The not-so-good news: The current low energy price trend combined with the credit crunch will conspire to limit or delay investment in the Alaska Gas Pipeline. Financially weak players like TransCanada don’t have the money to build a gas pipeline or the gas to fill it. (Link to TransCanada Colorado pipeline story)
Compounding factors: 1) The executive branch of the State of Alaska can’t get unstuck from stupid concerning Exxon. The “Drill Baby Drill” Governor has blocked Exxon from developing Point Thomson (Link to a speech by Larry Persily).
2) Lower 48 gas discoveries and development will continue to moderate gas prices. Energy producers will commit scarce funds in energy business friendly states before plunging into an Alaska Gas Pipeline project with no fiscal certainty.
The Wildcard: Barack Obama. Rescue programs, stimulus checks, bailouts, loans, debt swaps, you name it – 2009 will see a number of attempts to delay or deny the consequences of a decade of idiotic spending and lending. Obama is a wild card for the Alaska Gas Pipeline because it may seem like a good idea at some point to throw funding at the project in hopes of a favorable sound bite or two. Probability: Low, the happy bucket of bail out money will run dry long before the energy sector will get a dime, and that’s probably a good thing.
Prediction – Sideways in ‘09 No forward progress, no major setbacks.