Tuesday, June 29, 2010

Eventually the Projects Must Join

From the Houston Chronicle: Rivals may join to develop gas pipeline from Alaska

A BP-ConocoPhillips venture planning to build a huge natural gas pipeline from Alaska to the Lower 48 is in early talks to join a competing project headed by Trans- Canada and Exxon Mobil Corp., according to a source familiar with the projects.

The BP-ConocoPhillips project, known as Denali, would likely be tabled as the two companies team with the TransCanada project, said the source, who is not authorized to discuss the status of the projects and requested anonymity. With a price tag up to $40 billion, it's long been thought that only one of the projects would be built.

BP and ConocoPhilipsDave MacDowell, a spokesman for Denali, said he wasn't aware of such discussions but noted that BP and Conoco- Phillips have said they are open to "considering involvement of any entity that adds value and takes on risk."

Hey Anonymous - Leave me a comment

Friday, June 25, 2010

MIT: The Future Is A (Natural) Gas

From the Forbes blog (LINK): MIT has published an interim report titled "The Future of Natural Gas". The theme is carbon foot print theme in which shale gas comes to the rescue. The Alaska Gas Pipeline get mentioned as a future resource:

Around 15% of the U.S. resource is in Alaska; full development of this resource will require major pipeline construction to bring the gas to market in the lower 48 states (L48). Given the current abundance of L48 supplies, development of the pipeline is likely to be deferred yet again, but this gas represents an important resource for the future.
Alaska's methane hydate gas resource is mentioned:
Methane hydrates are unlikely to reach commercial viability for global markets for at least 15 to 20 years.
The report concludes
The share of natural gas in the energy mix is likely to be even larger in the near to intermediate term in response to CO2 emissions constraints.
I guess it's a given that our future energy policy will be crafted around the idea of climate change. Coal will become illegal, maybe nuclear will produce power for electric cars someday, but you can put nasty ole petroleum in your SUV or buy a combined cycle gas turbine power plant today for a lot less capital investment.

Friday, June 18, 2010

BP to cut capex, sell assets for $20bn payout

Tip of the iceberg. The Chicago shakedown is going to leave BP much less able to fund a share of the Alaska Gas Pipeline.

From UpStream Online: BP will slash its capital spending budget, sell $10 billion in assets and drop its dividend to pay for a $20 billion spill response fund.

File this one under "Crazy random occurrences 5000 miles away the screw your project into oblivion"

Friday, June 11, 2010

Denali Open Season Starts 6 July 2010

Normally this would be good news (LINK to FERC) as it is a tangible sign of progress by Denali in their efforts to authorize and build an Alaska Gas Pipeline. (Graphic links to Denali Source Page)

This fragment of good news is tainted by the overwhelming tragic news from BP, one of the Denali venture partners. I've watched the Deepwater Horizon tragedy unfold from the perspective of an old engineer who has seen bad decisions and errors lead to death and injury in the workplace. The loss of life and ruination evoke deep feelings of sadness and anger. I won't add my voice to the shrill din of those calling for the heads of BP's leaders. The marketplace will punish BP, and nobody knows how far our political leadership will go in their ham-handed approach to an industry they no little about.

In the end BP may be dissolved and gobbled up by Royal Dutch Shell or CNOOC (China National Offshore Oil Corporation). It's also possible that a severely weakened BP will emerge from this tragedy. I can't see how either outcome helps push and fund the Alaska Gas Pipeline proposed by Denali.

Sunday, June 6, 2010

"Energy Abyss" Prediction

"We hate the oil companies because government officials teach us to," he said, citing politicians who love to hold hearings criticizing Big Oil while ignoring what he called Washington's own shortsighted failure to think beyond the next election when considering energy issues.

The "structural dysfunction" regarding energy policy is likely to result in an insufficient number of new power plants being built and restrictions on drilling that will result in inadequate supplies of electricity and motor fuel "by the end of this decade," Hofmeister said at the Gas Shales Summit.

The "energy abyss" could include "blackouts and brownouts that make us look like a Third World country" and lines for gas selling at perhaps $6 to $7 a gallon, Hofmeister said. Gas is now selling at roughly $2.50 to $2.75 a gallon, compared with record U.S. prices in summer 2008 topping $4 a gallon.

"Wind and solar and biofuels aren't going to make it for us," he said.
Article by Jack Z. Smith Fort Worth Star-Telegram, Texas