Anyone on or off the Palin ping, write me.
Posted on 03/16/2009 4:45:49 AM PDT by thackney
Trans Canada Corp. faced new challenges to its proposed Alaska pipeline this week after two state legislators called for a review of the $26-billion US project's licence, leaving analysts and pipeline executives to question the underlying motives of the complaint.
On Thursday, Republican representatives Jay Ramras of Fairbanks and Craig Johnson of Anchorage introduced the resolution to the Alaska House, saying the motion was warranted because of risks for project financing during the global recession. If passed, Alaska Gov. Sarah Palin and the attorney general would have to review the application and present findings within six months.
TransCanada, which has completed nearly $4 billion US in financing toward the project, argued the current economic crisis and soft commodity prices had no bearing on a pipeline that would flow product in a decade.
"A change in the natural gas market price over the last six months does not swing whether or not this project is viable," Tony Palmer, head of TransCanada's Alaska project, told the Herald. "In the best case, we will be in service in the fall of 2018, and then we will be in service for 25 to 50 years beyond that. It's the price of natural gas at that time that is critical, not today's price."
TransCanada estimates it can bring the project in with natural gas prices at $3 US per million British thermal units or under with a good margin for producers and governments.
The company's plan includes an option to build a liquid natural gas line to Valdez port should the Asian LNG market prove more lucrative in a decade.
"At this point TransCanada does not know what the impetus behind the resolution is," Palmer said from Houston. "We, of course, will be responsive to the legislature if they wish to review it. But the fundamental premise that this project is not economic is not something that we accept, based on the facts that are out there in the marketplace today."
Natural gas prices have plummeted from record highs of around $13 US per million British thermal units last summer, settling at $3.932 per mmBTU Friday on the New York Mercantile Exchange. At the same time, global credit markets have dried up on the heels of billions of dollars in losses connected to the U. S. asset based commercial paper fiasco.
However, analysts expect natural gas prices to rise steadily post-2010 to $8 US or higher as world economies recover from the current recession and power demand grows in emerging countries such as India and the Middle East.
The future looks good for the pipeline, which has the support of Alaska's government and TransCanada's stated commitment to the system, which would stretch from the U. S. Arctic to Boundary Lake in northeast Alberta, said Steven Paget, an analyst at FirstEnergy Capital Corp.
"Over the long term we think gas is going higher, and that is positive for the potential of the pipeline," Paget said. "But there are competing sources of gas, and it will be up to companies and governments to see about making this source happen."
Last year, TransCanada received an exclusive licence through the Alaska gas Inducement Act to develop the pipeline system to ship North Slope natural gas to markets in the Lower 48 states.The 2,761-kilometre system is seen as a vehicle to jump-start natural gas output of an estimated 35 trillion cubic feet of gas from Prudhoe Bay, allowing commercial production from Alaska's North Slope at a time when the state's oil output is in decline.
Oil production from Alaska's North Slope has dropped to 740,000 barrels a day in 2007 from about two million in 1988, according to the Alaska Department of Revenue.
Part of TransCanada's licence included a commitment by Alaska to lock in a tax structure for 10 years following the pipeline's first open season, when shippers are invited to bid on pipeline space. The tax incentive is estimated to be worth about $500 million US.
The thorn for some detractors lies in Alaska legislation, which links oil and gas production in its tax structure thereby diluting revenues, Alaska Senator Bert Stedman said.
Stedman initiated a move this week to tax the fuels separately to protect the state's long-term income and offer producers some certainty as they decide whether to bid on pipeline space during the open season, according to local media.
Anyone on or off the Palin ping, write me.
Does someone know if these two are part of the “Old Guard” Republicans who want to take out Sarah?
Good question.
The same type that has fought energy self sufficiency at almost every turn for the past 40 years.
They are. If you want more info go to Conservatives4Pain blogspot. Interestingly, some of Sarah’s bitterest opponents are on the Republican Right, in the tank for Big Oil!
Then, add in those who have doubts because of the Palin Pipeline-Denali Pipeline stand-off.
BP and Conoco Phillips just announced that they will begin shipping natural gas down the Denali Pipeline in 2019.
Palin needs to find a bigger club to beat these Big Oil Bastards into submission.
Maybe she and the democrats can levy a property tax on Big Oil's reserves in Alaska?
The US is awash in committees, some good, some bad and some are just yes persons.
Does this "Council" have any credibility?
Its a yearly meeting of legislators from oil producing states and Canada. 26 from Alaska attended.
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