4-24-18 Important Reader Comment

We appreciate the lucid and studied comments of our readers, including this one reflecting our last Friday’s editorial:

Author: Donald M. Bullock Jr. 
URL: https://northerngaspipelines.com/4-20-18-should-alaskan-politicians-align-their-states-future-with-communist-chinas/

Very well written Mr. Harbour. It is painful watching the Alaska Gasline Development Corporation (AGDC) going down the same unproductive path as the dead Alaska Gasoline Port Authority (AGPA). At this time, AGDC has no gas to sell. The State of Alaska also has no gas to sell until those lessees that have the exclusive right to produce the gas actually produce and convey gas to the State as royalty and production tax.  AGDC has described the market price the gas must hit with a fixed $1 per barrel equivalent for gas. Any cost overruns will reduce that dollar with the leaseholders taking the hit. Seems a better approach would be to assure a gas supply before selling an interest in an empty project.

Should the State ever have gas to sell, the worst thing would be to have the State contractually commit an American valuable natural resource to any foreign nation, particularly a nation such as China with a track record of very poor international business practices. Any default by China or a Chinese entity would be hell to enforce and would lock up the resource indefinitely.

The Walker administration is spending money for a no gas project that the State can’t afford and is approaching it backwards. A better approach would be to engage the leaseholders in potential gas sales that are subject to reasonable transportation costs (pipeline, LNG plant, and LNG vessel transportation). I fear the administration will repeat another misstep of AGPA, that is to sue the leaseholders in an effort to force them to produce. The State may end up with the gas leases returned to the State, with the lessees continuing to hold oil and gas leases that are producing oil consistent with lease terms. The companies can be expected to produce only if production is economically viable. The “commitment” letters waved by the governor commit to no more than commercially economic production.

Engaging a country like China in the development of an empty project is the least of concerns with this project.

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About the Author:

Dave Harbour, publisher of Northern Gas Pipelines, is a former Chairman of the Regulatory Commission of Alaska, a Commissioner Emeritus of NARUC, NARUC's Official Representative to IOGCC and Vice Chairman of NARUC's Gas Committee. He served as Gas Committee Chairman of the Western Conference of Public Service Commissioners. He also served as commissioner of the Anchorage Bicentennial Commission and the Anchorage Heritage Land Bank Commission.He earned a Bachelor of Arts Degree: English, at Colorado State University, a Master of Science Degree: Communications-Journalism at Murray State University and graduated from Utility Regulatory School for Commissioners at Michigan State University. He served as a Vice President for Communications and Public Affairs at Alaska Pacific University, taught bank marketing classes at the University of Alaska and was an English teacher at Los Alamos High School.Harbour served in ranks of Private - Captain during a 4-year assignment with the Army in Korea, Idaho, Georgia and Fort Meade and received the Meritorious Service Medal among other commendations.Harbour is also a past Chairman of the Alaska Council on Economic Education, the Alaska Oil & Gas Association Government Affairs Committee, the Anchorage Chamber of Commerce, the Export Council of Alaska and the Department of Commerce's District Export Council. He is a past President of the Alaska Press Club, American Bald Eagle Foundation, Consumer Energy Alliance-Alaska and Common Sense for Alaska.Harbour was instrumental in founding the American Bald Eagle Research Institute (UAS), the Alaska Support Industry Alliance, the Downtown Anchorage Business Partnership, and Arctic Power.He also served as CEO of several small Alaska organizations, including the Anchorage Parking Authority and Action Security, Inc. Harbour is also Chairman Emeritus of the Alaska Oil & Gas Congress.Harbour's wife, Nancy, is a professional, performing arts administrator and his three boys, Todd, Benjamin and William work in the fields of environmental management, energy marketing and medicine.
By |2018-04-25T07:09:56+00:00April 24th, 2018|Commentary, Interstate Gas, Reader Comment|0 Comments