Posted on 12/22/2005 1:33:10 PM PST by MeneMeneTekelUpharsin
JUNEAU, Alaska - An antitrust lawsuit filed against Exxon Mobil Corp. and BP PLC claims the two oil giants are restricting the nation's supply of natural gas and keeping prices at record highs. The lawsuit, filed Monday in U.S. District Court in Fairbanks, says the two companies acted together to eliminate competition for the exploration, development and marketing of natural gas from Alaska's North Slope to U.S. markets. "The only reason for them to collusively not to sell is to try to continue the scarcity that has driven natural gas prices to historic highs," said David Boies, the attorney for the Alaska Gasline Port Authority, which filed the lawsuit. BP and Exxon Mobil are two of Alaska's biggest oil and gas leaseholders, and are the operators for the North Slope's largest oil and gas fields, Prudhoe Bay and Point Thomson. Alaska's North Slope is estimated to have at least 35 trillion cubic feet (1 trillion cubic meters) of natural gas reserves, which could supply 7 percent to 10 percent of the nation's natural gas, Boies said. The January future contract for natural gas rose 41 cents Monday to settle at $14.04 per 1,000 cubic feet on the New York Mercantile Exchange. The gas contracts have reached record levels near $16 per 1,000 cubic feet in recent months. "I don't think anybody can tell you exactly how much the prices would decline, but it's clear it would decline substantially," Boies said. The federal lawsuit arose from the producers' refusal to sell supplies of natural gas to the port authority, which wants to build a pipeline from the North Slope to Valdez.
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Well, get out the popcorn...this could be a long and interesting scenario.
Hmmmm..,. Looks like the Attorney General of Alaska has more cajones than most all other politicians. I just received an email from a friend in California who had received their first gas and electric bill since the increase, totalling $503.00 for a normal size house. Good thing they haven't had the sub-freezing nights for two straight weeks like we have.
You better believe it is. It has affected the bills of those who use natural gas for home heating, kitchen, etc. and it has affected companies which use it to produce power in a very negative way. They made billions off of that and probable manipulation of recent gas prices and need to give billions back. Now.
It's not Alaska; it's the Port Authority. If anybody wants to know what is going on, they should see the distinction.
How are they supposed to deliver gas from the North Slope when there is no pipeline?
If true, why aren't criminal charges also being filed?
The Port Authority is merely one of the entities bidding on the pipeline construction, and one of the first losing bids this round.
Hell, if that's what they're saying in the lawsuit, I hope they also named the RATS and the RINOs who voted against drilling in ANWR.
This has nothing to do with ANWR. The Natural Gas Pipeline is much bigger than ANWR and has been around much longer, but is strangely unknown.
Calpine was the first pipeline bidder out of action this round. Their bid was a smokescreen anyway; they have no business in Alaska.
Sarc tag, dude. I forgot the sarc tag. :)
Let me get this straight. Exxon and BP hold leases that they have not developed to the satisfaction of Alaska and Alaska wants 'em developed.
Two questions:
1. What are the terms of these leases?
2. Why doesn't Alaska just make 'em an offer and buy the leases back? At the righ price, Exxon and BP will sell 'em. Then Alaska could do whatever Alaska wanted to do with 'em.
Of course, there's always a chance that I don't have the story straight. If that is the case, just ignore this post and read the next one.
Natural gas at a reasonable price is badly needed. I hope they win the lawsuit and make them get with it. Now.
The discovery well at Prudhoe was 1969. Prudhoe was blocked in court and the Fed Legislature for four years. Construction began seriously in 1974-5. It might be interesting to see the pipeline bridge over the Yukon River as it was built; there is room for four pipelines: two oil and two natural gas. There is still just the one pipeline, but every year since about 1980 the gas pipeline was just a couple years away. At $14 a thousand cu ft and the Canadian hookup just 700 miles away it would be difficult to keep pipeline bidders from offering, but BP and Exxon own the rights to the gas and have been reinjecting it at their own expense for thirty years. When natural gas was $2.50 not so long ago there was no way anybody would bid, but now, of course, they are trampling each other to get to the table. The gamble is: what will the price of the 35 trillion cu feet be over the fifty years of production beginning in ten years? My own crystal ball barely reaches dinnertime.
They must lose. The winning bid is in final negotiations and Conoco has already agreed to most of the contract; BP and Exxon are also close to agreeing. This is the real state contract negotiated by the Gov, not the Port Authority contract which is by a band of local politicians.
Port Authority is disqualified from bidding per the Stranded Gas Act unless they can get rights to some of the natural gas. They don't have enough net worth on their own.
Damn, I hold stock in both!
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