Arctic gas lines: Adversaries or teammates?

Arctic gas lines: Adversaries or teammates?: Alaska Dispatch, January 13, 2010

Not a bad piece, though the title's a bit misleading; one expects some comparison/contrast between the projects, and there really isn't any save for the mention that the Mackenzie line is far further along in the regulatory process than the Alaska line.

The article quotes Jack Weixel from Bentek Energy as speculating that "Alberta may actually end up needing the gas more than the lower 48..." because of declining conventional reserves there. This is a significant point that relates to both the Mackenzie Valley and Alaska Highway gasline projects: conventional gas reserves are declining all over North America. This, at a time when prices are low and there is a strong political push to move industry to natural gas as a fuel source in place of petroleum oil or coal.

"But, of course, there's all that shale gas..." is the argument there, but we need to avoid taking that for granted. Shale is absolutely going to be an important source of gas, but there are some significant questions about it, too, both environmental and economical (shale is still uneconomical for prices below $8/MMcf and significant questions remain around groundwater and ultimate well production life).

If either project were completed and running today, it would be uneconomical. This piece suggests that neither would be economical in the next 5 years, either, but since neither one could come onstream before that, the point is moot. In fact, when either project is announced, energy consumers throughout North America will make their long-range plans accordingly.