Norwegian LNG Reaches US Shores

The Alaska Gas Pipeline is not only about Alaska or the USA. The project is part of a larger global energy business. Today a tanker load of European LNG is headed for the USA.

Staoil effectively solved difficult technical problems, resolved financial and regulatory problems and started shipping products to a customer. In this case a customer with under-developed natural gas resources.

Senator Ted Stevens said that "the window of opportunity for our gas line is closing fast" speaking of to the Alaska Legislator about the Alaska Gas Pipeline. Each tanker load of Norwegian LNG proves his point.

Absence of Consensus

The Alaska Gasline Inducement Act (AGIA) was intended to create a gas pipeline project in an orderly step by step manner. The State of Alaska would offer a $500 Million inducement, bidder would submit proposals, proposals that meet the States list of "must" have would undergo legislative review, and a license would be granted to the winner.

With one week to go in the public comment phase of the AGIA it's safe to say that the process is not solidifying behind the qualifying bidder TransCanada. The public cover the entire spectrum, here's what people are saying:

Ted Stevens, in an address to the Alaska Legislator said "The right climate for this investment in our State must exist. Originally considered a $20 billion project, recent financial analysts’ comments indicate the cost will be $40 billion. No entity will commit that kind of money – whether $20 or $40 billion – without certainty in the financial aspects of the project’s economics.

In other public comments Stevens stated "that Congress will not provide additional federal money for TransCanada's proposal".

This comment was directed at the TransCanada notion that the US Government should act as a "bridge shipper" of Alaskan gas if the North Slope producers fail to commit sufficient gas during the first open season.

Governor Palin disagrees with and defended the AGIA process and progress. The rift between the senior Republican leads seems to be growing.


The other camp of political leaders in Alaska, the State Legislator evaluating the Port Authority LNG option.

Upcoming Events:

February 27th - Supreme Court will hear arguments in the Exxon Valdez case. A decision for Exxon will send emotional and political shock waves through the Alaska Gas Pipeline debate.

March 6th - AGIA public comment period ends

Ted Stevens Addresses State Legislature

Today Ted Stevens, the Senior US Senator from Alaska, addressed the Alaksa State Legislature.

Here's what he had to say about the Alaska Gas Pipeline, note the reference to "financial certainty":

Our first opportunity is our gas line.

In 2004, Congress authorized the Alaska Gas Pipeline which established the federal procedure for Alaskans to build a strong economic future and to help decrease our nation’s dependence on foreign energy sources. But the window of opportunity for our gas line is closing fast.

By 2015, our nation will import at least 40 percent of the natural gas we consume. The U.S. oil and gas industry has invested billions of dollars around the world to build Liquid Natural Gas (LNG) plants along with cryogenic tankers to bring that LNG to our shores.

In the U.S., new technologies will tap into the Marcellus Shale, a 6,000 foot deep reservoir in the Appalachians estimated to contain 50 trillion cubic feet of natural gas.

After our State’s review of the gas pipeline, federal agencies will review it. Ultimately the Federal Energy Regulatory Commission will license the pipeline to deliver Alaska’s gas to market.

Time is of the essence if our pipeline is to compete with foreign LNG and domestic sources such as the Marcellus Shale gas. I hope that working with the Governor you will resolve outstanding issues as quickly as possible so the federal permitting process may begin this year.

To achieve that goal, in my opinion, the right climate for this investment in our State must exist. Originally considered a $20 billion project, recent financial analysts’ comments indicate the cost will be $40 billion. No entity will commit that kind of money – whether $20 or $40 billion – without certainty in the financial aspects of the project’s economics.

All Alaskans, particularly young Alaskans, want this project started because of the jobs and economic stability the gas line will bring to our State. Governor Hammond’s idea for the Permanent Fund Dividend was for each Alaskan to share in our State’s future. Congress, at our request, in the Alaska Natural Gas Pipeline Act provided you the opportunity to follow Hammond’s example and allow Alaskans the opportunity to share ownership in our gas line.