Let’s look carefully at gas line possibilities
October 24, 2011
Although Tim’s opinion piece below deals primarily with oil and gas development, I wanted to share it to show how the government is already involved in directing our energy development. Some argue that renewable energy should stand on its own, that if it’s such a good deal it should not need subsidies. The reality is that we have for a long time and currently do subsidize fossil fuel development to the tune of hundreds of millions of dollars in the examples cited by Tim. I’m not saying this as a case against fossil fuel subsidies for Alaska’s small market. But to say that when we talk about what energy supplies we should use in the future, we need to talk honestly about how the market is operated and make fair apples-to-apples comparisons.
By TIM BRADNER in the Anchorage Daily News: It’s easy to be confused by all the gas pipelines being worked on. There’s a logic to the work being done, however. At this point it’s all about developing options, which is prudent. However, we’d better take a really deep breath before we decide to actually build something, if it involves public dollars.
One project is the big 1,700-mile, 48-inch pipeline from the North Slope to Alberta, which is in an engineering phase. TransCanada Corp. and Exxon Mobil Corp. are involved, both large, competent companies that know what they’re doing. However, with all the shale gas in the Lower 48, this project doesn’t look very good for now. But who knows what things will look like in 20 to 30 years?
If this is built, a smaller “spur” pipeline could branch off at Delta to bring gas 300 miles to Southcentral Alaska via Glennallen. The Alaska Natural Gas Development Corp., or ANGDA, a state authority, has done work on this.
If the big pipeline doesn’t go, engineering is under way on a fallback plan, a separate, stand-alone 24-inch pipeline from the slope to Southcentral Alaska, the so-called “bullet line.” This is being pursued by another state corporation, the Alaska Gas Development Corp., or AGDC. The bullet line would be 737 miles in length and would cost about $7.5 billion.
The people working on this are getting good marks for the work they’re doing. There is criticism that the political sideboards on the project, mainly a restriction on the amount of gas that can be shipped because of the state’s contract with TransCanada, could cripple its economics.
Finally, there is a 800-mile pipeline from the slope to Valdez, parallel to the trans-Alaska oil pipeline, that could serve a possible natural gas liquefaction, or LNG, plant. This is promoted by the Alaska Gasline Port Authority, or AGPA. The port authority was formed by municipalities and is not a state corporation. Substantial sums have been spent on this by Yukon Pacific Corp. and others.
With LNG prices in Asia at high levels, it is getting more attention.
Of all these, the only project being led by the private sector is the large 48-inch pipeline by TransCanada Corp. and Exxon Mobil Corp. The port authority has a relationship with Japan’s Mitsubishi Corp. and Sempra Energy, a U.S. firm, both interested in LNG, but the nature of these relationships is confidential.
The state has financed work on three of the four initiatives: the 48-inch pipeline to Alberta, the spur line via Glennallen and now the separate 24-inch pipeline from the slope to Southcentral. About a billion dollars will have been spent among all these.
Other ideas have been proposed. Gas-to-liquids (GTL) is being increasingly looked at as a fallback in case all of the pipeline projects fail, or even in addition to a pipeline. A gas-to-liquids plant on the North Slope would get more fluids moving through the trans-Alaska oil pipeline, which is badly needed. A GTL plant in Southcentral Alaska would be a big industrial customer for a spur line or bullet line, which is absolutely necessary for the bullet line and helpful to a spur line.
The important thing about GTL is that it makes high-value liquid products, like diesel and jet fuel, and would sell into markets for these fuels, not LNG or natural gas markets.
To complicate things further, work is also starting on the large Watana hydro project. A $67 million commitment this year could lead to multibillion-dollar outlays by the state in just a few years. Read more