“TransCanada's inclusion of an LNG option throws a curve into Alberta's hopes to expand its petrochemical industry, which is relying on Alaska gas volumes, especially the liquids contained in the gas stream, for feedstock. According to the Industry Canada website, there are currently insufficient volumes of feedstock to support big new investments in Alberta's petrochemical sector”.—Shaun Polczer, Calgary Herald 1/30/2010
http://www.calgaryherald.com/Alaska+could+bypass+Alberta/2502872/story.html
There it is in black and white from a Canadian source for those of you who still feel that there is any upside to allowing our gas to be transported to Canada.
What does Alaska get out of AGIA to Canada or Denali? SCREWED, THAT’S WHAT!!!!!!!
Any Alaska politician who supports either of the Canadian options should be voted out of office, if not outright impeached!
There is it is, Governor Sean Parnell.
Showing posts with label Alberta. Show all posts
Showing posts with label Alberta. Show all posts
Sunday, January 31, 2010
Saturday, January 30, 2010
AGIA is dead but for the politics
Obviously, AGIA is not dead. However, the announcement Friday of a cost increase of an estimated $41B is not conducive to supporting a belief that either AGIA or Denali can be feasible economically. Especially, since the completion date is estimated to be at least 2020.
Given that costs of operations on the North Slope have risen 68% from 2001 to 2009, one can reasonably figure that AGIA’s costs will increase between now and any anticipated start date, say 2015. Since AGIA’s estimated cost was about $15B-$25B, depending upon the source during the Palin v. Murkowski campaign, one can estimate that the completed cost will be somewhere between $75B and $100B by estimated shipment of the first gas in 2020.
Shell announced that it is cutting back its expansion of production of oil from Alberta’s tar sands from a target of 700,000bpd to 225,000bpd for the foreseeable future. Shell will be shifting its emphasis to offshore and onshore exploration, something the company had not emphasized until a recent change in management. Increased cost in the reduction in the expansion of the tar sands recovery was cited as the reason.
It is my belief that AGIA is dead, given the shale gas production Outside and in Canada. Exxon spent $41B buying the company with the largest shale gas holdings in the U.S. One also has to remember that Exxon is committed to a 25 year commitment with Qattar to bring gas to the U.S. The expansion of LNG terminals in the U.S. to 4.5bcf is an interesting number, as that was the planned capacity of big diameter pipelines from Alaska to Canada to the U.S. Any introduction of Alaska gas at that rate would have a depressing effect on the price of natural gas in the region in which it is introduced.
There are those who believe that the President will not allow Alaska to export LNG. That given this belief, the all-Alaska pipeline would not be feasible as Alaska’s gas could not then be exported. This position is belied by the fact that Alaska has been shipping gas from Nikkiski to Japan for the last 40 years. Given this fact, the all-Alaska pipeline would have a market in Asia, primarily in Japan.
The big question now, is what will be the outcome of the AGIA Open Season? Will the producers step up to send gas to Canada? Not likely, for the reasons stated above. However, AGIA was flexible, with a 2.0bcf pipeline to Valdez as the LNG option. That option may see interest, as Asia offers higher prices to Outside markets now uncertain because of shale gas development.
The outcome of the AGIA Open Season will not be known until NOVEMBER, after the general election is over. This plays in the favor of Gov. Sean Parnell. However, if the arguments on the part of Bill Walker regarding the viability and benefits of the all-Alaska pipeline option continue to find favor with Alaskans, Gov. Parnell will need something substantive to show the people that AGIA will produce results before the August Primary.
It is obvious, with the filing of HB312, that Rep. Jay Ramras, Rep. Mike Chennault, Rep. Mark Neumann, Rep. Bill Stoltze, Sen. Lesil McGuire, Sen. Charlie Huggins are hoping to confuse the idea of the Noah Parks Highway 500mcf pipeline sufficiently to get the people to forget that we voted for the all-Alaska route back in 2002 and again in 2006 with the election of Palin/Parnell. These legislators forget that they have ignored the will of the people as egregiously as did governors Murkowski, Palin and Parnell.
The reality here is that although there was no announcement, AGIA’s viability is suspect, due to the doubling of the price tag over less than 4 years. That fact cannot be attractive to potential investors.
The only sure thing is the all-Alaska natural gas pipeline proposed by Bill Walker, and voted upon by Alaskans in two separate elections. That pipeline is permitted, and ready to begin construction. All it needs is a governor to lead the way.
Given that costs of operations on the North Slope have risen 68% from 2001 to 2009, one can reasonably figure that AGIA’s costs will increase between now and any anticipated start date, say 2015. Since AGIA’s estimated cost was about $15B-$25B, depending upon the source during the Palin v. Murkowski campaign, one can estimate that the completed cost will be somewhere between $75B and $100B by estimated shipment of the first gas in 2020.
Shell announced that it is cutting back its expansion of production of oil from Alberta’s tar sands from a target of 700,000bpd to 225,000bpd for the foreseeable future. Shell will be shifting its emphasis to offshore and onshore exploration, something the company had not emphasized until a recent change in management. Increased cost in the reduction in the expansion of the tar sands recovery was cited as the reason.
It is my belief that AGIA is dead, given the shale gas production Outside and in Canada. Exxon spent $41B buying the company with the largest shale gas holdings in the U.S. One also has to remember that Exxon is committed to a 25 year commitment with Qattar to bring gas to the U.S. The expansion of LNG terminals in the U.S. to 4.5bcf is an interesting number, as that was the planned capacity of big diameter pipelines from Alaska to Canada to the U.S. Any introduction of Alaska gas at that rate would have a depressing effect on the price of natural gas in the region in which it is introduced.
There are those who believe that the President will not allow Alaska to export LNG. That given this belief, the all-Alaska pipeline would not be feasible as Alaska’s gas could not then be exported. This position is belied by the fact that Alaska has been shipping gas from Nikkiski to Japan for the last 40 years. Given this fact, the all-Alaska pipeline would have a market in Asia, primarily in Japan.
The big question now, is what will be the outcome of the AGIA Open Season? Will the producers step up to send gas to Canada? Not likely, for the reasons stated above. However, AGIA was flexible, with a 2.0bcf pipeline to Valdez as the LNG option. That option may see interest, as Asia offers higher prices to Outside markets now uncertain because of shale gas development.
The outcome of the AGIA Open Season will not be known until NOVEMBER, after the general election is over. This plays in the favor of Gov. Sean Parnell. However, if the arguments on the part of Bill Walker regarding the viability and benefits of the all-Alaska pipeline option continue to find favor with Alaskans, Gov. Parnell will need something substantive to show the people that AGIA will produce results before the August Primary.
It is obvious, with the filing of HB312, that Rep. Jay Ramras, Rep. Mike Chennault, Rep. Mark Neumann, Rep. Bill Stoltze, Sen. Lesil McGuire, Sen. Charlie Huggins are hoping to confuse the idea of the Noah Parks Highway 500mcf pipeline sufficiently to get the people to forget that we voted for the all-Alaska route back in 2002 and again in 2006 with the election of Palin/Parnell. These legislators forget that they have ignored the will of the people as egregiously as did governors Murkowski, Palin and Parnell.
The reality here is that although there was no announcement, AGIA’s viability is suspect, due to the doubling of the price tag over less than 4 years. That fact cannot be attractive to potential investors.
The only sure thing is the all-Alaska natural gas pipeline proposed by Bill Walker, and voted upon by Alaskans in two separate elections. That pipeline is permitted, and ready to begin construction. All it needs is a governor to lead the way.
Thursday, January 8, 2009
Concoco-Phillips Denali Project
The decision by BP and Conoco Phillips to build a pipeline to take North Slope NG to Canada is a definite change of heart for two out of the three Producers on the North Slope.
I believe the reason for this change is not because all of a sudden BP and Conoco want to get NG off the North Slope, but rather because the alternatives are lacking for another high priority project.
Between unstable tundra along the proposed route due to permafrost melting to legal challenges by Deh Cho and other Native groups, and as yet unsettled right of way regulatory issues, the NG from the MacKenzie River Delta that was intended to fuel the separation of oil from the Alberta Tar Sands is not going to be available within the time frames originally envisioned for the MacKenzie River Delta pipeline project. An alternative had to be found, and Alaska’s North Slope gas reserves is that alternative.
The increasing price of oil is driving the recovery of oil from Alberta Tar Sands at an ever increasing pace. A supply of cheap NG is necessary to the economic viability of the separation process.
The only long term viable source of NG without rights of way issues at least to the Canadian border is found on Alaska’s North Slope. The rights of way and other issues would still have to be worked out to get the NG to Alberta, but, undoubtedly, BP will wield considerable influence in dealing with the Canadian side, given the Crown’s interest in BP along with the imperative to get the Tar Sands oil to market.
It is unlikely that Exxon will seek its own means to transport NG off the North Slope, especially with the promises made regarding development of the Pt. Thompson NG reserves made in order to retain those leases. Exxon is in a market it or else situation with the Pt. Thompson NG reserves. Therefore, it is reasonable to assume, that although unannounced, Exxon will eventually join with BP and Conoco Phillips.
Exxon was a player in the MacKenzie River Delta pipeline project, and a major advocate of taking Alaska’s NG over the top and plugging into the anticipated MacKenzie River Delta pipeline system.
Through a subsidiary, Exxon is also a major player in the Alberta Tar Sands project.
A major concern of those who live in the Mat-Su Valley is whether or not there will there be a provision for a spur line from Big Delta down to the Palmer Enstar NG Hub to provide NG for south central?
It is already a fact from the last round of this game under Murkowski that Alberta was all too willing to provide a ready market for Alaska’s NG liquids, such as propane and butane.
Will the Governor and the Legislature allow these valuable NG liquids to be transferred to Canada without proper consideration given to the long term benefits of value added processing in Alaska?
Stripping them out and using these gas liquids here would provide the building blocks for a petrochemical industrial base. A benefit with economic benefits far beyond just resource extraction that the pipeline represents.
Obviously, value added development of our NG resources would allow Alaskans greater opportunity beyond just the construction of a pipeline. Once the last pipe is welded into place, the pipeline jobs go away. Value added industrial development would be a lingering base upon which to ensure that the benefits from our NG resources go beyond fueling bloated, growing, and ever greedy state and local governments.
If the money goes directly to government, we all lose. If there is value added development, then we the people will benefit along with the Producers and government through jobs and infrastructure upon which to build industry.
The challenges for the Palin Administration, the Legislature and the Producers will be to balance the interests of all parties against the imperatives of the looming south central NG crisis, the economics of the proposed pipeline, and the constitutional requirement of the State to gain maximum benefit from the exploitation of this nonrenewable resource versus the interests of the Producers with respect to their profit motive.
Until there is a NG pipeline from the North Slope generating revenue, our responsibility as citizens will be to see that our elected officials do not spend revenue that is not there. And, to see that maximum benefit is exactly what is bargained for across the board.
Another blog dealing with this subject is to be found at http://www.blogged.com/about/denali-pipeline/
I believe the reason for this change is not because all of a sudden BP and Conoco want to get NG off the North Slope, but rather because the alternatives are lacking for another high priority project.
Between unstable tundra along the proposed route due to permafrost melting to legal challenges by Deh Cho and other Native groups, and as yet unsettled right of way regulatory issues, the NG from the MacKenzie River Delta that was intended to fuel the separation of oil from the Alberta Tar Sands is not going to be available within the time frames originally envisioned for the MacKenzie River Delta pipeline project. An alternative had to be found, and Alaska’s North Slope gas reserves is that alternative.
The increasing price of oil is driving the recovery of oil from Alberta Tar Sands at an ever increasing pace. A supply of cheap NG is necessary to the economic viability of the separation process.
The only long term viable source of NG without rights of way issues at least to the Canadian border is found on Alaska’s North Slope. The rights of way and other issues would still have to be worked out to get the NG to Alberta, but, undoubtedly, BP will wield considerable influence in dealing with the Canadian side, given the Crown’s interest in BP along with the imperative to get the Tar Sands oil to market.
It is unlikely that Exxon will seek its own means to transport NG off the North Slope, especially with the promises made regarding development of the Pt. Thompson NG reserves made in order to retain those leases. Exxon is in a market it or else situation with the Pt. Thompson NG reserves. Therefore, it is reasonable to assume, that although unannounced, Exxon will eventually join with BP and Conoco Phillips.
Exxon was a player in the MacKenzie River Delta pipeline project, and a major advocate of taking Alaska’s NG over the top and plugging into the anticipated MacKenzie River Delta pipeline system.
Through a subsidiary, Exxon is also a major player in the Alberta Tar Sands project.
A major concern of those who live in the Mat-Su Valley is whether or not there will there be a provision for a spur line from Big Delta down to the Palmer Enstar NG Hub to provide NG for south central?
It is already a fact from the last round of this game under Murkowski that Alberta was all too willing to provide a ready market for Alaska’s NG liquids, such as propane and butane.
Will the Governor and the Legislature allow these valuable NG liquids to be transferred to Canada without proper consideration given to the long term benefits of value added processing in Alaska?
Stripping them out and using these gas liquids here would provide the building blocks for a petrochemical industrial base. A benefit with economic benefits far beyond just resource extraction that the pipeline represents.
Obviously, value added development of our NG resources would allow Alaskans greater opportunity beyond just the construction of a pipeline. Once the last pipe is welded into place, the pipeline jobs go away. Value added industrial development would be a lingering base upon which to ensure that the benefits from our NG resources go beyond fueling bloated, growing, and ever greedy state and local governments.
If the money goes directly to government, we all lose. If there is value added development, then we the people will benefit along with the Producers and government through jobs and infrastructure upon which to build industry.
The challenges for the Palin Administration, the Legislature and the Producers will be to balance the interests of all parties against the imperatives of the looming south central NG crisis, the economics of the proposed pipeline, and the constitutional requirement of the State to gain maximum benefit from the exploitation of this nonrenewable resource versus the interests of the Producers with respect to their profit motive.
Until there is a NG pipeline from the North Slope generating revenue, our responsibility as citizens will be to see that our elected officials do not spend revenue that is not there. And, to see that maximum benefit is exactly what is bargained for across the board.
Another blog dealing with this subject is to be found at http://www.blogged.com/about/denali-pipeline/
Subscribe to:
Posts (Atom)