NOV 7 MEET AND GREET FOR BILL WALKER AND CRAIG FLEENER

If you cannot read the details in the above graphic, the link below will take you to the website with the announcement.

http://campaign.r20.constantcontact.com/render?llr=qiugaddab&v=001dXbC6UqaAI5fRUYGv57teBrwJ7cG9Z1nZrcgSMSgNh_gBde_5g0YO56KOq2nr6WjMe8yfwBH1o4VnGRjFryVwvF6T6P1xFeq4otpRkZLd218yGCEqC6niSjqxLc_g88HyS8vReTEWZ5zQ78WgMOudxEkq5dhDBaIGHD3rI6CwfZO1ypSqm9seH3D0sIgfY1oyAfXGcBZZaJSEW1ZiUEGkin6KOs1WnhzRLfzoKMN0hOFstCN5U0xXyiwrHckbZe9VCMSGr8bZLU4Y-mVbn349XVYMQYYnPJdGCPPjdIlBLc%3D

Campaign website:  http://www.billwalkerforgovernor.com/

HB4 is a bad idea and a slap in the voters' faces

HB4 creating the Alaska Gas Development Corporation was passed by the Alaska House on 2 April, 2013 by a vote of 30-9. This bill is the culmination of over 10 years of effort on the part of the Legislature and the Governor to end the Alaska Natural Gas Development Authority created by 138,000 votes for Proposition 3 in 2002. HB4 is now before the Alaska Senate, where it will probably pass, given the list of sponsors in the Senate: Senators Dyson, Huggins, Giessel, McGuire, and Micciche. There are only 20 members of the Alaska Senate. Senator Charlie Huggins is the Senate President. Therefore, the likelihood of this legislation failing to pass is nil.

Alaska’s history of attempting to get a natural gas pipeline built to move natural gas from the North Slope to market has been convoluted. HB4 further complicates this confusing and contradictory history.

Prop 3 passed in 2002 mandated the State to create a natural gas development authority (AS 41.41) to build the all-Alaska natural gas pipeline from Prudhoe to Valdez, with a 250 mmcf spur to south central. The capacity of the all-Alaska natural gas pipeline (AANGPV) to be built was approximately 2.5-3.0 bcf/da with most of the gas converted to LNG and then shipped to market in the U.S. or to foreign markets. Proposition 3 created the Alaska Natural Gas Development Authority (ANGDA), which was to be have been the vehicle that would oversea the natural gas development potential for Alaska. From the very start, ANGDA was vehemently opposed, disrespected, and diminished by Governor Frank Murkowski, Governor Sarah Palin, Governor Sean Parnell and the Legislature from 2002 forward. With their opposition to ANGDA, the aforementioned belied any intention of respecting the peoples’ will where building a natural gas pipeline was concerned. This disrespect has been amplified in the creation of the Alaska Gas Development Corporation (AGDC) and the Alaska Stand Alone Pipeline (ASAP).

Governor Frank Murkowski rejected the will of the voters with his churlish opposition to ANGDA and the all-Alaska natural gas pipeline (AANGPV). Murkowski funded ANGDA with an initial appropriation of $50,000 and the Legislature gave more money later in 2003. ANGDA’s yearly budgets then and since barely covered the cost of the few positions created. Compare this situation with the $400 million that will be shoveled into the AGDC’s Alaska Stand Alone Pipeline (ASAP) by the Legislature under HB4 and the $214 million previously appropriated for the various iterations of the ASAP line. Today, ANGDA’s website lists four on the ANGDA Board and one employee as Executive Director. Harold Heinze, a former CEO of ARCO, was the previous Chief Executive Director until he stepped down on December 8, 2011.

ANGDA accomplished much during its colored history. ANGDA explored moving gas south by truck to Fairbanks, permitting of the 250 mmcf spur line from Glennallen to Palmer’s Enstar natural gas hub, and building a natural gas pipeline from the Kenai Penninsula north to communities along the Parks Highway, which would have provided an incentive for further exploration and development of the Cook Inlet oil and gas fields. Given the dearth of resources and the failure by the Legislature and the Governors, and their opposition to ANGDA, to provide for bonding capacity, as has been done for the AGDC through Alaska Housing Finance Corporation and the Alaska Rail Road, ANGDA’s accomplishments were not insignificant. Under Harold Heinze and Scott Heyworth, ANGDA moved to meet its statutory mandate as was allowed by hostile administrations and an indifferent and, since the 2009, an increasingly hostile Legislature.

During his term, Governor Frank Murkowski had promised a natural gas pipeline and worked diligently on a 4.0 bcf/da pipeline proposal to make his promise reality. His efforts allegedly culminated in a contract with Exxon, Conoco and British Petroleum Alaska to build his pipe dream. The Palin campaign was able to successfully promote the all-Alaska natural gas pipeline in opposition to Murkowski’s efforts. It was revealed that what Murkowski called a contract was nothing more than an intent on the part of the oil companies to study the viability of building a 4.0 bcf natural gas pipeline to Alberta.

The size of any pipeline has also been an interesting side issue, and one often overlooked in any debate. The natural gas pipeline strategy effected under Murkowski, Palin and Parnell has been for a 4.0 bcf/day natural gas pipeline from the North Slope to Alberta. The theory being that there must be sufficient volume to replace declining revenues produced by the North Slope’s declining oil production. The all-Alaska natural gas pipeline proposed in 2002 was to be a 2.5 bcf with Bill Walker expanding that to 3.0 bcf under his campaign proposal. The AANGPV would terminate at an LNG train to convert the methane to Liquid Natural Gas (LNG).

Bill Walker’s AANGPV proposal would have provided for use of the gas liquids in-state to grow Alaska’s private sector, whereas Palin/Parnell’s AGIA, both the Canadian route and the LNG proposal under consideration to Valdez, and Murkowski’s proposal intended that the gas and gas liquids be shipped out of state for consumption and use elsewhere with little benefit to Alaskans beyond the in-state pipeline and LNG train construction and a direct infusion of cash at the State level.

The Alaska Oil Gas Conservation Commission (AOGCC) has set a limit on the amount of natural gas that is available for sale in order to maintain sufficient pressure on North Slope legacy fields to allow production of remaining oil reserves. AOGCC has set a limit of 2.5-3.0 bcf available per day to deliver to a pipeline. Over 8 bcf per day is now reinjected back into the oil fields on the North Slope in order to maintain pressurization of the fields to make oil production feasible. AOGCC has been pretty consistent in its requirement that at least 5 bcf of the 8 bcf of gas produced per day be reinjected. The priority is in maintaining the State’s oil revenues.

During her 2006 campaign, Sarah Palin supported the mandate imposed by Proposition 3 and the construction of the AANGPV. Upon taking her oath of office, then Governor Sarah Palin turned her back on her support for that mandate and project, and moved forward with her Alaska Gas Inducement Act, which, to date, has produced nothing. AGIA was almost a mirror of Murkowski’s proposed pipeline plan. Instead of relying upon the Producers (Exxon, BP and Conoco), AGIA granted an exclusive to the winner of the competition promoted by the Palin Administration. Unfortunately, there was only one competitor, and that was TransCanada. Her successor, Governor Sean Parnell has not been able to move the proverbial natural gas pipeline football forward one inch towards a commitment for construction, a timeline to do anything, or even claim a successful open season.

During the 2010 campaign for governor in the Republican Primary, Bill Walker championed the AANGPV in his bid for the Republican nomination for Governor. Walker added a new dimension to the pipeline conversation that has been ignored since Parnell’s victory in the Republican Primary. That new dimension was the idea of value added resource development in the use of some of the gas to provide cheaper energy for the agriculture, timber, and mineral industries. Walker’s proposal would have seen take offs to communities down the Richardson Highway and at Glennallen. There was discussion regarding another spur across the Denali Highway to Cantwell. Fairbanks would have benefitted from the pipeline as the pipeline would have gone through with the gas liquids stripped at Fairbanks. The propane and butane would have been used as alternative fuels, with the ethane, hexane and other components being used to provide the building blocks for a plastics and petrochemical industry, giving a benefit to Alaska’s economy well beyond just the construction of the AANGPV. Walker’s proposal was the only proposal for a natural gas pipeline that went beyond just exporting Alaska’s gas to a foreign or domestic market.

The ASAP proposal was previously known as Harry Noah’s pipeline under Sarah Palin/Sean Parnell. The economics were never viable, but $14 million in State funding was appropriated to Noah’s pipeline study group for what was then known as the Bullet Line. Rep. Mike Hawker and Rep. Mike Chennault brokered deals to create the Alaska Gas Development Corporation by creating a frankenmonster of an entity to end the public’s mandate represented by ANGDA, but doing what the Legislature never did for ANGDA: providing for the ability to bond to finance any gasline projects using the resources of the Alaska Rail Road and the Alaska Housing Finance Corporation.

The Republican Primary in 2010 saw three competing natural gas pipeline projects: former Rep. Ralph Samuels promoted the ‘Bullet Line’ (ASAP), Governor Sean Parnell promoted AGIA, and former Mayor of Valdez Bill Walker promoted the AANGPV.

For some reason, it was fine by the Republican legislative majority and voters to support the Bullet Line, even though it was to be 100% state financed, and limited to a maximum volume of 500 mmcf/da under AGIA, but having the State of Alaska buy into the AANGPV for a 20% interest in order to control the timeline for construction was ‘socialist’ and a subject of great controversy. The estimated cost of the Bullet Line was $4B-$7B at that time, and the estimated cost of the AANGPV was $20B-$24B. Since, the ‘Bullet Line’ cost estimates have grown to almost $8B, but the AGIA version of the AANGPV costs have increased from the 2010 AANGPV estimates to $45B-$65B according to the October 1, 2012 letter to Governor Sean Parnell from Exxon, BP and Conoco.

Note the disparity in cost increases between the two pipelines. Does it make sense that the estimated costs of the AANGPV should increase by three times over the cost factors of the ‘Bullet Line’/ASAP pipeline? Is this a case of TransCanada/Exxon, BP and Conoco inflating the AANGPV to reinforce their reluctance towards moving North Slope natural gas to market?

The upswing in shale gas production has eliminated the domestic U.S. natural gas. A projected 200 trillion cubic feet of natural gas reserves in continental U.S. shale deposits made the idea of shipping Alaska natural gas to a U.S. market moot. Now, Alaska natural gas will have to compete with domestically produced U.S. shale gas on the world market, given the export permits applied for to move shale gas as LNG to Asian markets.

One of the greatest errors on the part of the Parnell Administration was ignoring the needs of Japan after the 2011 earth quake. A delegation came to Alaska seeking an audience with our governor. They did not meet with him. Another delegation came last year in June and met with DNR Commissioner Dan Sullivan. After leaving Alaska, the delegation comprising four Japanese companies, including Mitsubishi, travelled to British Columbia and Louisiana where they invested almost $4 billion between Cheniere Energy’s Sabine Pass LNG export expansion project and in Shell’s LNG export facility at Kitimat, B.C.

Alaska has a long term (43 years) relationship with Japan with respect to LNG exports. Conoco’s LNG train at Nikiski has been producing LNG for export to Japan since before the completion of the TAPS.

It certainly appears that AGIA has cost Alaska in lost business opportunities.

The ASAP’s primary purpose is no longer just the idea of supplementing Cook Inlet/Kenai gas production until storage and new exploration and development activities eliminate the specter of natural gas shortages that saw the closure of the Agrium ammonium nitrate fertilizer plant in Nikiski several years ago with the loss of 65 jobs. The ASAP will provide natural gas for Conoco’s LNG train at Nikiski for export to Asia. Given that the ASAP will be constructed at State of Alaska expense and its operation subsidized by the State, that is a very good deal for Conoco. At lease some of Alaska’s natural gas will make it Asia’s LNG market.

Cook Inlet has approximately 19 trillion cubic feet of estimated reserves remaining to be discovered. Exploration and development has picked up over the last two years, with more drilling planned this year. Unfortunately, there needs to be an upgrade in transportation infrastructure and storage to get the natural gas from the producing field to sufficient storage to carry south central’s demand through increasingly colder winters. It is not a declining production that is the issue, it is the lack of a suitable intra-field pipeline system to get the gas to the storage facility. As a result, Alaska may see the first importation of natural gas from Russia later this Spring.

With the 2014 gubernatorial elections looming, Governor Sean Parnell is in much the same situation as former Governor Frank Murkowski was at the time of his reelection bid against Sarah Palin. Under Parnell, the AGIA 4.0 bcf pipeline option to Canada is dead. The only viable option is the AGIA LNG option similar in size and scope to the AANGPV, excepting for no spur to Palmer and no in-state use of the gas liquids. Given the conflicts of interest on the part of Exxon, BP, Conoco and TransCanada, LNG from Alaska is unwelcome in the Asian market, because of competing developments on the part of the aforementioned.

Given that his administration cannot state any firm date for the construction of a pipeline, could it be that Governor Sean Parnell is exploring the possibility of running against Senator Mark Begich with the intent of bailing from the Governor’s office before the house of cards that is AGIA falls in on itself?

Such could be inferred from the remarks made by Lt. Gov. Mead Treadwell today. Treadwell commented on the recent upheavals in the Alaska Republican Party and its ability to promote and support the campaign against Democrate Senator Mark Begich. Treadwell stated that it may not be him running against Begich, but possibly Governor Sean Parnell. Treadwell had previously announced his intent to explore a run against Senator Mark Begich on November 30, 2012. If so, Treadwell will certainly run for governor in Parnell’s stead.

Bill Walker may have another shot at the Governor’s mansion if Parnell runs for the U.S. Senate. Under Parnell, Treadwell has not been terribly prominent in the public eye.

It should be noted that Governor Sean Parnell has not opposed theAGDC/ASAP proposal of Rep. Mike Hawker and Rep. Mike Chennault as demonstrated by HB4, nor did he oppose the previous iteration of that project proposed by Harry Noah under then Governor Sarah Palin. This lack of opposition leaves him in a position of being able to claim some degree of success with respect to moving Alaska’s North Slope natural gas to market. Ignoring of course, the fact that the ASAP project is limited to 500mmcf under AGIA, meaning the cost of transport to market will have to be subsidized by the State for the life of the pipeline. The cost of constructing the pipeline would also be borne by the State of Alaska.

Bill Walker’s AANGPV was the best option to date, as his plan provided for instate use of the gas liquids and natural gas to provide for cheap energy for agriculture and industry, alternative fuels for the Bush, and a petrochemical industry for Alaska. TransCanada and Exxon will send the gas and the gas liquids to Asia, if they bother to build a pipeline at all. Further, the AANGPV provided for a 250 mmcf/da spur into the Enstar Hub at Palmer to help mitigate the anticipated storage shortfalls from Cook Inlet natural gas production. A spur from Paxon west to Cantwell was also anticipated providing for a spur feeding to Nenana and connecting to any ANGDA pipeline from Nikiski north to Cantwell.

Competing with any potential Alaska LNG exports, Exxon has several large scale natural gas development LNG projects in the Pacific (Australia, Indonesia, New Guinea), and also needs a market for its portion of Qatar gas with the loss of the U.S. domestic natural gas market to domestically produced shale gas.

TransCanada is part of the Foothills Pipeline Company, which is involved in the Kitimat LNG port project. TransCanada was recently awarded a contract by Shell for a 2.4bcf pipeline to Kitimat, B.C.

Conoco has its portion of Qatar natural gas to move to market, now in Asia, because of the loss of the domestic U.S. market to shale gas. Conoco also has two Australia LNG projects that will compete with Alaska LNG for the Asian market.

Given the conflicts of interest on the part of Exxon Mobil, Conoco Phillips and TransCanada, is it any wonder why there has been no forward movement on AGIA?

Given the conflicts of interest on the part of Exxon and TransCanada, Governor Parnell has to be either totally brain dead, or simply ignoring reality, given his insistence on pursuing AGIA in the face of competing projects on the part of the TransCanada, Exxon, Conoco and BP. There is no provision under AGIA to declare breach of contract based upon a conflict of interest.

Given the increasing availability of natural gas in the world market, it may be better for the State to pay $500 million to $1.5 billion in penalties get out of AGIA. The lost opportunities will cost the state several orders of magnitude of any penalty under AGIA.

What are the differences between the ASAP natural gas pipeline and the all-Alaska natural gas pipeline option to Valdez?

Cost of construction is borne by the State: ASAP–100%; AANGPV–20% State ownership interest

Capacity: ASAP–500 mmcf/da; AANGPV–2.5-3.0 bcf/da

Benefits: ASAP will increase south central consumer gas costs by up to 13%; AANGVP will reduce or maintain present consumer costs, provide for growth in the private sector, because of in-state use of gas liquids, benefit beyond Alaska for growth in Asian customer’s economies

Cost of construction: ASAP–$8B; AANGPV–up to $45B-$65B (oil companies’ estimate) with LNG train and harbor improvements

Route: ASAP–North Slope to Nikiski across several salmon streams, Denali National Park and Denali State Park, but will not go through Fairbanks with no spur for consumers down the Richardson Highway south to Valdez; AANGVP–TAPS corridor from Prudhoe to Valdez covering all communities along the route through Fairbanks, with a 250 mmcf/da spur from Glennallen to Palmer and passing through Fairbanks down the Richardson Highway with a potential spur across the Denali Highway, LNG route--Valdez to Asia

Permitting status: ASAP–no permits issued; AANGVP–existing permits from Yukon Pacific Corp.

Estimated completion: ASAP–2019; AANGVP–two-three years from funding

Cost of gas to delivery per million cubic feet: ASAP–$9-$11.25/mmcf for Anchorage consumers (p13 of ASAP Project Plan); AANGVP–<$10/mmcf from the North Slope to Japan, including TAPS, LNG conversion costs, and LNG tanker costs (p15 of Wood-Mac study)

Gas liquids: ASAP–stripped at North Slope and reinjected; AANGVP–stripped at Fairbanks for use in Alaska

Testimony on HB4 was heard before the Senate Finance Committee today. HB4 is expected to pass out of the committee.

For more information:

ASAP Project Plan, Dec. 20, 2011–Joint In-state Gas Caucus

http://housemajority.org/neuman/pdfs/27/Gas_Caucus_New_Scenario_20121220.pdf

Wood MacKenzie Alaskan LNG Exports Competitiveness Study

http://www.arcticgas.gov/sites/default/files/documents/11-07-alaska-lng-competitiveness-study.pdf

Exxon Mobil LNG:

http://www.exxonmobil.com/Corporate/energy_production_lng.aspx

Conoco Phillips LNG:

http://lnglicensing.conocophillips.com/EN/lngprojects/Pages/index.aspx

British Petroleum LNG:

http://www.bp.com/sectiongenericarticle.do?categoryId=9015376&contentId=7028020

http://www.bp.com/sectiongenericarticle.do?categoryId=9015513&contentId=7043288

TransCanada:

http://www.transcanada.com/coastal-gaslink.html

Other related articles:

http://www.examiner.com/article/agia-transcanada-s-conflict-of-interest

http://www.examiner.com/article/agia-exxon-s-conflict-of-interest

http://www.examiner.com/article/senator-lisa-murkowski-is-selling-lng-to-japan-when-parnell-will-not

http://www.examiner.com/article/support-for-the-all-alaska-natural-gas-pipeline-appears-local-campaigns

http://www.examiner.com/article/the-legislature-and-the-governor-neither-of-whom-can-make-a-decision

 

http://www.examiner.com/article/denali-is-dead-now-what

Exxon's conflict of interest--why there will be no Alaska natural gas pipeline.

Governor Sean Parnell and oil company bosses

Exxon and Alaska’s oil and gas

Exxon is Alaska’s bad boy of oil development. Who does not remember the Exxon Valdez spill in Prince William Sound and the aftermath? As a result, Exxon has been cast as the "heavy" in any oil development conspiracies abounding regarding Alaska’s North Slope oil taxes controversy and oil development in general in Alaska. Exxon is the largest oil company in the world and the wealthiest. Exxon is the great white shark of oil development, the rest are remoras or pilot fish who go where the big fish goes and feed off the leavings. In the Book of Five Rings (Go Rin No Sho) by Miyamoto Musashi, a 17^th century Japanese Samurai, he describes five states of military strategy. They are air, fire, water, void and the mountain. Exxon is the mountain. When Exxon speaks, the world oil and gas industry listens.

After the North Slope oil and gas lease sale in 1972 that netted the State of Alaska $900M, the oil companies were not in any hurry to build a pipeline to bring Alaska’s North Slope oil (20,000,000,000 barrels) to market. Then Governor William "Bill" Egan (D) had to take the proverbial bull by the horns. In 1973, after months of wrangling with the oil companies, Egan threatened the oil companies that if they did not announce plans for a pipeline within the week, the State of Alaska was going to build an oil pipeline to Valdez. By the end of the week, the oil companies had announced plans for the Alyeska Pipeline Service Company which would build and operate the Trans Alaska Pipeline System (TAPS). Construction began in April, 1974.

Oil development on the North Slope had been moving forward since the 1960s.

The cost of TAPS, a 48 inch diameter steel casing pipeline 800 miles long was estimated at $900 million. By the end of construction in June, 1977, the cost had risen to $8 billion. The oil companies did have a 30 year tax write off for all expenses associated with the construction and operation of the pipeline. TAPS was allegedly paid for in the first 3 months of operation transporting 2,000,000 barrels of crude per day to Valdez for shipment by U.S. flagged tankers to refineries on the West Coast.

The cost of oil production on the North Slope steadily declined as the cost of construction and infrastructure was recouped over the years. Today, the profit margin for North Slope oil production varies, but using Conoco’s figures 2011 saw a profit of $25 per barrel of oil from North Slope Alaska production. It is this relatively high profit margin for a barrel of oil in relation to other hydrocarbon reservoirs world-wide that is the basis for resistence to any change in the Alaska’s Clear and Equitable Share (ACES) oil production tax.

Like AGIA, ACES was a product of then Gov. Sarah Palin’s Administration.

The North Slope profit margin of $25/barrel is much higher than the $1/barrel profit allowed under the Iraqi oil bids by Exxon in 2009.

In the1980s, a proposal was put forth to the oil companies on the North Slope and the State by Yukon Pacific, a consortium of companies including Sempra Energy, attempted to promote a natural gas pipeline project to Valdez. Yukon’s project was a 2 bcf/da-2.5 bcf/da capacity pipeline to terminus LNG port at Valdez. Meeting stiff resistance from Alaska’s governors who had their own pipe dreams, Yukon failed to make any progress after spending hundreds of millions of dollars on permits. Yukon sold most of its permits to AGPA.

Exxon’s position with respect to building a natural gas pipeline to take Alaska North Slope natural gas to market has aways been to settle the Thompson Point lease controversy with the State, then move forward. Or, to do nothing.

In 2006, Exxon had allegedly reached an agreement with Governor Frank Murkowski along with BP and Conoco to move North Slope gas to market. As was revealed when the "contract" was made public, the pipeline was just a pipe dream on the part of the Murkowski Administration. Exxon and the other North Slope Producers promised nothing, other than to study the issue, and, then at some indefinable point in the future to consider building a pipeline.

Exxon stated to its shareholders and to anyone who would listen during Murkowski’s Administration (2003-2006) that it was Exxon’s position that Alaska North Slope gas would begin flowing to market around 2025, given a construction start estimate of 2018-2020.

In 2009, in a suprise move, Exxon joined with AGIA contractor TransCanada to build a natural gas pipeline under AGIA. However, at that time, the focus was still on bringing Alaska natural gas and the valuable gas liquids to the Alberta Hub. It was suspected that Exxon’s involvement was self-serving, both acting to delay any pipeline decision or to redirect Alaska’s gas for Exxon’s benefit in the recovery of oil from Alberta’s tar sands.

It was demonstrated in 2010 during the Bill Walker for Governor campaign that this route was not profitable, and that Alaska’s natural gas would most likely end up in Ft. MacKenzie being used to recover oil from the massive Alberta tar sands desposits. The price of natural gas at the time was about $5/1,000 cf. The cost of transporting the gas from the North Slope to the Alberta Hub was estimated at $5, leaving no profit for Alaska to tax. The ‘unprofitable’ Alaska gas would then have been transported to Alberta freeing Canadian gas to go to market in the U.S.

The October 30, 2012 letter to Governor Sean Parnell declared Exxon, BP, Conoco and TransCanada were willing to study the feasibility of a pipeline to Valdez for conversion to LNG and transport to Asian markets.

Thompson Point is a massive high pressure gas deposit. By October, 2012, Gov. Sean Parnell’s Administration had reached agreement with Exxon regarding Thompson Point. The way was now clear to move forward with development of the Thompson Point gas field. The development of Thompson Point was considered necessary to produce the volume of natural gas to make any North Slope to tidewater natural gas pipeline project viable.

Exxon’s conflict of interest

Exxon’s 2009 move to join with TransCanada was surprising to most. Previously, in 2008, both BP Alaska and Conoco, the other two major North Slope Producers, had announced their own natural gas pipeline project. The Denali gasline project was another 4.5 bcf/da natural gas pipeline from the North Slope taking gas to the Alberta Hub.

What was paradoxical was that with Exxon’s joining with TransCanada in a competing project, all three Producers were now aligned with competing projects. Yet, all three companies’ gas production was necessary to make any natural gas pipeline viable. Therefore, neither AGIA nor Denali were viable. For whatever reason, neither Governor Sean Parenll nor the Legislature ever figured this out or completely ignored the reality of the situation. Governor Parnell continued to mouth platitudes about the viability of AGIA, Open Season and that AGIA would happen. The Legislature, however, took off on its own down an entirely different route.

Exxon’s conflict of interest where AGIA is concerned is in its foreign natural gas commitments.

In 2011, the first exports from Qatar where Exxon had invested $12B in upgrading the Northern Field LNG train to export LNG to the U.S. were delivered to the U.S., and immediately turned around for transport to Asia. "In cooperation with our partner Qatar Petroleum, ExxonMobil used its experience and knowledge of gas marketing around the world to successfully access traditional LNG markets in Asia, such as Japan and Korea, and develop new opportunities in Europe and the United States. ExxonMobil is proud to have played a role in helping Qatar become the world’s largest exporter of LNG." The shale gas revolution had impacted what was to be a 25 year commitment to bring Qatar LNG into the U.S. domestic gas market. That market no longer exists due to the low price for U.S. domestically produced shale gas.

(https://www.exxonmobil.com/Corporate/energy_production_lng_qatar.aspx)

The August 28, 2012 Platts and the Wall St. Journal reported ExxonMobil and Qatar Petroleum had formed a joint venture named Golden Pass Products which had applied for a domestic U.S. produced shale gas export permit overseas, including Asia. GPP is seeking to export 740 bcf of natural gas yearly from its LNG terminal at Port Arthur, TX. GPP would spend about $10B in upgrading the LNG train for export. The Port Arthur, TX LNG port would be able to export 2 bcf/da of natural gas.

(http://professional.wsj.com/article/SB10000872396390444375104577595760678718068.html?mg=reno64-wsj; http://blogs.platts.com/2012/08/28/worlds-biggest/; http://www.alaskadispatch.com/article/exxon-qatar-petroleum-apply-texas-lng-export-permit )

By contrast, the AGIA or AGPA LNG option to Valdez would ship up to 1,095 bcf of North Slope natural gas to market per year as LNG (3 bcf/da X 365 days).

On October 12, 2012, Bloomberg reported that Exxon, Conoco and TransCanada were estimating the cost of the AGIA natural gas pipeline to Valdez and LNG train to cost at between $45 to $65B and to take up to 10 years to construct.     (http://www.businessweek.com/news/2012-10-04/exxon-bp-estimate-alaska-lng-export-project-at-65-billion )  Exxon is developing the Australian Gorgan gas field located 130 kilometers off shore. Exxon owns a 25% share in the development. The Gorgon gas fields have a recoverable reserve of natural gas of an estimated 40 tcf. The market for Gorgon gas is Australia and Asia. In 2009, Exxon signed a deal worth $41B with PetroChina to provide the PRC with LNG. ( http://www.exxonmobil.com/Australia-English/PA/about_what_wa_gorgon.aspx ; http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a1_DE7dmIwE8 )

Exxon is negotiating with with CBM Asia Development to partner in the development of coal bed methane gas deposits in the Barito Baswin, South Kalimantan, Indonesia.
(http://finance.yahoo.com/news/exxon-mobil-cbm-asia-negotiate-133313186.html)

Exxon bought Celtic Exploration, Ltd.’s leases in the Duvernay and Montnay Alberta shale gas formations for $2.86B Canadian. Exxon also has leases in the Horn River British Columbia shale gas formation.
(http://www.bloomberg.com/news/2012-10-30/exxon-favors-gas-over-oil-sands-in-m-a-deals-corporate-canada.html )

　

Does Exxon have a reason to delay any Alaska natural gas development of its North Slope fields, including Thompson Point, given its Pacific basin and Qatar natural gas developments?

Does Exxon have a reason to delay the construction of any natural gas pipeline to move Alaska North Slope gas into a world market where that gas would compete with other foreign sourced gas projects in which Exxon has invested?

Is there any reason why the State of Alaska should not declare a breach of contract under AGIA for conflict of interest on the part of Exxon and TransCanada?

Does TransCanada have a conflict of interest?

 
Through Canada or to Valdez?

When former Governor Sarah Palin took office in 2007, she turned her back upon her campaign’s support of the all-Alaska natural gas pipeline to Valdez, even though she spoke in support of the project and stood with those who supported the project during the campaign. Supporters included former Governor Walter J. Hickel who was an outspoken proponent of the Valdez LNG project and a vocal opponent of Murkowski’s give away to Canada. Undoubtedly, her rising popularity was in no minor part due to her support of the all-Alaska natural gas pipeline to Valdez alternative to then Governor Frank Murkowski’s "contract" with Exxon, Mobil, and BP to build a 4.5bcf/da pipeline through Canada to the Midwest. Palin then beat former Governor Tony Knowles in the General Election in November, becoming the first woman governor of the State of Alaska.

By 2006, it was obvious to most Alaskans that then Gov. Murkowski’s pipeline contract was nothing but a promise by the oil companies to consider building a pipeline after much study and consideration. Exxon spoke of 2025 as the time frame for Alaska North Slope natural gas to move to market. Palin beat Murkowski in the August, 2006 Primary Election. Palin then won the November General election against former Governor Tony Knowles.

The die was cast for the Alaska Gasline Inducement Act.

Upon taking office, Sarah Palin literally reset on her support of the all-Alaska natural gas pipeline. Then Gov. Sarah Palin reappointed Tom Irwin as Dept. of Natural Resources Commissioner. Former Deputy Commissioner Marty Rutherford was also reappointed as Deputy Commissioner DNR. Both had been fired by by Gov. Frank Murkowski for disagreements regarding his actually having a contract with the oil companies to build a pipeline. However, both were firmly convinced that Alaska needed the large diameter 4.5 bcf/day pipeline through Canada to replace oil revenues from the Trans Alaska Pipeline Systems steadily declining volume transported to market. The North Slope oil production was about 700,000 barrels per day (bpd) at that time.

Irwin and Rutherford played a major role with legislative input in drafting AGIA. The project initially mirrored Murkowski’s project with one exception. The project did not rely solely upon the oil companies to build a gas pipeline. AGIA called for a competition with the best project as the winner. TransCanada became the sole competitor and was selected as the sole contractor under AGIA. The Alaska Gas Port Authority, a consortium of the cities of Fairbanks, Big Delta, and Valdez, submitted a proposal that was deemed late, incomplete and, therefore, not considered. By the gubernatorial election of 2010, the route was to the Alberta Hub, and not down through Alberta to the Midwest.

Since, AGPA has touted its route and LNG terminal plan as an alternative to AGIA. AGPA’s arguments have largely fell upon deaf ears in both the Paline/Parnell Administrations and the Legislature. Yet, the LNG market was demonstrating a major growth in Asia.

The contradiction in the volume of the planned pipeline projects, both Palin’s and Murkowski’s, was the Alaska Oil and Gas Conservation Commission limit of allowable production committed for export to market for North Slope Natural Gas. AGOCC set the amount at about 2-3bcf/da. This figure took into consideration the amount of natural gas necessary to keep the North Slope oil fields pressurized for continued production. Where Murkowski or Palin intended to come up with another 1.5 bcf/da between AGOCC’s limit and the 4.5 bcf/da capacity of their pipelines to Canada has to this day never been fully explained. Nor, has Governor Sean Parnell’s administration bothered to explain why his administration has continued to support TransCanada’s planned 4.5 bcf/da pipeline through Canada under AGIA in the face of the AGOCC’s limit on North Slope natural gas available for export.

In 2007, the Palin Administration announced the award of the AGIA contract to the sole applicant: TransCanada. TransCanada plans incorporated much of former Governor Murkowski’s pipeline. The volume was 4.5 bcf/da, the diameter a >=48 inch casing, the route through Canada to Alberta, then down to the Midwest. Later, TransCanada modifed its plan to use the Alberta Gas Hub distribution system to the U.S., thereby using existing pipelines to distribute gas to the U.S. from Canada. However, the price of the project continued to grow. The estimated cost for construction increased from $18B to over $40B by the gubernatorial election of 2010. From 2007 to today, little or no progress was made on the project. No permits for a route were issued in Canada or Alaska. No firm construction date was ever stated by TransCanada.

In 2008, Conoco and BP announced a competing natural gas pipeline project to Canada called Denali. The plan called for a 4.5 bcf/da natural gas pipeline to export North Slope natural gas to Canada. In May, 2011, Conoco and BP announced that the Denali project was no longer viable. About a week before that announcement, the Alaska president of Conoco’s Alaska operations stated that it was never the intention of Conoco or BP to bring Alaska’s North Slope to market, as they had intended to warehouse the natural gas indefinitely through reinjection back into the wells. Conoco and BP’s Denali proposal was intended to influence the course of Alaska’s legislative and gubernatorial policies pertaining to gas production and marketing of North Slope natural gas. The acts on the part of BP and Conoco amounted to fraud upon the State. The silence on the part of the Parnell Administration and the Legislature was deafening. (http://www.facebook.com/notes/alaskans-for-an-all-alaska-gasline/rebuttal-to-representative-les-garas-alaska-dispatch-opinion-piece-by-larry-wood/219621878075614)

On June 11, 2009, Exxon partnered with TransCanada. This partnership raised questions about the viability of just one producer on the North Slope participating in the project, when it was recognized that all three were necessary to any agreement to sell enough gas to move by pipeline. At that time, BP and Conoco were touting their "competing" Denali gasline project.

Since 1978, the completion of the TAPS oil pipeline, no discernible forward progress has been made towards actual construction of a natural gas pipeline in Alaska. Neither Denali’s nor TransCanada’s heavily publicized Open Seasons had produced any customers for their Alaska projects.

The reality of any natural gas pipeline from the North Slope, was that it took production from all three producers, Exxon, Conoco and BP, to provide sufficient natural gas to make a pipeline project viable. Further, the Point Thompson controversy between Exxon and the State also had to be settled.

The all-Alaska natural gas pipeline project first proposed by Yukon Pacific in the early 80s was for a 2.5 bcf/da pipeline from the North Slope to Valdez to be converted to LNG for export to the U.S. That was basically the same pipeline and volume intended in the plan voted on 2002. AGPA’s pipeline plan today is 3.0 bcf/da. Note that these volumes are within the AGOCC’s volume restrictions for North Slope gas export.

In mid-2011, Governor Sean Parnell finally awakened to the reality of the world LNG market. He suddenly decided that the only viable market for Alaska’s North Slope natural gas was as LNG to Asia. Since, he has tried to move AGIA in that direction. Under AGIA, TransCanada has the option to build a pipeline to a LNG terminus at Valdez for LNG export to market.

In October, 2011, Governor Sean Parnell called for a meeting with the North Slope oil producers to discuss a gasline and the LNG option. On January 6, 2012, Gov. Parnell met with Exxon’s CEO Rex Tillerson, BP Alaska’s CEO Bob Dudley, and Conoco’s Alaska operations CEO Jim Mulva in Anchorage. Gov. Parnell announced that he achieved a promise on the part of the producers to consider ways of getting Alaska’s North Slope gas to market. As promised, in a letter dated March 30, 2012, the oil companies outlined their intent to move forward on a gasline under AGIA. They updated their progress in another letter dated October 3, 2012. However, the progress was basically couched in terms declaring that ‘fiscal certainty’ was required for both a natural gas pipeline and any increase in oil production in Alaska. A position that the oil companies have steadfastly promoted for some time.

The first open season by TransCanada and Exxon ran from April 30-July 30, 2010. The second open season was conducted August 31-September 14, 2011. Both were apparently a bust with insufficient commitments to make any announcements regarding pipeline construction. Under AGIA, TransCanada has five years from the first open season before the project can be declared uneconomical and abandonment would be declared by either the State or TransCanada. (http://www.petroleumnews.com/pntruncate/285716809.shtml)

Today, Alaskans are still awaiting news of a natural gas pipeline project that will actually move North Slope natural gas to market.

Does TransCanada have a conflict of interest in its commitment to Kitimat?

Kitimat, British Columbia is the site of a proposed LNG terminal. In 2010, Apache Corp. announced the first agreements regarding LNG commitments with Korea. A 10 year commitment was made by Korea for Canadian LNG exported from Kitimat.

Since, the Kitmat development has expanded to include an additional LNG terminal and oil export capability to be built by a partnership lead by Shell to transport Alberta tar sands oil and LNG to Asia. The oil pipeline will be two parallel pipelines to be built by Enbridge. The pipelines would run 694 miles from Bruderheim, AB to Kitimat, B.C. with an estimated construction cost of $5.5B Canadian. Up to 1,000,000 barrels of crude per day would be transported by the pipelines.

TransCanada’s involvement and conflict of interest lies in its commitment to Shell to build a $4B (Canadian) 434 mile long natural gas pipeline from the B.C. shale gas fields to Kitimat. Kitmat’s LNG terminal will export approximately 1.2 bcf/da of LNG for Asian markets. Shell expects to export up to $10B in Canadian LNG to Asia through TransCanada’s pipeline. Shell is estimating a demand that will see up to 200 LNG tankers a year taking on LNG from Kitimat. The estimated completion date, given the environmental and indigenous lands rights of way issues, is expected by the end of the decade. The pipeline to be built by TransCanada is expected to measure over a meter (>39 inches) in diameter with an initial capacity of 1.7 bcf/da.

(http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/transcanada-wins-4-billion-pipeline-contract/article4231488/ ; http://www.transcanada.com/6054.html; http://www.coastalgaslink.com/ ; http://nwcoastenergynews.com/2012/06/05/2778/transcanada-build-shell-natural-gas-pipeline-kitimat/ )

Shell and its partners, Korean Gas, Mitsubishi, and PetroChina, are planning to build a separate LNG terminal from that planned by Apache Corp. back in 2010.

However, there may be a new wrench in the monkey works of the plans for any west coast LNG terminal, including Valdez.

TransCanada has an exclusive under AGIA. An exclusive normally implies a higher standard of commitment to the grantor than would an ordinary contract without an exclusive.

Given TransCanada’s commitment to Kitimat, should the State of Alaska move to declare breach to end AGIA?

Is there any basis in fact or common sense that would require the State to continue what is clearly a contract that is compromised by a conflict of interest by the grantee of the exclusive under that contract?

The latest cost estimate to construct a 3.0 bcf/da natural gas pipeline from the North Slope to Valdez is now estimated by TransCanada and Exxon to be $65B, including the LNG train at Valdez. The last estimate of the cost of construction for the AGIA Alberta Hub pipeline was approximately $40B. Compare the $65B cost of the AGIA LNG option to that the cost of the Kitimat 1.7 bcf/da >39 inch natural gas pipeline to be built by TransCanada under its agreement with Shell Oil. The cost of the Kitimat natural gas pipeline is just $4B Canadian.

(http://www.bloomberg.com/news/2012-10-04/exxon-bp-estimate-alaska-lng-export-project-at-65-billion.html)

Is the $65B price tag of the Alaska natural gas pipeline and LNG train under AGIA just hype to dissuade any protest at further delays?

Unlike the Gov, Sen. Lisa Murkowski is trying to sell LNG to Japan

Senator Lisa Murkowski (R-AK) raised the prospect of Japan buying Alaska natural gas to overcome the shortfall in power generation with the shutdown of 51 of Japan’s 53 nuclear reactors after the 9.0 earthquake off of the coast of Japan last year. Sen. Murkowski spoke with Prime Minister Yoshihiko Noda at a State Department Dinner hosted by Sec. of State Hilliary Clinton. Sen. Murkowski is the Vice-Chair of the U.S. Japan Interparliamentary Group. Sen. Murkowski has used this opportunity and her position to discuss the prospect of using Alaska natural gas in Japan in her discussions with her Japanese counterparts in meetings over the last week.

Senator Murkowski is meeting today with the acting secretary general of the Democratic Party of Japan.

Senator Murkowski has also asked President Obama to support the export of Alaska natural gas to Japan and to write a letter to the Japanese Prime Minister expressing his support Japan’s purchase of Alaska natural gas.

Sen. Murkowski seems to be doing something that our Governor and his administration have not bothered with. Sen. Murkowski is attempting to do the Governor’s job of selling Alaska’s natural gas to a viable customer who needs a reliable, long term supply of LNG.

Unlike Governor Sean Parnell, has refused to meet with two Japanese delegations sent to Alaska seeking to discuss the purchase of Alaska natural gas. The week after the March 11, 2011 earthquake and tsunami that devastated Japan, a Japanese business delegation came to Alaska to meet with Governor Sean Parnell. Parnell refused to meet with them. The week of Feburary 27th , a Japanese delegation again travelled to Alaska and attempted to meet with leaders of the State government. Two members of the Japanese delegation met with Dan Sullivan, Commissioner, Dept. of Natural Resources (DNR). Nothing was disclosed by Sullivan regarding the discussions other than to say that the meetings were of an “introductory nature” rather than defining any business goals. Bloomberg was reporting that Japan was sending delegations to Louisiana and Texas to discuss the possibility of buying U.S. natural gas to meet their energy shortfalls from the shutdowns of their nuclear power plants. Meanwhile, the only meetings the Japanese were able to hold in Alaska were with the Commissioner, DNR, that produced nothing of any consequence. On February 29, 2012, Lt. Governor Mead Treadwell had dinner with the Japanese delegation. Nothing has been disclosed since regarding any outcomes of those meetings with State officials.

Alaska has a 41 year history of exporting natural gas to Japan from Nikkiski. This is a history and partnership that can be used to Alaska’s benefit in marketing our gas to Japan. Yet, Governor has ignored this opportunity and advantage. Keiretsu and face are major components of the Japanese business deal. If one has good keiretsu (business associations, dealings, reputation) and good face (character, reliability, solid, honest), then one is in a very good position to do business in Japan. Alaska has such a relationship with Tokyo Power and Light, the customer for Alaska’s natural gas over the last 41 years. Yet, our governor and our Legislature ignore this fact and act as if Alaska has no interest in Japan as a market. When Dan Sullivan went to Asia recently to inquire about the viability of a market for Alaska natural gas in Asia, he did not go to Japan. Like the all-Alaska natural gas pipeline to Valdez championed by Bill Walker during his gubernatorial campaign supported by both the Alaska Gas Development Authority and the Alaska Natural Gas Development Authority (ANGDA), the idea of selling gas to the one reliable, long term customer that needs it, Tokyo Power and Light, is ignored by the Parnell Administration.

One can only wonder what could cause the Governor and the Legislature to ignore a certain customer with a very real need? Japan has been paying as much as $17 per thousand cubic feet of LNG delivered to Japan. Domestic U.S. price of natural gas was recently $2.02 per thousand cubic feet. There is no domestic market for Alaska natural gas in the lower-48.

The portent of the return of 300,000 barrels of North Slope Crude oil to the oil terminal at Valdez by the Alaska Explorer 11 April, 2012 should be a wake up call that Alaska is facing much larger problems than just a competitive natural gas market. Alaska’s literal fiscal future is at stake with oil flowing through a pipeline that may have to be shut down, not because of a lack of oil on the North Slope, but because of a glutted domestic market for oil.

Alaska will become a much quieter place in the near future if our Governor cannot bring himself to kill AGIA, to end the fiscal idiocy of committing another $200 million to a pipeline concept that cannot make money, and commit the State to build the all-Alaska natural gas pipeline to Valdez. Negotiating the best price for our gas and a long term commitment with Tokyo Power and Light and Mitsubishi would give Alaska the anchor customer necessary to finance the project.

Governor Parnell and this Legislature have done an incredible job of ignoring reality. That reality is about to bite all of us in the proverbial . . . posterior. Alaska’s future is growing dim and distant, with its youth and young adults the beneficiaries of a lack of foresight and concern that is incredible in the face of the information available to those in leadership positions.

Thank you, Sen. Lisa Murkowski for trying to the right thing for Alaskans in the face of a Governor and a Legislature that continue to ignore the obvious.

The oil glut just caught up with Alaska's oil dreams . . .

The shale oil revolution in the lower-48 has finally impacted Alaska.


On April 11, the 940 foot oil tanker Alaskan Explorer returned to Valdez from a two week journey to a refinery in Washington state after delivering almost 1,000,000 barrels of Alaska crude from the North Slope. For the first time since the Trans Alaska Pipeline System (TAPS) began transporting North Slope crude to the Alyeska Pipeline oil terminal at Valdez, 300,000 barrels (12,600,000 gallons) of Alaska North Slope crude oil was being returned to Valdez for the first time. (1 barrel = 42 gallons)

The day the crude oil was returned to Valdez by the Alaska Explorer, the oil storage tanks at Alyeska’s oil terminal were 90% full. The oil storage tanks have not been this full since the start of oil flowing down TAPS. Having to return oil added to the lack of capacity. This is a serious situation with respect to maintaining the oil flow from the North Slope.

One of the major concerns of Alaska’s politicians has been when will North Slope oil production fall to such a level that the TAPS will no longer be able to move the oil? This amount has been estimated to be a little as 300,000 barrels per day to as much as 500,000 barrels per day. If TAPS operations has to be stopped at present levels due to an oil glut in the lower 48, there is a very real possibility that TAPS operations may not be able to be restarted.

Last year, Thomas Barrett, the president of Alyeska Pipeline Company, warned the Legislature that any shut down of TAPS that lasted for more than three days could result in a permanent shut down of TAPS. The automation of TAPS in the 1980s removed the pumps from some of the pump stations, thereby reducing the ability to pressurize the pipeline. Present volumes are marginal with respect to restarting TAPS. The estimate of the shutdown volume was 300,000 barrels per day until 2010, when it was admitted by Barrett that the actual shut down volume could be as much as 500,000 barrels per day.

The reason the oil was returned to Valdez has been the increasing volume of oil produced from the Bakken Shale deposits in North Dakota and from other shale deposits in Texas and Pennsylvania. The same technology that has increased the natural gas reserves of the United States to as much as 200 years at present rates of consumption has now allowed access to oil previously considered unrecoverable.

Another factor is the reduction in the use of gasoline in the U.S. due to higher mileage vehicles. This has led to a decreased demand for crude oil in the face of increased supplies. The U.S. is now exporting refined gasoline in quantities not seen since the 1960s to Central and South America.

The Parnell Administration failed to publically note the return of Alaska crude to Valdez. To have made the public aware that Alaska crude was returned because of an oil glut Outside might have caused a problem for an Administration that has been heavily criticized for its lack of progress on a natural gas pipeline.

One thing is for certain, due to high international demand for crude in Asia, the price of gas is not going down appreciably anytime soon. The domestic price of crude is set by the international market.

The return of Alaska’s oil to Valdez has serious portent for the future of TAPS and for the market for Alaska’s crude. It would truly be ironic for TAPS to have to shut down because there is a glut of oil in the lower-48.

Have we come to this?

Dan Fagan, commentator and pundit with an afternoon radio show went into a screaming hissy fit today that was one for the record books. Dan is a showman, first of all, and an alleged conservative—or so he says. He called Bill Walker’s supporters commies and socialists. Those are exactly the terms that he used.

Why did this otherwise, articulate, experienced, and knowledgeable reporter go off the deep end?

Apparently, Dan Fagan reacted to the yes or no requirement put to the candidates by the moderator at the Resource Development Council forum held today. The candidates could only answer yes or no.

Fagan billed his revelation as proof positive that Walker was a socialist and union schill who could not possibly be a conservative.
Apparently, unbeknownst to Fagan at the time of his hissy fit, Bill Walker followed up on the answer in an interview by ADN report Sean Cockerham post the debate at the Resource Development Council Governor’s Forum today. What Fagan did not have to pass on was the “rest of the story”.

This is what Walker was quoted as saying in the ADN:
“Q—How did you vote on the 2006 gas reserve initiative? Yes, no or prefer not to say. (The question was about a proposal to tax North Slope natural gas reserves until a pipeline was built to bring them to market. It could have imposed up to $1 billion annual tax on the gas under land leased primarily by Exxon Mobil, BP and Conoco Phillips, most in the Prudhoe Bay and Point Thomson fields.)

Walker – Yes (Walker said in an interview after the forum that “we wanted to get the gas moving, the only thing we were missing for a gasline at that point was gas. At that point in time that looked like it was the way to go. I don’t believe that is the way to go at this point, the way at this point is to create the infrastructure. The producers have said…we will ship if there is a reasonable expectation of profit.”

Fagan is an accomplished reporter. He should have asked Bill Walker directly before labeling—slandering—Walker and his supports as commies and socialists in fit of outrage over a an absolute answer that was designed to reflect an absolutist position that did not apply to Walker. It should be stated that Walker has never served in the Legislature.

The Dan Fagan Show, on KFQD in the afternoon heavily promotes Ralph Samuels for governor.

Ralph Samuels is recognized as being in Third Place, folks, that’s why Fagan jumped without first “looking”. Fagan’s boy is losing, even with Rick Rydell on Keni 650 AM and Dan Fagan and Dave Stierens on KFQD 750 AM all pushing Ralph Samuels like he is our Savior and the only conservative running.

Fortunately, people are not stupid.

Former Rep. Ralph Samuels received over $10,000 from Bill Allen of VECO fame. This same former representative voted for the biggest capital budgets in the State’s history prior to Parnell’s whale of a budget. Those budgets included an increase in the size of state government by 800 employees. Yet, these “good conservatives” all tout Samuels as a fiscal conservative.

Yeah, well, if Samuels was a fiscal conservative, then I guess that would make Sarah Palin a fiscal conservative.

Samuels has also touted his leadership abilities. As House Majority Leader, his was the only vote against AGIA, Palin’s gas pipeline initiative. The only vote. In a House and Senate that did not really support or like Sarah Palin. Why was Ralph’s vote the only vote? When the going gets tough, and the objective is not what the troops want to achieve, a good leader picks up the pack and rifle and says, we gotta do it . . . let’s go. And, the troops either respect the leader enough to obey, or they don’t. Samuels stood alone. That shows me that he is not the hero that these guys continually represent him as, if he could not garner one additional vote in support of his position.

Samuels supports the bullet line, widely held by industry and the State to be too expensive to be competitive to imported LNG for Cook Inlet. That the bullet line would double the cost of natural gas in south central. How is that an economic plan?

Samuels also supports Conoco/BP’s Denali project. A gasline that does not have a market, and will take everything, the jobs, the money, the majority of the infrastructure to Canada. How is that putting Alaska first? How is that acting in concert with Article 8 Sec. 2 of Alaska’s Constitution? In this regard, Samuels shares common ground with Parnell.

Parnell supports AGIA, another take it all to Canada plan, and also supports the bullet line. Of course Parnell also considers himself above the law, given his problems with his appointment of legislators to the Governror’s office. These appointments were made in violation of Article 2 of the Constitution of the State of Alaska. How can we have a Governor who holds himself above the law?

Therefore, why does Fagan and the others try to paint the only gubernatorial candidate as other than what he really is? The only conservative running for the office of the governor of Alaska who will put Alaska and Alaskans first? And, who has a viable pipeline plan that 138,000 Alaskans mandated by vote in 2002?

If this man is a commie and an socialist to Dan Fagan, then Walker has good company in that regard. Given Ralph’s record, Rydell, Stierens and Fagan will have reconsider their labeling Sarah Palin as a RINO.

This race is too crucial for such silliness.

When TAPS falls to 300,000 bpd of oil, the system will be shut down. The problem of the oil companies going elsewhere is not ACES, but a combination of taxes, regulations and litigation . . . and, a world wide recession that reduced the demand for oil.

As a result of the regulatory environment, of which taxes are a part, and the litigatory environmental greenie assault on the oil industry through the courts, the oil companies went wherever they could work with as little environmental and regulatory hassle as possible. They went for as little as $1 per barrel of profit.
Yet, according to the pundits, it was all because of ACES.

Male bovine offal.

Alaskans must be informed. Please take the time to attend forums and read the websites of the various candidates. Listen to the pundits, but take what they say with a grain of salt. Fagan did his credibility a great deal of harm today by calling good people something that they are not: commies and socialists.

Fagan owes Bill Walker and his supports an apology and his listeners an apology for his acting without the “rest of the story”.

For more information:
http://community.adn.com/adn/node/152634?mi_pluck_action=comment_submitted#Comments_Container

Exxon and TransCanada announce LNG option!

http://www.alaskajournal.com/stories/062609/oil_img1_002.shtml

Tim Bradner of AJC has it first again.

Nice to know that I am correct in promoting the LNG option to getting Alaska's natural gas to market.

This option will give Alaska an in-state propane industry thanks to the forward thinking folks at the Alaska Natural Gas Development Authority. ANGDA has been working diligently to get our NG supply and distribution issues resolved. The propane initiative is a means to provide an alternate fuel for home heating in the Bush.

Bodes ill for Sarah Palin, as this was an option she campaigned on, then rejected upon becomming governor.

Once again, Sarah falls short.