This Weeks Pipeline Stories

While some may credit the AGIA and Alaska's Governor with moving the Alaska Gas Pipeline forward I suggest that you take a look at the chart and link to the left - It shows the price of natural gas more than doubled in the past year. Following the motto of "Lead, Follow or Get out of the Way" it looks like commodity pricing is leading, the producers (Denali Project) are following, perhaps the Governor should stay out of the way.

Links and news of interest:

Andrew Halcro has good summary of the rough and tumble world of lawmakers and the gas pipeline.

In case anyone thinks an Arctic gas pipeline project is easy take a look at this story by Ed Struzik of the Edmonton Journal. The article describes the trials and tribulations of the failing Mackenzie Delta gas line project.

This week Petroleum News carried a couple of stories worth passing on:

"Galvin on Mediation" -McGuire wants mediation; Revenue chief says Alaska first has to have position - Kristen Nelson, Petroleum News

"Definition, not mediation, please" Kristen Nelson, Petroleum News.

Cold War Brewing?

Jim Whitaker, Mayor of the Fairbanks North Star Borough sent this letter to the State Attorney General Talis Colberg. (Thanks to Andrew Halcro for posting the letter).

Sadly this is the shape of things to come - The high cost of energy will not go away in our lifetimes. The anti business political climate prevents folks from coming together to solve problems.

Instead people are divided by unreal expectations of free heat in the Arctic. You can't heat your home with lawsuits.

Perhaps the Mayor should draft a note to the various producers and ask for real world solutions with real world cost estimates so the citizens of the Fairbanks North Star Borough can have some sort of idea of what their cost of living will be 5, 10, 20 years down the road.

The U.S. average cost of residential natural gas is $14.30 per MSCF (per Energy Information Administration). When the Alaska Gas Pipeline gets built and starts flowing the cost will be much more than that. It's an ugly problem that will take some leadership and know how to solve in the near term and long term.

Good luck with the lawsuit approach.

Denali Dialogue?

Is it possible that a dialogue may open between lawmakers and the Denali Pipeline?

Senator Bill Wielechowski and Hollis French have some questions for Bud Fackrell.

Here's a link to the letter sent by Wielechowski French to Fackrell.

It's nice to know that they want to hear from the Denali team rather than just make assumptions.

Link to Stefan Milkowski's story in the News-Miner.

FERC approves Review of Denali Pipeline

The Federal Energy Regulatory Commission (FERC) has agreed to allow pre-filing activities to begin on the Denali gas pipeline.

This is good news from the standpoint of one of the competitors actually getting work done and moving forward.

Alaska Gas Pipeline - News and Views

It looks like free market economics might just produce an Alaska Gas Pipeline after all, maybe more. Here's a hand full of links from the mighty interweb:

The Voice of the Times is comparing Alaska's glam governor with Hugo Chavez. It's a good comparison, and it's been made before. Time will tell how well the anti-business, anti free market approach works.

The Denali Pipeline folks are getting down to work. Good!

Andrew Halcro is speaking beyond his blog.

Point Thomson is still in legal limbo but ExxonMobil plans to start drilling. Point Thomson is considered key to the development of the Alaska Gas Pipeline.

More information is coming forward on the TransCanada gas line proposal. Apparent $5/MMBTU is considered a good price by Governor Palin's team. That's a tough pill to swallow even for TransCanada supporters.

Wally Hickel supports the idea of exporting Alaska Gas as LNG to Asia via an All-Alaska Gas Line. That option avoids the risk of letting Canada control the project. He may not be the prettiest governor Alaska ever had, but what he says makes a lot of sense.

New Life for the All-Alaska Option?

I didn't see this coming - wow! Great News. This will allow competition between LNG buyers and Tar Sand producers in Canada.

Competition equals better prices for the gas and a sense of urgency to get the pipeline built.

It never hurts to have multiple outlets for your product.

The LNG option also secures markets without the potential for delays caused by foreign governments.

The project includes a spur line to Anchorage.

Read the Fairbanks News-Miner story here.

(Updated) Denali Gas Pipeline - Making Progress Times Two

From the Fairbanks News-Miner: "North Slope producers BP and ConocoPhillips took a preliminary step forward with their natural gas pipeline project this week, requesting the opportunity to work with federal regulators toward certification of the project, dubbed Denali."

From Reuters: The companies asked the Federal Energy Regulatory Commission over the weekend to start the formal review of a planned pipeline license application. The pre-filing for an application is a precursor to a long and rigorous process that is likely to take three years, said BP spokesman Steve Rinehart.

Great news - Somebody has their eye on the prize.

TransCanada did some maneuvering with the Canadian government to simplify regulation of gas produced outside Alberta.

Also - While TransCanada talks the talk the Denali team walks the walk. Denali opened a field office in Tok. Some times it pays to be the first-est with the most-est.