7-13-09 (Weekend and Monday News & Comment).   PNACook Inlet Region Inc. said June 30 that it has received key permits for a proposed wind farm on Fire Island near Anchorage.  The U.S. Army Corps of Engineers has approved permit applications for Wind Energy Alaska’s Fire Island wind farm and related electricity transmission infrastructure and the project is on track for startup in 2011, CIRI said in a statement.  The wind farm will provide commercial-scale renewable power in Southcentral Alaska.  (Comment:  This little wind project will be a historic diversification of energy supply for South Central Alaska.  We refer to it in this gas pipeline web page because of the extremely interesting focus it places on Regulatory Commission of Alaska (RCA) decision making re: natural gas and electricity projects.  The RCA has broad powers under AS 42.05 to consider electric utility power sales agreements and gas utility supply agreements.  In late 2006 the RCA rejected a contract presented to it by Enstar, for Marathon-supplied gas through 2016.  Had that contract been approved, South Central consumers would likely have enjoyed both lower gas prices than they will be paying and a more secure supply.  But the RCA majority departed from a 2001 Commission precedent and rejected the 2006 contract.  I first dissented from the majority on its fundamental decision and dissented again when the majority of commissioners rejected a petition for reconsideration.  In my dissents, the bad outcomes I projected are pretty much evolving.  On 2-23-09, in a speech to the International Association of Energy Economics, and on 12-9-08 in another to the International Law Seminars Energy Symposium, I summarized the unavoidable, negative effects of too much regulatory interference with natural gas supply contracts.  Today one might further wonder that if the RCA could reject the price per energy unit presented in the proposed 2006 Enstar contract–jeopardizing citizen gas supply as early as this winter–how could it with consistency approve an alternative energy supply source that may be more expensive?  How could it approve a North Slope gas supply from a bullet or spur line that could be more expensive that that 2006 Marathon contract it disapproved?  I suspect that if the matter of a sale of wind-generated electric power from CIRI to Chugach Electric Association or other Southcentral electric utilities comes before the RCA, proponents will argue, "Well, spending more per British Thermal Unit for Fire Island wind power is worth more to consumers than spending less for natural gas for Enstar because wind is ‘clean’ energy, the ‘favored’ fuel of the future, and it helps us diversify our energy sources."  At least, that’s what I might try to argue if I were CIRI, dodging various logic-created traps along the way.  But I truly think that ratepayers would vote–were they given the vote–to have more Beluga plant-supplied electricity powered by natural gas than electricity powered by Fire-Island wind unless the wind source were cheaper.  But that would require an electric company to obtain gas with RCA approval when RCA has not been willing to approve contracts in the last half-dozen years that might have represented a price higher than the weighted average of existing gas sources.  On 1-9-09 CIRI’s highly articulate Wind Energy Alaska project manager, Ethan Schutt (NGP Photo), addressed the International Association of Energy Economists.  He described the project and various regulatory challenges with the FAA and Corps of Engineers.  He noted that final permitting and power supply agreements should be completed this year with construction and commissioning to occur next year.  The PNA story suggests CIRI and its Wind Energy Alaska partner, EnXco, have competently executed their plan so far.  So this story is good news, but goes to show that all of these energy projects are related in small or big ways.  The best way to have them all thrive and benefit ratepayers is to let the private market control the outcomes and choose ‘winners’ and ‘losers” whenever possible; otherwise, consumers will inevitably lose.  After all, Alaskans know better than most that bureaucratic manipulation of the free enterprise system has produced mostly failed results over the years.  We must also hope that the RCA will re-embrace its 2001 Unocal gas supply agreement (GSA) position that, "The GSA is a commercially negotiated agreement.  We will not speculate whether a better agreement could have been obtained by ENSTAR, with Unocal or with another potential supplier" (RCA Order U-01-7(8) at 4).   -dh     *     ADNWhen he takes over for Gov. Sarah Palin, Lt. Gov. Sean Parnell (NGP Photo, 5-09 with newly reappointed AOGCC Commissioner John Norman – left) faces a tough but manageable assignment. Tops on his to-do list: follow through on Gov. Palin’s progress toward a natural gas pipeline, sharpen the focus of state energy policy, build a sustainable budget despite declining oil revenues and stake out some initiatives of his own in fields like domestic violence and health care.     *   Forbes.   Gov. Sarah Palin’s unexpected midterm departure should not affect the project she touted as one of her primary successes, a massive natural gas pipeline, according to state lawmakers and sources in the industry.

    *   FNM and AP, by Dan Joling.  "This project will be successful depending on the economy of building it, the fiscal certainty associated with it and the gas markets," said Marilyn Crockett (NGP Photo with author, 6-08) executive director of the Alaska Oil and Gas Association.   … Former House Speaker John Harris, R-Valdez, said the state process for encouraging a pipeline can continue without Palin.  "I don’t think it will make any difference," said Harris, who will challenge Palin’s successor, Lt. Gov. Parnell, for the Republican gubernatorial nomination in 2010.  Spokesmen for two pipeline proposals said they will continue preliminary work with an eye to seeking commitments from producers for pipeline space next year.  "Our plans haven’t changed," said Tony Palmer, TransCanada’s vice president of Alaska development.  "We remain on track to hold our open season next year," said Dave MacDowell, spokesman for Denali-The Alaska Gas Pipeline. "Everything we’re doing is focused on that important milestone."  … State department of Natural Resources Commissioner Tom Irwin (NGP Photo, 6-09) said Palin provided good leadership to get a project to this point. Alaska has major producer interested in the state’s abundance of cleaner energy that will reduce America’s dependence on foreign oil with a structure that will encourage more exploration.      *      ADN by Elizabeth BlueminkJust as the prospects for the Alaska gas line seem to be growing brighter, new drilling techniques have unlocked vast pools of natural gas all over the Lower 48, from Texas to Pennsylvania. For now, demand isn’t keeping up. Prices have swooned and drill rigs are idling.      *     CBC NewsSomeone deliberately set the explosion that damaged another EnCana gas pipeline in northeastern B.C. early Wednesday morning, RCMP investigators say.

7-10-09.  Calgary Herald by Dan HealingCanada’s future is intertwined with development of northern Alberta’s oilsands, then-prime minister Jean Chretien said, as he helped announce more than $5 billion in new and previously pending oilsands projects.  "`It’s fantastic because we have more oil here than in Saudi Arabia. So for the security of the nation, it’s something,” Chretien told 1,800 community residents, oil industry representatives and politicians packed into the local curling rink.       *     Robert Steven Duncan (EIA)In 2006, Canada produced 19.3 quadrillion British Thermal Units (Btu) of total energy, the fifth-largest amount in the world. Since 1980, Canada’s total energy production has increased by 87 percent, while its total energy consumption has increased by only 44 percent.  Almost all of Canada’s energy exports go to the United States, making it the largest source of U.S. energy imports.