Waiting, waiting...

Yukon watches, waits, hopes for pipeline

Yes, yes we do. It's not just the economic activity from the construction phase of EITHER major northern pipeline, either. It's the access to our own resources that we are looking to advance with these projects.

The Alaska Highway Pipeline will allow us to access gas in the Whitehorse trough. Conceivably, there's more than enough here to supply the Yukon itself (thus adding to the net supply from the pipeline, even after Yukon users take off gas for their own needs). Unfortunately, there's not quite enough to justify building our own line.

This article also mentions the 6bcf potential gas in the Eagle Plains field in the northern region of the territory. It would most likely ship out on a lateral that would run east to hook up with the Mackenzie Valley project. Hence, a green light for THAT project would likely stimulate activity here in the Yukon in fairly short order.

More JRP Irritation

http://www.winnipegfreepress.com/canada/prentice-irked-by-pipeline-reviews-rising-cost-delay-51207652.html

Kudos to Permafrost Media. The little-newsletter-that-could ponied up a $2,500 Access to Information request fee to find out that the Joint Review Panel has run up a whopping $18.6 million dollar budget (roughly triple the original estimate).

The link is to a Canwest piece on how Environment Minister Jim Prentice is eagerly awaiting the JRP's final report, even if he's "irked" at the length of time it has taken.

I have to admit, this refrain is so old that it's becoming tiresome. Yes, the JRP has taken its sweet time. Yes, they still seem to be on track for a December publication (especially now that Prentice is clearly keeping a close watch on the panel). No, they won't be publishing early (shades of Orson Welles: "We will publish no report before its time!").

Enough already. Let them finish in peace.

Palin's parting(?) shot may be in her own foot

http://www.washingtonpost.com/wp-dyn/content/article/2009/07/13/AR2009071302852.html

In this op-ed piece in the Washington Post, Sarah Palin attempts to shoot down Obama's plan for a "cap-and-trade" system for controlling carbon emissions.

It's frankly a lot of rhetoric, but for the solitary point that it would make electricity somewhat more expensive. Though that may well be true, such a system might actually benefit the US economy in the long run, not harm it.

Cap and trade benefits low greenhouse gas (GHG) emitters, by giving them the opportunity to sell offsets to higher emitters. It's a great concept, leading to a market-driven incentive for businesses to reduce emissions. One excellent way to reduce GHG is--guess what?--converting to natural gas! It's not too big a stretch to see cap-and-trade actually supporting the NG market, thereby improving the economics for the Alaska Highway pipeline.

I will assume that Palin actually wrote this piece herself, perhaps with some prompting from other figures in the GOP. Certainly, since she claimed to support cap-and-trade in her VP debate with Joe Biden last fall, it represents a change of position for her. Regardless, I wonder how carefully she actually considered the potential impact on her own state.

Governor Palin? Really?

I really hope we hear in the coming days why Alaska Governor Sarah Palin chose to step down this week, because the timing is at best puzzling.

Fair enough, she didn't want to be a "lame duck" for the rest of her term after announcing her decision not to run for reelection, but as AK State Rep John Harris noted to the Anchorage Daily News, she didn't have to announce that decision for another year.

Arguably, Palin was making political progress. She'd successfully upbraided David Letterman, forcing a public apology from the Late Night host after he'd made a couple of unfortunate jokes about her family, and, more significantly, she'd seen her AGIA agenda bolstered considerably last month with the announced agreement of Exxon to work on TCPL's gasline project.

I don't think it's overstating to say that Palin's abrupt resignation casts some slight doubt over AGIA. She has been the public face of AGIA, and the process remains controversial enough that another leader may be reluctant to step in. It's not that the process can be derailed, but without firm political will one can imagine it becoming weakened and subverted. To be fair, many critics claim that the Exxon/Mobil-TCPL agreement represents just that.

Speculation runs rampant about Palin's motivations. Her critics claim she's avoiding a corruption investigation surrounding a controversial recreation complex built when she was Wasilla's mayor. Her supporters hint she may be preparing for a run at the GOP Presidential nomination for 2012.

Inuvik Getting Antsy

http://www.nationalpost.com/story.html?id=1750698

Not bad piece on the general air of frustration around the construction delays on the Mackenzie Valley project, and how long it's taken for the Joint Review Panel to release its final report.

The JRP wasn't such a bad idea. Get representatives from stakeholder groups, have them listen to submissions from virtually everyone, and try to reach a consensus that may not make everyone happy, but would hopefully leave all concerned "equally unhappy".

Since there was no deadline, though, the process sprawled from the 10 months it was originally anticipated to take to almost 4 years. And that's assuming they actually make their proposed deadline of this coming December for their report's release.

What's done is done. Their work cannot be accelerated, apparently. Pius Rohlheiser from Imperial Oil offered his company's resources if the JRP needed any help, but that may have seemed too much like a conflict of interest. The big question is, will it matter?

Personally, I don't think so. There's been some benefit from this delay, believe it or not, and it might be just enough to get this project over the hump:

1. Construction costs have declined with the global recession. This project might actually be cheaper to build now.
2. The recession itself has made many people take a long, hard look at the abyss; a project that stimulates the economy and provides long-term revenue both for regional businesses and the GNWT (if only in the form of taxes) is more attractive now than it might have been a year ago.
3. Generally broader support for "green" initiatives makes this an easier project to support from a political point of view

There is one other argument, though, that requires a bit more of a leap of faith to overcome: what about those shales? Those massive deposits of NG uncovered in the American south and Northern BC?

In a perverse way, these, too might help the overall economics of the northern pipeline projects. Cheap, easy-to-reach NG will pull prices down, and stimulate demand (bear in mind that a lot of US's electricity generating capacity either is currently NG, or can be quickly converted). New, long-term demand will squeeze supply, and by the time these pipelines are completed, there will be lots of demande for them to serve.

North America will need the gas from the Mackenzie Valley and Alaska Highway pipelines. This is as true now as it was 20 years ago, and it will still be true 20 years from now.