Folks in Alaska are finally starting to notice the huge oversupply of natural gas in the lower 48. If/when the gasline push fails, there will be recriminations about the incentive money being paid to Trans-Canada...
Report suggests gasline would face bleak prospect -
MARKET SATURATED: Fairbanks task force cites reduced demand.
adn.com
By WESLEY LOY
wloy@adn.com
Published: February 6th, 2009 01:33 AM
Last Modified: February 6th, 2009 01:33 AM
New gas supplies in the Lower 48 could negate the need for Alaska gas until after 2030, a report from a Fairbanks group says.
The report from a task force of the Interior Issues Council questions why owners of North Slope gas would commit to finance a multibillion-dollar pipeline and sell their gas into a "saturated market" in the Lower 48.
The 59-page report also questions the viability of various proposals to pipe or truck gas to local users in Fairbanks, the Anchorage area or elsewhere.
"Each of the in-state gas distribution proposals reviewed by the task force faces challenges and do not, as stand-alone enterprises, appear to satisfy Alaskans' energy timeliness and affordability requirements," the study says.
The report raises doubts about whether a major pipeline to carry North Slope gas to the Lower 48 and branch lines to supply local users can be achieved anytime soon.
The Interior Issues Council describes itself as a public policy think tank that formed the task force of mostly Fairbanks community members to research and write the report titled "In-State Gas Pipeline Supply Options Study."
Frank Abegg, a former manager for Golden Valley Electric Association, the Fairbanks power utility, chaired the task force.
Jomo Stewart, energy project manager at the Fairbanks Economic Development Corp., said he personally did much of the research on the Lower 48 gas supply picture.
He said he found that the nation is developing potentially huge supplies of "unconventional" gas from such sources as shale deposits. The country also has the capacity to import enormous volumes of liquefied natural gas or LNG.
A BP gas marketing executive and a top energy market analyst offered similar observations about these new supplies, along with weakening gas prices, at an industry conference last month in Anchorage.
Relying on data from Exxon Mobil Corp., Stewart said it appears the Lower 48 could have enough gas to meet demand through 2030.
That calls into question the notion that a major North Slope gas pipeline to the Lower 48 could be up and running by 2018 as proposed, Stewart said.
TransCanada Corp. and Denali, a partnership of BP and Conoco Phillips, are working on competing pipeline projects.
Spokesmen for TransCanada, based in Calgary, could not be reached for comment late Thursday.
Dave MacDowell, spokesman for Anchorage-based Denali, said the conclusions of the Fairbanks report are debatable.
"Denali's owners both have long-term perspectives, and it is far too soon to tell if unconventional gas resources have staying power, especially over a 20- or 30-year time horizon," MacDowell said.
He said Denali's focus is to develop a solid pipeline cost estimate so that gas producers can know the risks in pledging to pay fees over many years to ship gas through the pipeline.
Denali plans to invite shippers to make such commitments starting next year, and "our 2009 work program will be almost three times as big as our 2008 program, on which we spent $55 million," MacDowell said. |
