Alaska's gas market is Asia, not North America

Anchorage Daily News ^ | November 17th, 2011 | BILL WALKER

[thackney]

Governor Parnell recently acknowledged that due to shale gas developments Alaska must change course and export its gas to the premium Asian markets. Owners of Lower 48 and West Coast Canadian liquefied natural gas (LNG) receiving terminals are likewise accepting market realities and converting their LNG receiving facilities into export terminals.

Consequently, Parnell now agrees that it is time for Alaska to build a gasline to tidewater to export LNG to Asia.

While the Governor's laudable change of position was met with widespread support among Alaskans, close on its heels came the thudding response from TransCanada CEO Russ Girling. Girling said TransCanada would continue to focus on a Canadian project and that the North Slope leaseholders, not the State of Alaska as the resource owner, are in the driver's seat to decide when and how Alaska's gas will go to market.

Girling's comments sounded all too similar to those made by his predecessor, Hal Kvisle, the week after the award of the $500 million AGIA license to TransCanada in 2008. Kvisle pronounced what some have called the AGIA project motto, "Nothing goes ahead unless Exxon is happy with it."

The primary purpose of AGIA was to take the ironclad control of Alaska gasline development away from the leaseholders who have repeatedly stated they will not allow a project to go forward until Alaskans make significant, and irrevocable concessions on oil and gas taxes.

Yet shortly after the AGIA contract was awarded, Exxon Mobil partnered with TransCanada to become a primary beneficiary of the $500 million AGIA license dollars.

[US Navy Vet]

Making Alaska and Hawaii States was a BIG mustake!

[boomop1]

I thought this was always the market.

[television is just wrong]

USA oil is shipped to Japan.

[thackney]

Not if we had actually used it for the resources as originally planned instead of trying to make the world’s largest park system.

[thackney]

No it is not.

There was a short period from 1995 to 1999 when a glut of oil on the west coast, about 5.5% of Alaskan oil was sent overseas. But that ended quite a long time ago.

[Ole Okie]

LNG has been shipped from Kenai plant (Cook Inlet, Alaska) to Tokyo since 1969.

[thackney]

Sarah Palin’s administration made a $500 million dollar government give-away for a Pipeline study/plan to run through Canada and tie into the lower 48 pipeline systems.

[proxy_user]

Since the oil market is worldwide and there is one price, it doesn’t make any difference. The net amount we spend on foreign oil is exactly the same as if we used this Alaskan oil ourselves.

[humblegunner]

Alaska's gas market is Asia, not North America

PDS troll!

[thackney]

Yep, a tiny little plant that is being (has been?) shut down.

[thackney]

Since the oil market is worldwide and there is one price

There is not one price. Oil varies in price for location and for quality.

F.O.B. Costs of Imported Crude Oil for Selected Crude Streams
http://www.eia.gov/dnav/pet/pet_pri_imc2_k_a.htm

[thackney]

The net amount we spend on foreign oil is exactly the same as if we used this Alaskan oil ourselves.

We do use this oil ourselves.

I guess people who believe this Alaska Oil to Japan myth have never looked at a map.

It is 3,577 miles from Valdez, Alaska to Tokyo, Japan.

It is 1,274 miles from Valdez, Alaska to Anacortes, Washington. (largest Washington refineries)

It is 2,253 miles from Valdez, Alaska to El Segundo, California (major refinery near Los Angeles)

It cost money to ship oil on a tanker. It cost more money to travel farther distances. Buyers don't care how far you shipped it. Shipping extra distance cuts into the seller's profit.

[org.whodat]

It was, they just lied about it.

[bgill]

All those cattle that were sold at rock bottom prices in drought ridden states didn't end up as loss leader ads in American grocery circulars. They were shipped to China.

[org.whodat]

That is what I said about all this BS about the tar sands oil, it is shorter to pipe it west than to texas. And they can run it beside the railroad. It would not effect the world market other than in supply and demand.

[thackney]

Yes, if you oversupply a market for a given time in an area, you will drive your price down low enough it becomes economical to ship it to other areas.

That is what happened on the west coast during 1995~99 for oil. Look what happened to the Alaskan oil price at that time. Most people have no understanding how much that market fell at that time.

Click the picture for the data. The average price for Jan 1999 was about $5.

[thackney]

Building a pipeline across the Rocky Mountains become a significantly higher expense than more distance across a flat prairie. And lifting the oil thousands of feet takes more horsepower than pumping many extra miles.

Not to mention the overwhelming expense and red tape of trying to build pipeline into California as Oregon and Washington don't need that many additional barrels of oil.

[ckilmer]

The lower 48 is glutted with 100 year supply of natural gas. No need for Alaska’s natural gas.

The proper move for Alaska is to export to Asia. Especially Japan where markets are closer;

those exports work onto US current accounts as US exports & lower net US imports of oil/gas.

[thackney]

It won’t be long until we see the lower 48 as a net exporter of natural gas as well.

Some of the LNG export terminals have received an export license.