch will occur on June 4 in Anchorage. The Alliance and Petroleum
Services Association of Canada will sign a memorandum of mutual cooperation.
Houle
thanked Alliance board members emeriti Chuck Becker and Dave Haugen
for their guidance in bringing the organizations together.
* Sally Ann Carey (NGP Photo, 5-23-02), has
long and faithfully provided Alliance members with a useful, humorous weekly
'safety minute'. Today, she urged members throughout the summer to
simply "think". With cell phone, traffic and other distractions
accidents are always a threat. President Bob Stinson (of Conam
Construction Company) presented Carey with a well-deserved plaque for her
service: "For your spirit, for your dedication, for your volunteerism, for
your contributions to health, safety and the Alaska environment." (NGP
Photos below: Other meeting participants included Mary Shields, Tim
Bradner, Mike Ryan and Ann Spohnholz.   
1-25: Special Report....Sheraton Anchorage Hotel: Review Tony Hopfinger's excel
 lent, Anchorage Daily News pieces: Phillips Alaska Inc. wants Congress to streamline federal permitting and protect the company from low prices before it will move ahead with a North Slope natural gas pipeline to the Lower 48. One of the conference's 'breaking news' items was Phillips' Vice President of Government Relations, Don Duncan (Photo-left), describing a price floor for Alaska North Slope gas prices, structured through tax credits, assuring producers a minimum price of $1.25 per thousand cubic feet at the wellhead. -dh & BP Exploration (Alaska) Inc. is sitting on 7 billion barrels of North Slope oil and gas and wants to recover as much as it can over the coming decades, president Steve Marshall said Friday. See Tim Bradner's related, Anchorage Daily News Story.
(While the author endeavors to produce accurate reports from meeting notes, he encourages all persons and offices named in this and other articles and readers-at-large to provide additions/corrections to ensure validity of the historical record. -dh ...Draft Revision: 1-28-02)
While detailed reports are below, we shall provide you with access to actual presentations. For links, look here after March 1. -dh
Pita Benz of Cook Inlet Region, Inc. graciously welcomed conferees and Alliance President, Bob
 Stinson -photo, left (Conam Construction Co.), set the stage by encouraging members not to focus on "managing the decline of our oil and gas industry". Rather he urged a redoubling of effort to produce more oil, jobs, markets, infrastructure and, "a positive attitude and federal and state governments that are efficient and working with industry...." Emphasizing the Alliance's 2002 legislative priority, he said, "Our State government must learn to live within our means like every Alaskan family must do." (Many related stories below.) He welcomed the many special guests attending from Washington, Juneau and elsewhere.
Anadarko Petroleum Corporation's Alaska Public Affairs Manager, Mark Hanley, introduced Mark L.
Kevin O. Meyers, President of Phillips Alaska, Inc., introduced Duncan, shown above. "Alaska is a
Ulmer then introduced Governor Tony Knowles (Photo) who said, "The best social program is a good job", and projected the state will initiate 16 more area-wide lease sales on the North Slope in the next five years, adding his pleasure at the prospect of signing a bill appropriating
ExxonMobil's Alaska Production Manager, Jack Williams, introduced Honourable Roger Simmons, P.C., Consul General of Canada (Photo-right). Before making the introduction, Williams complimented the largely U.S. Senator Frank Murkowski (Photo, with Consul General Simmons), also a candidate for governor, addressed Alliance members during the lunch hour, on the one hand lauding former Governor
He intends to host a 'Gas Summit' in Washington on February 4, involving the various parties: Administration, Legislature, Pipeline Companies, Producers. He said that the parties have accepted the invitations. Overall purpose of the meeting will be to, "determine the proper role for the Federal government." He said that on February 11, he will support introduction of legislation to ban the 'over the top', northern gas pipeline route. The bill would also guarantee open access for other North Slope gas producers and provide for Alaska control over in-state use of gas. Murkowski said the ANWR issue has "turned", that "ANWR will be opened someday, but prospects have never been better than now." He expressed the same concern of other speakers for the State's fiscal condition and was optimistic that cutting management layers, positive governmental restructuring and new technology could lead to lower costs. He is optimistic on the prospects of developing billions of barrels of North Slope viscous oils, of expanding the reserves base, on methane hydrate and GTL potential and tailoring a more efficient permitting and regulatory system. Mark G. Huber (Photo-right) of Doyon Universal Services, and Alliance board member, introduced Sherry Combs
Shifting gears and attention from Alaska natural resource and fiscal issues, the Alliance presented Dan
 Vanlandingham (Photo), EDS Vice President, Americas for the Global Energy Industries Group. Vanlandingham related a heightened world sensitivity to security issues in wake of 9-11, specifically as it applies to the oil and gas industry. Various aspects of security requiring attention and proper solutions include: people, operations, transportation, intellectual property. He briefed the audience on new technology that provides solutions, including smart cards, biometrics, IFR, along with the importance of 'scenario planning' and codifying the knowledge of 'process mentors'.
Longtime
 Alliance board member and president-elect Jack Laasch of Natchiq Inc. (Photo, left- Mike O'Connor, Peak Oilfield Services; Laasch; Pete Leathard, VECO; and James Udelhoven, Udelhoven Oilfield Services, introduced John Ellwood (Photo-right), Executive Vice President & COO, Foothills Pipe Lines Ltd. In spite of the fall from $10 to $2-range gas, Ellwood said, "the fundamental basis for an overland pipeline from Alaska through Canada to the lower 48 market remains strong." He said the recession accounts for current, low prices but that "Electrical power generation is still the main driver of the growth of natural gas demand in the United States." Even if projections by the Energy Information Administration in Washington were halved, he said, "demand would still grow by 10-15 Bcfd in the next ten years." In addition to growth demand, Ellwood said that new wells don't produce as long as formerly and that decline rates in gas production from wells connected in 2000 range between 20-30%. As to gas pipeline costs, he said improved technology would continue to reveal efficiencies for both construction and operational costs. A big cost improvement could come, he said, by finding "ways to remove friction from the system...particularly during ... construction.... That means looking at ways to compress the time it takes to build the pipeline," he said, and cited areas for review including labor issues, environmental assessment timetables, socio-economic issues, regulatory approvals and construction contracts. As to routing, Ellwood said Foothills, "has always
advocated two pipelines as the best approach to commercializing the arctic reserves of Alaska and Canada." But he cautioned that the Mackenzie Valley Pipeline project, "is not nearly as advanced as the Alaska Highway Project...." He said the recent announcement by the Delta producers allays a Canadian concern about stranding Delta gas. Ellwood disputed several of the assertions made earlier in the meeting by Phillips spokesman, Don Duncan, to the effect that a new Alaska Natural Gas Pipeline enabling act was required in the U.S. He then said, "Success is possible only with the support and active efforts of all stakeholders." Foothills is continuing to build cooperative relationships with Producers, new Pipeline Partners, Aboriginal Groups, Environmental Groups, Organized Labor and Governments, he said.1-10: Alaska Representative Jim Whitaker, a gas reserves tax advocate whose recent newspaper column we linked for your information, addressed Alliance members at the Anchorage Petroleum Club; subject: "State's Comprehensive Budget & Fiscal Policy". Members also heard from John Goll, Regional Director for Alaska of the U.S. Department of Interior Minerals Management Service. Following are reports from those presentations: Rep. Whitaker (Photo) is widely recognized for having sponsored a North Slope Gas reserves tax bill last
"I came to give you some realistic solutions for dealing with these crises," he said, including:
Northern Gas Pipelines asked Whitaker if reserves tax provisions shouldn't be included in lease documents prior to the parties signing them rather than promulgated after the fact. "In a perfect world, you would make it a part of the terms and conditions of the lease," he said. He added that his intent was to give incentives for production, not to tax. A producer representative questioned Whitaker on discriminating production tax benefits between existing producers and new producers. Whitaker indicated a desire to hear all sides of the issue.
John Goll, U.S. Minerals Management Service Regional Director for Alaska, had words of encouragement for Alliance members. “With the new Administration in Washington, D.C.,” he said, “the Department of the Interior has put more emphasis on energy development around the Nation.” He said Alaska will play a key role, and the Department has proposed a very ambitious program for the state. “You have heard about theincreased activity onshore in NPRA by our sister agency BLM, with their proposals for new sales. The federal offshore managed by MMS will provide many other opportunities for exploration,” he said. In October Secretary Norton released her proposed 5 Year Outer Continental Shelf Oil and Gas Leasing program. Goss said she proposes 3 sales in the Beaufort Sea, 2 sales in Cook Inlet, 2 sales in the Chukchi Sea and Hope Basin, and a special, non-traditional approach for Norton Sound. “We know the offshore is not the easiest or cheapest place to work”, Goll told Alliance members, “but the potential remains very high for oil and natural gas. He said the sale plans could assist in bringing energy to onshore areas of Alaska, especially western Alaska, if onshore sources are not readily found. Goll said MMS plans to keep the offshore option open, and try to make the processes easier and more predictable. “For example,” he said, “we are proposing to do one EIS which we can use for all 3 Beaufort Sales, and one for the 2 Cook Inlet sales.” Goll reminded his audience that the sale proposal came out in October, and the comment period closes on January 24. On December 31, 2001, he said MMS began the process for two sales planned in Cook Inlet. “We began the information gathering phase, and will be visiting with industry, communities, and others to sort through issues and areas of interest over the coming weeks,” he said. “Anchorage, the Kenai, the Valley, Kodiak, and all of south-central Alaska face energy issues in the future. We know companies are searching for gas onshore. We also want to offer the federal areas of Cook Inlet as another opportunity in that search. Initial comments are due by February 14, 2002,” he said. Goll said that in the early 90’s, the Gulf of Mexico was referred to as “the Dead Sea”. “People thought it was no longer an oil and gas province worthy of looking at,” he said, “but new ideas and strategies arose, leading to a rebirth there. The same can happen here, if people want it so. MMS’s goal will be to do our part in providing the opportunities, and ensuring that activity will be done safely for people and the environment.” 1-25: "Alaska's Role in a National Energy Policy". The Alliance's 2002 'Meet Alaska' Conference features another star cast, including: company executives, statewide elected officials and Canadian/U.S. Federal Cabinet officials (Call 907, 563-2226 for information). This Sheraton Anchorage Hotel conference coming on 1-25, will feature:
1-2: 1-2-02: Alaska Representative Jim Whitaker, a gas reserves tax advocate, whose recent newspaper column we linked for your information, will address Alliance members at the Anchorage Petroleum Club on 1-10; subject: "State's Comprehensive Budget & Fiscal Policy". |
Founding Publisher's 2002 Editorials and 2001; magazine & newspaper articles; Seattle Chamber of Commerce Speech, 5-8-02, CBC Interview
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