Blog: Dermot Cole
Mackenzie Valley pessimism
Published Monday, August 31, 2009
Low prices for natural gas are creating new pessimism about the proposed Mackenzie Valley natural gas pipeline, a venture that has been in the talking stages for about as long as its Alaska counterpart.
The Globe and Mail reports today about concerns that massive government subsidies may be needed to get it built. The paper also says that the oil companies are talking with the Canadian government about long-term tax policies.
Similar talks are probably going to have to take place with the state before an Alaska pipeline gets built, but Alaska leaders don't want to start before the "open seasons" conclude next year with conditional pledges by the companies to ship gas. The conditions are likely to include stipulations on long-term tax rates and other contentious issues.
The newspaper says:
Booming shale gas production and increased global supplies of liquefied natural gas have swamped the recession-dampened market, driving prices to seven-year lows.
Pipeline proponents led by Imperial Oil Ltd. (Exxon subsidiary) say they are undeterred by short-term conditions, and remain committed to the pipeline.
Still, the stunning development of huge shale gas deposits further undermines the case for the Mackenzie project, which was already seen as vulnerable to competition from LNG and gas from Alaska. Mackenzie would deliver 1.2-billion cubic feet per day at a cost of $16-billion – roughly a quarter of the Alaska's project capacity but at half the cost.
“For this thing to go, the government is going to have to step forward with great wads of cash – many billions of dollars,” said Simon Mauger, manager of gas services for Calgary-based Ziff Energy Group.
“No cash up front, no deal, no pipeline.”
Ottawa is now negotiating with the partners – which include APG, Imperial Oil, ConocoPhillips Co., Royal Dutch Shell PLC, and Imperial's U.S. parent, Exxon Mobil Corp. – on a fiscal framework that would include federal support for required infrastructure, such as highways and wharves on the river, and attractive tax benefits.
Northerners were looking to Prime Minister Stephen Harper's recent trip to the territories for a signal of Ottawa's commitment to ensuring the project proceeds after the long-delayed report from a joint review panel is delivered at the end of this year. Instead, Mr. Harper gave it scant mention, even as he touted his government's commitment to northern development.
We need to develop gas for use in alaska and develop industries here and forget about letting the big oil crooks
bleed us dry for pennies of the real worth of our recourses.
Once again we see the impact of shale gas. No gasline will ever be built to carry North Slope gas to America. The Canadian, Kitimat LNG, project pulls gas from a source much closer to the Lower 48- the Western Sedimentary Basin. It is not possible to amortize the cost of a mega gasline from the North Slope to carry gas that far, not when gas is already closer to the Lower 48 markets.
What is really being planned is a gasline from Alaska to tie into the McKenzie gasline so the tar sands in Alberta can be cooked. The most destructive development in North America. http://oilsandstruth.org/
But this is so dirty that a propaganda campaign was started by the Palin Administration that cheered the idea of taking Alaska's gas to "...start flowing into hungry energy markets across America."
The problem for Alaska is that the goals of ExxonMobil and British Petro are diametrically opposed to Alaska's need to sell natural gas for as much as possible. Big Oil wants cheap gas to fuel the tar sands destruction. The cheaper the better.
The only chance Alaska has to sell its gas for maximum value is to export it the the West Coast of the US, Hawaii, and the premium world markets.
That means the horrible deal with TransCanada must be scuttled ASAP and Alaska legislators stop living in the fantasy world that Big Oil is looking out for Alaska's Interests.
FYI- the Henry Hub price of gas today is: $2.50
Meanwhile, oil-based LNG spot prices in Asia have recently hovered around $12/MMBtu, according to Lauren O'Neil Natural Gas Week, Energy Intelligence Group.
The only way the politicians k
Cut off:
The only was the politicians know how you feel is if they hear from you. Your silence is your consent.
How did I guess (without looking at the comments) that the AGPA treasurer would have multiple comments?
Psychic I guess
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