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Gold/Mining/Energy : Alaska Natural Gas Pipeline
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To: Dennis Roth who wrote (52)5/23/2005 5:18:27 PM
From: Snowshoe  Read Replies (1) of 570
 
>>BTW, did you see this article?<<

I read a similar article in the local paper.

>>This article suggests that the problem Agrium has is not contracting for gas but getting pipeline space.<<

I don't understand what's going on with the pipeline dispute, but the gas is supposedly "running out". Otherwise Enstar wouldn't be considering the import of LNG. Here's some background thoughts and observations:

1) Southcentral Alaska is a totally isolated market. We're like a mining colony on a distant planet, where ships dock regularly to drop off supplies and pick up our product. The market lacks the volume and maturity you see in the lower 48 states.

2) It's damn cold here! We're in deep trouble without an adequate supply of gas.

3) The local terrain is a rich and relatively unexplored source of gas and oil. Exploration/production costs are high, but there is plenty of gas available at the right price. The producers are trying to maximize their profits.

4) The consumers are trying to avoid extortion by the local producers. Enstar talks of importing LNG, Chugach Electric talks of putting up wind turbines, and others talk of piping in gas from Nenana or (eventually) the North Slope.

My conclusion is that it will all get resolved about a month before the gas supply runs low, and my gas bills will go up!
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