AK State Gov Hedges its Bets

Alaskajournal.com

The state of Alaska has filed applications to build a “bullet” line from the North Slope down to southern markets.

In light of dwindling supplies in Cook Inlet, the state is in a position of needing to secure a supply from somewhere.  If a larger pipe isn’t built (i.e. the TCAlaska or Denali projects), Anchorage and the Kenai Peninsula needs to get a secure supply of gas, and soon.

The biggest question posed by this application is: if such a line is necessary, which route should it follow?  The line could go south and then southeast to Fairbanks, continue southeast to Delta Junction, then southwest along the Glennallen Highway to Anchorage.  This is a bit of a circuitous route, and crosses some of the most treacherous mountain ranges in North America, but the alternative has some, um, issues.

Alternatively, the pipeline could head essentially straight south, connecting to the Parks Highway southwest of Fairbanks, and follow that south through the Mat-Su region into Anchorage.  LOTS of advantages to this one; gas from this pipe could feed a few coal-fired power plants along the way, and the Mat-Su region (including Wasilla, for instance) is chock-a-block full of potential customers.  It’s a shorter route, and doesn’t have to cross the same kinds of mountains the Glennallen route would.  While it would pass west of Fairbanks, it would also pass through Denali Park.

Tough call.  I really hope it turns out to be unnecessary.

Inuvik businesses hit by MGM Energy's drilling delay

CBC.CA

This item describes some of the local economic consequences of MGM Energy's decision to halt its gas exploration program for this year.

I'm of two minds on this item. First, companies can't be expected to sink money into projects that may never produce revenue. MGM can decide where to invest its resources, and considering that they're far smaller than the major producers, they may even have to be a little more careful.

The timing does seem a little interesting, though, when you consider that we'll be seeing the JRP's report in a few months (and maybe even a leak or two before then? We can only hope). One might consider MGM's announcement--and the subsequent economic consequences for the region--to be something of a forewarning of potential longer-term consequences.

Bottom line, though, is that even if there is something of a political motive behind MGM's decision not to drill this winter, they're well within their rights to make that decision.

NWT Minister: Both Lines Still Needed

Reuters

Yes, the Alaska Oil and Gas Congress was held in Anchorage this week, but I saw little actual “news” arising from it. Important, to be sure, and it’s great to see various players getting together to compare notes, but there were no significant announcements per se.

The NWT Commissioner for Industry, Tourism, and Investment made some statements that basically came down to: “We need both lines, and we wish the Canadian government was providing our project with the same support that the American government is giving to the Alaska line.” Heavily paraphrased, to be sure, but that’s the gist of it.

Hardly news, but that doesn’t keep it from being a worthwhile sentiment.

FERC reports on Northern Pipeline activity. Says there actually is some.

http://www.ogj.com/index/article-display/3837498141/s-articles/s-oil-gas-journal/s-transportation-2/s-pipelines/s-2009/s-09/s-ferc-expects_alaska.html

Wow.

The US Federal Energy Regulatory Commission submitted its report to lawmakers with an impressive summary of both the Denali and TransCanada projects so far. And according to FERC, there actually is some.

At this point, both projects are actively engaged in "pre-filing" activities, both preparing for their open seasons next year.

The item is really worth reading. I hadn't realized, for instance, that TC's project is planned to deliver 5bcf per day, while Denali is only proposing 4bcf...

Denali: "Hello? We're still here..."

Source: CBC.ca

Not a huge item, really. I had to chase someone down at CBC to get them to actually post it on the website after the initial item appeared on Radio One yesterday, but it's significant in its way. For one thing, it's the first field work that I'm aware of for the Denali project in the Yukon.

For another, it's at least a small indicator that Denali is committed to soldier on at least to the point of holding an open season next year.

I am kind of amused that they refute TCPL's right of way through the Yukon with a simple "not so" (the matter is currently before the Supreme Court of Canada, though God only knows when they'll rule), but it's still nice to see them spending money here...

More Mackenzie "Positioning"

http://www.upstreamonline.com/live/article187034.ece

Essentially just about how the Mackenzie Valley line proponents would like to see more support from the Canadian government, particularly in the way of negotiating favorable financial terms.

There is a good point, and it's been raised before, in that the US government has provided upwards of $30 billion in loan guarantees to get an Alaska line off the ground, and our own government has so far held back.

Sadly, at this juncture it's likely a prudent thing to do, since we don't know as of yet just what the Joint Review Panel is going to recommend. That report will likely have a big impact on costs, and we probably all need to know where the producers stand before we know how many tax dollars will be required to support the project.