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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;
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
| Northern Gas Pipelines: Extended News/Photos, United States Association for Energy Economics (USAEE)*-Alaska Chapter, Economists, Economic & Revenue References...2001 Archives (*Formerly, International Association for Energy Economics)
Go to left column 'Up' button for 2002 News
1-8: See yesterday's report below (1-7) of significant developments in Canada. * Anchorage Chamber-
1-7: JUNEAU -- Bill Hudson says the permanent fund dividend is in danger. But the longtime Republican representative from Juneau says the danger is not the Fiscal Policy Caucus, the bipartisan group of legislators he co-chairs. Rather, the threat comes from the possibility of inaction on a long-range fiscal plan in the 2002 legislative session, he said. * Today, Alaska Senate President Rick Halford (Photo-right, 12-14) and House Speaker Brian Porter (Photo-left, 12-14) will address the Anchorage 1-1: Alaska's fiscal crisis: Anchorage Daily News-Time shifted dramatically against Alaska's leaders this fall when updated state revenue estimates showed the drain on the Constitutional Budget Reserve will be more than $900 million in the coming year. That means the CBR likely will evaporate in 2004, a year sooner than previously predicted. It means the day of reckoning is sooner, economic development is deterred -- because investment in a state that just won't put its fiscal house in order is less and less likely all the time -- and honest political leadership is more crucial than ever. Election year or not, the problem can no longer be put off. 2001 Activity 12-21: Anchorage Daily News, by Tony Hopfinger- An energy consulting firm believes that developing the North Slope's natural gas fields -- the largest untapped gas reservoirs in North America -- is not feasible for at least 13 years. North America is burping with smaller gas supplies that should keep the lights on throughout this decade, said Ed Kelly, North American gas researcher for the prestigious Cambridge Energy Research Associates. ... The state was among several dozen clients that signed on for the Cambridge Energy study of world LNG markets this year, paying $27,500, said Larry Persily, state deputy commissioner of revenue. The study concludes a multibillion-dollar Alaska LNG project doesn't make financial sense. 12-20: Petroleum News Alaska-Cambridge Energy Research Associates now believes that the window for Arctic gas has moved out some five years - to about 2015. * Anchorage-Members of the "Task Force on Jobs and the Economy since September 11", created by Gov. Tony Knowles as a way to examine impacts on all facets of the state's economy, presented their findings to the governor today. 12-19: CBC, Yellowknife, N.W.T. - The Northwest Territories is a better place for mineral investment than it was a year ago. That's the conclusion of the Fraser Institute, a conservative think-tank based in Vancouver. The territory ranked fourth in Canada, and 11th in the world for its investment attractiveness according to the institute's annual ranking. ..."The policy assessment of the Northwest Territories improved," said Laura Jones, the institute's Director of Environment and Regulatory Studies. "So in a number of specific factors like environmental regulations, regulatory duplication, and taxation, the score on policy improved." ... The Northwest Territories had a higher ranking than either Nunavut or the Yukon.... 12-18: "NEW ARCTIC GAS STUDY--University of Houston Professors Ronald Oligney and James Longbottom announced completion of their study, "The Imperatives of Arctic Natural Gas Development" at the Canadian Institute's recent Arctic Gas Symposium. 12-15/16 (Weekend):
FRIDAY- A FLURRY OF BUDGET POSTURING IN ALASKA WHICH 12-13-01: Budget and Tax Concerns up North ANCHORAGE--The economic recession and associated, lower energy prices are taking a financial toll on Citizens in both northern Canada and Alaska, as elsewhere. Yesterday, the Alaska Senate Finance “… our twin economic anchors in Alaska of oil and government appear unsustainable in the long-term." Bill Stamps, 12-13-01Stamps (Photo, 12-13-01) complimented Governor Tony Knowles' policy that, ”Alaska is open for business”, saying it Then, he cautioned that, “… our twin economic anchors in Alaska of oil and government appear unsustainable in the long-term. And in the near-term, fallout from September 11th – and the national recession – has cast a cloud over our entire economy.” Referring to a subject we have covered here in some detail, he said, “Our state budget is now over $900 MM in the red. We are facing another budget short fall of almost a billion dollars – similar to where we were a couple of years ago before oil prices shot up and bailed us out again. (Governor Steve Cowper applied this fiscal reality to gas line planning in our 12-12-01 report.) This short fall means we will have to draw down our Constitutional Budget Reserve to less than $2 billion by the end of the fiscal year and with a projected draw of $1.3 billion in 2003, Alaska will empty our budget reserve account in less than three years. In other words Alaska will no longer have the bailout stash that has been used for years.” Stamps was properly concerned about what elected officials with backs pressed against a wall will do. “What would new taxes such as a modified economic limit factor (ELF) program do to future development of fields such as Liberty, NPR-A, Meltwater, Palm, West Sak, Schrader Bluff, Borealis and others?” he asked. “Probably cancel some and restrict the development of others. A modification to ELF would devastate the Cook Inlet oil industry.” Then he suggested that, “…a moratorium on taxes is in order while the legislature focuses on the big picture and can decide on a clear path to a solid fiscal plan.” He and other support industry leaders are planning to communicate this concern to the Legislature, set to reconvene in Juneau this coming January. Please see Stamps' full presentation here. "The numbers are staggering." Senator Dave Donley, 12-13-01. Donley (Photo, 12-13-01) spoke partly to update the Alliance membership on budget challenges, partly to answer some of the concerns raised at an October Alliance meeting by North Slope Borough Mayor Comment: "Such is the nature of political struggle as governments become highly dependent on resource revenue or government grants, when resource prices fall and/or when rates of production and/or national revenues diminish. In such situations, political leaders should beware of becoming too tax-dependent on a few resource industries or other governments. Industries should, in turn, be cautious about--and must discount-- investment into an economy that could become too dependent on them. With the stroke of a tax pen, project economics can change overnight, and even retroactively, after investment dollars have been locked and frozen into a permafrost trench." -dh 12-12-01: HOUSTON--Below we report on a speech delivered last week (12-6-01) here to the Interactive Energy Conference by Alaska's former governor, Steve Cowper. As governor, Cowper managed Alaska's recovery following the economic recession of the mid-80s, from 1986 to 1990, After reviewing North Slope oil & gas history, Cowper focused on Alaska's fiscal regime. "For twenty years," he said, "almost all the State of Alaska's revenues have come from the oil patch. There is currently a sequestered surplus which will last another two or three years, but when that's gone, unless there is another fat hog to kill, the State will have to start shutting down the public sector, even in the unlikely event of a reimposition of the State's income tax." He said that basic government services like schools and public safety are jeopardized, "...unless another fat revenue stream comes along." (Reference: 'economics' reports, here.) After briefing participants on Alaska "boom and bust" cycles of the 70s and 80', he turned to gas pipeline options, describing the four major concepts: the northern route, the southern route, an LNG export project, and movement of gas energy in the form of GTL through the Trans-Alaska Pipeline System (i.e. at last count, there were no less than four Alaska groups studying or promoting LNG options and one political advocate group). "Now there are a lot of engineers in this room," he said, "and a lot of IT specialists. All of you are accustomed to dealing with math and with logic, which is pretty much the same thing as math. You also probably believe in a free market system. If somebody should ask you to pick the best of these four options - with "none of the above" as an additional possibility - you would turn yourselves right away to making a cost-benefit analysis of each option, and judging from the rumored content of state and industry reports nobody else is allowed to read, here is probably what you would find." He then critiqued the alternatives:
Cowper said that though most observers a year ago expected the free market to determine the outcome, "Today, you know it ain't so." He then described the political players. "The state of Alaska", he said, "wants ... high-wage construction jobs. The pipeline construction worker is to Alaska what the cowboy is to Texas. Even though a less expensive line would deliver more revenue over the years because of a lower tariff, that doesn't hold a candle to the lure of another pipeline boom. Anybody who expresses a different view is advised not to enter a bar in Fairbanks after 8:00 PM." "The Canadian government", he said, "is the one that will decide where the pipeline right-of-way will go in its own country." Then he posed what he characterized as a logic question: "... if you were in charge of Canada, would you approve of a line that bypassed all the Canadian gas and brought huge quantities of Alaska gas through your country into the US, displacing existing Canadian exports, or would you be more likely to back a line that picked up your stranded gas, created wealth in your country, and sent your resources as well as Alaska's to the US?" He then described the importance of the North Slope Borough, its related Native regional corporation and Canadian First Nations. He suggested that the final routing decisions should be made at the top levels of each federal government. "The place to start is at the top. The US and Canadian governments have to decide that this project is going to get done, and then they have to preempt other jurisdictions and make the rules. The first rule will have to be that the most cost-effective route is the one chosen. In conclusion, Cowper itemized a final political and business solution, "based on what I read, the 'over-the-top' route is the clear winner from a cost standpoint. Canada likes it because it picks up their reserves. A deal has to be cut as to what proportion of US and Canadian gas goes into the US market on what time schedule. Probably some Canadian government financial guarantees will be in order. The Canadian First Nations land claims will have to be settled. Labor deals will have to be cut, including the participation of Alaskan workers on the Canadian portion of the line. They wouldn't displace Canadians; there's not enough of a Canadian workforce to handle a project of this size." He said that if the respective national governments did not take control of the process, the more likely outcome would be eventual development of an Alaska North Slope GTL project. (We have provided for your further review and convenience the full text of Governor Cowper's speech. Here is information for editors who wish to reprint this or other original work herein.) 12-10-01: ANCHORAGE--Yesterday, Alaska State labor economist, Neal Fried (Photo) told 12-07-01: The Department of Revenue released its Fall 2001 Revenue Forecast at 9 a.m. today. (See report below.)
REPORT: ALASKA STATE REVENUE PROJECTIONS, 2001 LOWER OIL PRICES WIDEN FISCAL GAP Return to average prices produces a billion-dollar deficit in Fiscal Year 2003. The Department of Revenue projects North Slope oil prices will hover close to their historical average of around $18 a barrel after two years of higher-than-average prices. The price shift will add to the state's fiscal gap, with Based on the department's oil price and production forecasts, and assuming a spending level needed to maintain existing services, the Constitutional Budget Reserve Fund will hit empty in July 2004 - almost a full year sooner than forecast by the department last spring. The Budget Reserve Fund is at $2.8 billion this week, with an additional $100 million draw scheduled for next week. "Until Alaskans can agree on a fiscal plan, which must include new revenues, we will continue to drain the Budget Reserve Fund," Condon said. "Higher, or lower, oil prices could move the end date into 2005 or 2003, but, realistically, we know we're getting dangerously close to the end of the line." The department forecasts Alaska North Slope oil prices to average $20.55 for Fiscal Year 2002, which ends June 30. That's a drop of almost $2 a barrel from the Spring 2001 revenue forecast and almost $4 from the Fall 2000 forecast. "Although prices have been around the $17 range the past week, the year-to-date average is $22, and we believe the higher prices of the first six months we help keep the year-end average respectable," Condon said. Prices are expected to continue their downward trend, however, averaging $18.81 a barrel in Fiscal 2003 and then picking up a bit to $19.72 a barrel in Fiscal 2004 if the world economy recovers. Although the price forecast is down from previous estimates, North Slope production is expected to increase after falling to an average of 991,000 barrels a day in Fiscal 2001 - the first time the flow has dropped below 1 million barrels a day since full production started 24 years ago. The department forecasts Fiscal 2002 production to average 1.012 million barrels a day, building to 1.070 million barrels in Fiscal 2003 and 1.111 million barrels a day in Fiscal 2004. North Slope production is forecast to remain above 1.1 million barrels a day through Fiscal 2008. "Alpine and Northstar are primarily responsible for the production growth," Condon said. "The producers are to be commended for bringing the new fields online. We certainly hope for more new production to help reverse the overall decline in older fields on the slope." State officials pointed out in the news conference that while overall oil production is expected to continue a moderate increase, overall revenue continues to decline since the primary revenue generator is the declining Prudhoe Bay field. Prudhoe Bay produces more government revenue per barrel than the newer, more costly fields. 11-27-01: Northern Gas Pipelines-“Alaska Energy Economists Discuss Cook Inlet Gas Supply and Relationship to North Slope Gas Decision.” Yesterday the Anchorage chapter of the International Association for Energy Economists gathered to hear a joint presentation by three State Division of Oil and Gas officials representing the Department of Natural Resources. Bill VanDyke, Petroleum Manager first spoke on overall Cook Inlet activity (Reference: AEDC study; and, earlier presentation). (Our Canadian and Lower 48 readers should know that discovery of the Swanson River Field on the Kenai Peninsula (bordered by Cook Inlet) in 1957, led the Territory to successfully advocate statehood with Congress and the Eisenhower Administration. At that time, there were no gas industry, transmission lines or distribution systems. At statehood, in 1959, companies were organizing a successful LNG Japanese export project using the abundance of gas. At one time, Southcentral Alaska, including the largest city of Anchorage, had a 50-year supply of gas with prices below a quarter an MCF in the early days. Times have changed. The biggest city became a modern metropolitan center of business, transportation, education and industry and in 2001 gas reserves are in jeopardy.)
Tim Ryherd, Geologist, summarized a rather active “Cook Inlet Exploration Summary” (Photo, 11-27-01). He then
Will Nebesky, an economist and commercial analyst, was also speaking before the last meeting over which he was presiding as president. He briefed the audience on gas consumption by category (industrial, utility, power generation, and field operations) and the royalty value to the state and how it is calculated. Royalty value is determined by the higher-of clauses in the lease and by settlement agreements that attempt to capture fair market value. Historic commercial arrangements for many Cook Inlet gas dispositions index gas prices to oil markets. There appears to be a new effort to build in a Henry Hub spot market component in determining value. He displayed forward-looking charts showing a dramatic supply drop, including scenarios involving the addition of 1Tcf of new supply, no new supply, and curtailments of industrial use. He concluded by demonstrating the relatively small magnitude of Cook Inlet gas supply compared with Alaska North Slope gas.
(Obtain this updated PowerPoint presentation here.)
10-26-01: When questioned about gas pipeline costs 10-25-01: IAEE Meeting photos below. See original news report here. University of Alaska-Anchorage Economics Professor, Scott Goldsmith, with the Institute of Social Dr. Brad Tuck, after the meeting.
David MacDowell of BP (Left), External Affairs Manager of the Alaska Gas Producers Pipeline Team, assisted Bill McMahon (Right) with the presentation. Bill is Commercial Manager for the Team.
9-28-01: ANCHORAGE, by Northern Gas Pipelines-Addressing the International Association for Energy Economists yesterday, state Department of Revenue Tax Division Economist, Dr. Charles
See original news report here.
8-25/26-01 (Weekend): ANCHORAGE DAILY NEWS--Columnist/economist David Reaume says, "There really is such a thing as a window of opportunity. If the state of Alaska chooses to hold out for an Alaska pipeline alternative, Alaskans may be left with nothing. The Department of Natural Resources is letting a contract to a private consulting firm to study the alternatives once again. If the answers come out the way they have in the past, Alaska's leaders will have no responsible option other than supporting the Mackenzie Delta route. That is why these leaders need to keep their powder dry." 4-19-01:
Pacific Rim Leadership Development President, Ken Thompson (also, former Arco Alaska, Inc.
President),
(Photo-right: Alliance leaders, Chuck Becker and Mary Shields attend IAEE Presentation, 4/19) |
Upcoming Conferences: IOGCC, 5/11 -13; Newspaper Front Pages--WORLDWIDE Our view of South Central Alaska's imminent Energy Crisis Founding Publisher's 2002 Editorials and 2001; magazine & newspaper articles; Seattle Chamber of Commerce Speech, 5-8-02, CBC Interview
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