Friday, June 12, 2009

Hickel's not happy with Exxon/TransCanada deal.

Former Gov. Walter Hickel harshly criticized the deal between Exxon and TransCanada.
His disaffection with Sarah Palin began over her decision to go for a big pipe through Canada versus an all-Alaska natural gas pipeline to Valdez.

And, he is correct.

Neither AGIA nor Denali have all the producers on board. AGIA has Exxon, and Denali has Conoco and BP. Takes 3 to make any large project work.

Then, there are those little details that everyone forgets. Such as, Alaska is short about 80 tcf of NG to keep either AGIA or Denali fed with gas over the 30 years of the life of the financing. Too, Exxon stated earlier this year, that there is too little gas available on a daily basis to make a big pipeline work. 4.5 bcf is available, but 2.5 bcf must be reinjected to pressurize the oil fields daily. This leaves 2 bcf for market, and that is with Pt. Thompson included in the mix.

All of the above was argued during the gubernatorial campaign. Nothing has changed.

The price of oil is 18 times that of NG right now. Guess what use Alaska's NG will have? Keeping the North Slope fields pressurized and separating oil from Alberta tar sands.

While big news, the Exxon TransCanada deal is really so much fluff.

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