1-15-13 - Part II Of The Alliance Report And Much Ado About Gas Pipelines

Peninsula Clarion by Brian Smith. Local lawmakers will pitch several measures addressing issues like an in-state gas line, corporate taxes, interstate mining lobbying and governmental audits when the first session of the 28th Alaska State Legislature gavels in Tuesday. Perhaps the biggest piece of legislation a local legislator has tagged his or her name to is House Bill 4, the newest incarnation of last year’s effort from House Speaker Mike Chenault (NGP Photo-L) and Rep. Mike Hawker (NGP Photo) to see a 24-inch, 500 mcf per day gasline built from the North Slope to Southcentral Alaska.

The Alaska Stand Alone Gas Pipeline is the topic for the next meeting of the Resource Development Council, 7:30 a.m., Dena’ina Convention Center. Frank Richards, manager of pipeline engineering with the Alaska Gasline Development Corp., will speak.

Alaska Dispatch by Alex DeMarban. Alaska’s pipe dream to export its vast riches of natural gas were pounded again last week, as the same pipeline builder licensed to build and operate a mega-gasline in Alaska announced it had been selected to build a potentially competing project in western Canada.

It’s the second such Canadian line that TransCanada has won the right to design and build in recent months, raising questions about where the pipeline builder — eligible for up to $500 million in a state subsidies to build the Alaska line — will focus its attention in the coming years.

Adding to concerns about the long-sought Alaska gasline project — considered vital to the state’s economic future — is the fact that numerous potential Lower 48 competitors are cranking up efforts to export liquid natural gas to Asian markets. Numerous applications to do just that sit before the Department of Energy, putting those projects ahead of Alaska in that regard.

Realism Collided with Optimism at Friday’s Alaska Support Industry Alliance Annual Conference (PART II)

Dave Harbour

Yesterday we began our summary of the day, here. The speakers who commented on Alaska’s future for the most part radiated a certain optimism for the potential of Alaska’s vast resource base. They then tempered that optimism by conditioning it on an improved investment climate. Readers will see more of that theme as we continue to review some fascinating presentations.

Next came Alliance Board Member Eric Dompeling (NGP Photo-r), introducing ExxonMobil’s Steve Butt (NGP Photo-below-L), who mostly focused on the company’s Point Thomson development.

He uses the theme, "unlocking the Arctic", as a way of launching into the tremendous technological capabilities his company had developed worldwide. He described project technology used in Sakhalin, Arctic-Canada, and on the Alaska North Slope organized around a new paradigm: the "diamond". As an mere audience member, this concept seems to allow the company to allocate resources to project functions based, in part, on how much hurt they would cause were there a malfunction. The higher the hurt, the higher the priority. He said these large projects had one thing in common: "They’re big; you build them somewhere else; you move them to where you need them; and, you begin production."

Butt closed by discussing the conceptual design of the Alaska gas pipeline and liquefaction project now being studied by the Alaska gas pipeline consortium. "One thing that gives me great solace now is that the three producers and TransCanada compose a consortium of interests … all working together."

Unlike the ConocoPhillips Alaska and BP Alaska presentations, Butt avoided linking future plans to fiscal certainty, tax reform or other political issues.

Here is Butt’s slide presentation.

Over lunch, former EPA Administrator Christine Todd Whitman (NGP Photo) delivered the keynote speech. Author of the book, "It’s My Party Too", Whitman said that during her years with the Bush Administration, "We believed that protecting the environment and economic development were not mutually exclusive".

Whitman acknowledged Alaskans’ frustration with examples of the EPA’s aggressive style (i.e. We have labeled EPA’s action relating to Shell’s work as, ‘discriminating, picky, harassing and endangering our country’s national defense and economic survival‘. In other cases we have said the agency is ‘overreaching its jurisdiction’).

September 12, 2012, Anchorage, Alaska – Citing a complete failure to take the State of Alaska’s views Sean Parnell, Governor, Alaska, Cooperating Agency, BLM, NPR-A, DOI, EPA, Salazar, Photo by Dave Harbour

Sean Parnell, Governor, Alaska, Cooperating Agency, BLM, NPR-A, DOI, EPA, Salazar, Photo by Dave Harbour

into consideration, Governor Sean Parnell (NGP Photo) today announced the State will immediately withdraw as a cooperating agency from the Memorandum of Understanding concerning the National Petroleum Reserve – Alaska (NPR-A). Last month, without providing any notice to the State or any other cooperating agency, Interior Secretary Ken Salazar announced millions of acres in the NPR-A will be off limits to development as part of the new NPR-A land management proposal.

“Your recent surprise announcement of a preferred alternative effectively withdrawing millions of acres in NPR-A (an area designated by Congress for oil and gas development to meet the energy needs of the nation), and the complete failure of the Department of the Interior to take into account the State’s comments as a cooperating agency, as required by federal statutes, regulations, BLM handbooks and policies, shows a complete lack of respect for the views of the State,” Governor Parnell wrote to Secretary Salazar.

The State had provided comments supporting full development of oil and gas resources in the NPR-A, with reasonable mitigation measures. The State’s recommendations were not included in the selected alternative.

Governor Parnell urged the Secretary to start the process over and include input from the state.View the letter.

In response to EPA’s Alaska activity, Whitman counselled the audience that, "With the new EPA administration, there is opportunity to change the form and substance of your relationship with EPA."

Whitman made what could have been an oblique reference to Goverrnor Parnell’s decision to withdraw as a ‘Cooperating Agency’ in wake of the Interior Department’s (DOI) lack of concern for Alaska’s position on management of the National Petroleum Reserve-Alaska (See sidebar story, 9-12-12). The DOI is not the EPA, but the agencies both march to the cadance of the master drummer in the White House. She said, "It is very important that you have a seat at the table". She urged the state to not walk out on federal state negotiations. She advised the state to express ‘shared concern’ for the environment and offer alternatives. She further urged Alaska to adopt the attitude that, "If you dont like what they are doing, at least acknowledge the ‘why’ of what they are doing."

She said the state should recognize EPA employees ‘care about the environement and that Alaska should approach them with a ‘partnership spirit’.

We respect Whitman’s sincerity and believe that Alaska has approached the Obama Administration as she suggests. However, after having experienced arbitrary and caprecious action, disrespect for state soverignty, phoney application of ‘due process’ and a general breakdown of the rule of law as it applies to citizens and state governments, we believe Alaska is not only justified but required to defend itself from the federal bureaucracy. The Obama regime is conducting itself not as a just and reasonable manager of natural resources and federal policies, but as a despot that rules by fiat and bias.

(Read more tomorrow….)