Check for our BOEMRE hearing story and photos to be uploaded soon!  If you did not comment on the proposed 2012-2017 leasing program, send your comments here before March 31.

NOT TO BE MISSED: Alaskans and Canadians finding themselves in Anchorage on Wednesday, will find much value in the Captain Cook Hotel luncheon forum on the Future of Alaska.  Moderated by Alaska radio personality Dan Fagan (NGP Photo) the panel features an impressive cast of Northern energy experts and observers.

 

ADN by Tim Bradner (NGP Photo)–It’s time for a talk with TransCanada Corp. about renegotiating at least parts of the state’s contract with the pipeline company. What seemed like a good idea three years ago doesn’t anymore. TransCanada has been a good partner with the state, however, and there might be a win-win solution. … There comes a time, though, when we have to think of Plan B. The in-state gas pipeline work now going on, involving a smaller pipeline to Southcentral Alaska, is a good framework for that.  This could involve TransCanada because the company knows how to build pipelines. The state should consider being an equity partner at least in proportion to its one-eighth royalty ownership share of the gas. The pipeline should be built large enough, at least to Interior Alaska, so that the section from the Interior to Alberta can be built when markets allow it.The pipeline to Southcentral should also be large enough to supply gas to utilities and new industrial customers such as, possibly, Sasol, a South African energy company that has been interested in bringing its proven gas-to-liquids, or GTL, process to Alaska. GTL makes high-value liquid products, like ultra-clean diesel and jet fuel, from natural gas.Sasol executives visited Alaska several years ago, but state officials gave them the cold shoulder because they were interested only in a pipeline. Rebuffed here, the company will now develop its first North American GTL plant in British Columbia, using gas from shale. But Sasol is still interested in Alaska, I’m told, despite the earlier snub.  This should be our Plan B. Renegotiate with TransCanada and make it our partner in a trans-Alaska pipeline. Recruit Sasol or another company with proven GTL capabilities to be the anchor industrial customer for a pipeline to southern Alaska.  Comment: We respect Bradner’s advice and agree that investors are now or very soon will be considering "Plan B" for disposition of ANS gas.  However, we would respectfully amend Bradner’s commentary, with his approval.  Any "Plan B" will not be "… our Plan B", for that thinking restricts alternatives to government projects.  Rather, we should be referring to "Investors’ Plan B".  Making sure we refer to a project as an investor project does not foreclose on a privately controlled project and still leaves flexibility for government support.  -dh

…more on Mackenzie Gas Pipeline CONDITIONAL approval.  Commentary: We note that as speculation focuses on investor conditions requiring Alaska legislative approval for an Alaska gas pipeline, so does the Mackenzie line find its approval burdened with 264 conditions.  The increased competiton from shale gas is an economic challenge for both northern gas pipelines.  So, conditions and shale gas pose common obstacles for Arctic gas projects.  Finally, we note that with the nuclear challenge now engulfing Japan — and the worldwide nuclear bias sure to emerge from the chaos — natural gas in its liquid form (LNG) will begin to attract premium prices.  Suddenly, those responsible for creating financial plans for Arctic gas projects will have to consider the increasingly attractive — but still horribly expensive and risky — alternatives of moving northern gas to tidewater for export to Japan and other countries desiring less dependence on the nuclear power production option.  One of the ‘new’ risks for LNG export will be the creditworthiness of purchasers in this increasingly, less predictable world.  -dh