Here's a link to a good news story, big Exxon LNG project moving forward - Only one problem - It's not in Alaska.
NEW YORK, Dec 17 (Reuters) - Exxon Mobil said on Wednesday it has received delivery of two of a new breed of massive liquefied natural gas (LNG) tanker this month, which will ship gas from projects in Qatar to importing markets around the globe.
According to Marty Rutherford, deputy commissioner of natural resources:
"We believe it's only a matter of time until all the parties come together to accomplish our mutual goal"(Link to full story).
Build a short gas line to Valdez and sell liquefied natural gas (LNG) to the highest bidder. It's a capital idea sidetracked by the Alaska Gasline Inducement Act (AGIA). As the reality of AGIA sets in expect more calls like this one (LINK) from Alaska Gasline Port Authority board member Merrick Peirce (quote from Fairbanks News Miner):
"The Legislature should toss out AGIA as soon as it gets back in session, and it should get to work on the Alaska gas line. It is the only way Alaska can avoid economic devastation. If the Legislature refuses to change course, then legislators have the obligation to explain how they will replace declining state oil revenue. Do they prefer to end the dividend program first, then impose an income tax, or do they want to slash state spending and lay off state employees? What will that do to our economy?"You know the old saying about all the eggs in one basket - Well the Canadian basket is getting pretty full - they got the $500Million inducement, they want billions in loan guarantees, the want a guaranteed high rate of return, and they can't promise regulatory approval anything built in Canada. It's going to get ugly before it gets better so hang on!
By Scott Haggett (Forbes)
CALGARY, Alberta (Reuters) - TransCanada Corp , which was sanctioned by Alaska last week to build a $26 billion pipeline to ship the state's natural gas, wants the U.S. government to boost the loan guarantees offered for the project, its chief executive said Tuesday.
Hal Kvisle, chief executive of Canada's biggest pipeline and power company, said inflation has cut the value of the $18 billion in loan guarantees authorized in 2004 by the U.S. Congress, which was then looking to speed construction of the massive project.
From Geoffrey Dunn of the Huffington Post (LINK to full story):
Palin has always been fast and loose with the truth (and her capacity for self-promotion would seem to know no bounds), but her duplicity about the pipeline extends far beyond whether it is currently being built or not --it is not--but whether or not it ever will be built. "That pipeline," she declared at the GOP convention, "when the last section is laid and its valves are opened, will lead America one step farther away from dependence on dangerous foreign powers that do not have our interests at heart."
Well the first section is at least six years away, and many contend that it will never be built at all. As one Alaskan state legislator grumbled at the license signing, "This AGIA license is not a commitment to do anything other than process a whole lot of paper."
Palin has repeatedly trumpeted the pipeline as an example of her energy know-how and pragmatic politics. She also has claimed, as she did at the convention, that she has single-handedly imposed "competition and basic fairness" to oil and gas production in the Last Frontier.
In fact, as is often the case with Palin, it's all hat and no saddle.
Zane Henning, a longtime critic of Palin and an oilfield worker on the North Slope, says "I can guarantee that the AGIA pipeline will not be built unless the State of Alaska passes a long-term tax policy that the oil companies agree with."
There's that comment again - long term fiscal certainty. You think that concept will ever soak into Palin's head? We may not be making real progress towards a pipeline, but all the bad ideas need to run their course before we get down to business.
Apparently not all Canadians think the Alaska Gas Pipeline is a good thing. Here's a link to a Canadian opinion that Alaskan gas will lower prices and hamper gas development of Candian natural gas.
"While construction of the Alaskan pipeline will likely have a positive impact on Canada's economy in the shorter term, once it is up and running it will make Alaska into a direct and effective competitor for Alberta and BC's natural gas industry," said Ralph Glass, VP Operations of AJM Petroleum Consultants. "Looking ahead, we have to consider the fact that the Alaskan pipeline will increase natural gas volumes into the US market. This could keep natural gas prices low in future years - low natural gas prices will have a significant impact on future drilling here in Canada."
The Fairbanks News-Miner has this story (LINK) on relationship between the drilling halt at Point Thomson and putting gas in the Alaska Gas Pipeline. The story tells the weird math of the Alaska Palinista Army, i.e. you don't need gas for a gas pipeline.
State officials like to call Exxon "liars" like this quote from Marty Rutherford, deputy commissioner of the state Department of Natural Resources:
“Exxon is very nervous about losing that unit and those leases,” Rutherford said. “They are putting a lot of pressure on the state. But at the end of the day, we’ve gotten commitments from them previously that they haven’t honored."Exxon is also providing (or attempting to provide) employment to lots of contractors and companies in Alaska. The actions of "Drill Baby Drill" Palin have sent hard working taxpayers to the house. Maybe she should be getting nervous about her political future.
The smug, self assured presidential wanna be Governor is standing between the development of natural gas and the pipeline itself. In the end Palin may indulge her narcissistic need to teach Exxon a lesson but she should remember that her actions are costing people their jobs. Those those people vote.
I'm always keen to talk about the price of oil, the future of the Alaska Gas Pipeline, gas prices, Tar Sands and energy conservation. Since October the wheels have pretty much come off the truck. I feel like I've seen this movie before like maybe 1985-87 when life for a young engineer in Texas kinda sucked.
You read a lot of articles that curse the oil companies or the speculators. I dismiss those folks as clueless, they have no skin in the game, they haven't seen the industry from the inside. The story is that our economy is very complex, highly optimized and totally interrelated.
I found a good article that sums this up well - The Looming Energy Crisis Oil Prices: Why the Past is Not Prologue By Chris Nelder. It's the source of the quote of the week, Mr. Nelder says:
By focusing on the financial markets without seeing their connection to everything else, we have truly missed the point, which is that energy is the real economy, and money is merely an artificial representation of it. Consequently, twiddling with interest rates, and other measures that don't produce more energy or decrease demand for it, ultimately don't cure our problems at all.To be honest I look forward to $150/bbl oil and $15/MMBTU natural gas. My reasons are selfish, I'll be the first one to admit that - but society needs to understand that energy resources are precious and should be conserved and used carefully and thoughtfully. Squandering energy on soccer mom SUV's and 5,000 square foot Mac-Mansions is not going to build a better society.
Natural Resources Commissioner Tom Irwin and Revenue Commissioner Patrick Galvin signed the Alaska Gasline Inducement Act in Fairbanks yesterday (LINK).
The ceremony was attended by Hal Kvisle, president and chief executive officer of TransCanada - The same man who earlier this year said no body is happy until Exxon is happy. These days Exxon is not happy - not happy with Natural Resources Commissioner Tom Irwin who recently shut down Exxon's efforts to start drilling at Point Thomson.
You'll need your breakup boots to wade through the non-sense these politicians are dishing out. Gavin got one point right:
"Much work remains, and we will keep working with all project stakeholders to make the natural gas pipeline a reality"Issuance of the AGIA license is a milestone in the sense that the saga can move on to the next stage, but the actual pipeline will not move forward until all the players are on the same team.
BP, Conoco Phillips and ExxonMobil — own the gas. They have consistently stated that they cannot work within the terms outlined in the Alaska Gasline Inducement Act and reflected in the agreement with TransCanada.
Alaska doesn’t have years in which to allow this to unfold. It is imperative that the administration and the producers reach an agreement. Since AGIA does not allow the administration to negotiate with the producers outside the process that has led to the TransCanada agreement, the state’s options are limited. We hope those limits do not doom the agreement to failure or years of delay.
Looks like the Canadians are pushing forward with the Mackenzie pipeline. (from upstreamonline.com):
"I'm actually very optimistic because a lot of the work that needed to be done has now been done," Environment Minister Jim Prentice told Reuters in an interview.Now is the time to build - the first pipeline built will get better pricing on commodities and labor.
The pipeline's backers, led by Imperial Oil, have also been in talks with Ottawa over their request for financial breaks that would make the huge project economically viable.
"Pending receiving the environmental Joint Review Panel work, the fiscal framework continues to be an outstanding issue," said Prentice. He said he felt the Mackenzie project was now most likely five to six years' ahead of the proposed Alaska pipeline, compared with a gap of two years in 2005.
The Mackenzie pipeline would ship up to 1.9 billion cubic feet of gas a day 1200 kilometres along the Mackenzie River Valley in the Northwest Territories to Alberta, where it would link up with existing lines serving Canadian and US markets.
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