If you are one of the “unfortunate” that takes it upon his or herself to follow what is occurring in this state by the so-called “Think Tanks” and legislators, with respect to the feasibility upon an in-state “Natural Gas Pipeline”, it is a mind boggling proposition. It will give one a headache, a toothache, a bellyache and suck the living life out of any righteous citizen engaged in just trying to sift out what is really going on - which means a whole lot of state loot is going wasted on “fluff” legislation and martini lunches. Wasn't that banned? Dementia may also play in as a factor with the bureaucracy faction – selective forgetfulness. In fact, if there was a map depicting all the scenarios and all the different routes now on the drawing boards meant to deliver low cost gas to a neighborhood near you, it would make this state no longer appear as the “Last Frontier” but the “Lost Frontier”. Please Lord, just one that works. And today we hear of continued interest in a gas pipeline from Southcentral to the Interior? Talk about one step forward and three steps back, as this is indeed a Dueling Banjos' “backward” proposition! Here it is in a nutshell. All the proposed lines so-far but one will take incentives, which in layman's language equates to subsidies which renders down to giving away the hen-house. Sure any one of the proposed pipelines may provide “cheaper” energy, but when the lose factor through subsidies challenges the savings, we end up paying a whole lot more for less. And when subsidies are required, that money takes away from other needs and requirements for a government funded by resource development, like what we could have acquired through our PFD dividends. My take on Alaskan natural gas and what is going on with “zero” transparency behind closed doors. And you thought Frank and Sarah were bad, think twice. A brilliant ARCO CEO once said it well. Take a Coleman stove up North to Prudhoe Bay, hook it up to a well, and one can have boiling water in no time flat. See, natural gas is “marketable” out of the ground. It is very unlike “crude oil”, which is a nasty smelling liquid laced with cancer causing constituents - BETX - that must be manipulated in order for it to become marketable. So along the way, there exists many accounting manipulations, suspicious ways and means to add a few pennies here and a few pennies there before it gets to the refiners. That is why it is called the “Black Gold”. By the time Alaskan crude makes it to the cracking tower and made into motor gasoline, it can easily see increases of 400% above and beyond the well-head price. With “Natural Gas”, the manipulation is very difficult if not close to impossible - one of the main reasons this state is yet to see a “natural gas pipeline” heading south from Prudhoe Bay. ConocoPhillips and BP and EXXON, these are “Oil Companies”, not “natural gas” retailers. So when we hear of legislators making laws that will provide for a state run corporation with permission to with-hold data in a state built on an “open records” forum, an “Alaskan” corporation designed to build “us” an in-state natural gas delivery pipeline with no regulation like Mike Chenaults' HB9 insists, it is a ways and means for the “lobby” to find those manipulating loopholes so we never really know how much we are loosing out what is essentially ours to begin with – the resources! Headache Bill HB9 gives the Alaska Gasline Development Corporation, a subsidiary of the Alaska Housing and Finance Corporation, permission to spend over $7-Billion for something not yet determined. Layers of bureaucracy allow these so-called “Alaskan Corporations” to exist without ever showing a profit. In fact, name one entity under the “Alaskan Corporation” umbrella that would make it in the “real” investment and business world? And like another confidant of mine said when discussing revision number 5000 to this state’s gas pipeline “blind” initiative, “Why build a pipeline when career makers can just think of building one, as when the pipe finally enters the trench and the gas flows, the do nothing jobs go away.” There is a lot said about this with respect to what, or what is not going on with our representation down in Juneau. Remember, it is our gas, our resource, by virtue of one's citizenship this state. So the chaos and friction and out-of-control legislation that wants to incite within the public the possibility “once again” of that pie-in-the-sky pipeline, it is all fluff and wasting not only money, but time! Look, we have lost out in the race to supply other nations with “low cost” natural gas. But there exists a bigger problem looming on the horizon, to which I invite your help. Most of the “natural gas pipeline” proposals are shooting for the “Big Pipeline”, which means a pipeline that entertains an export scenario. And true, a “Big Pipeline” means more jobs and more income, through royalties garnished by selling the gas – to reiterate, the citizens’ gas! Sidebar: This state's greatest “Hard Aground” was not the EXXON Valdez hitting Bligh Reef on a moonlit night, the biggest wreck came about in the early 70's as a big mistake when the legislators called for only a 12.5% royalty on Alaska's oil shipped down the 800-mile long Trans-Alaska-Pipeline. That number, a meager 12.5% is what is found in text-books – for study only! In California, wherein the legislators look after the “citizens” well-being, that “royalty” number pushes upwards to 50%. Which is a win-on-win for both the resource owner and the developer, half and half is a “goodwill” partnership. This state blew it back then and we the people have suffered the consequences for way too long by now, some 30 plus years. We do not want to make that mistake again, with the “natural gas” commodity. Now as far as that North to South pipeline engaging in providing “low cost” gas to Alaskans, well that is a little piece of the pie, and may never come to fruition. Yes, there exists the possibility that a giant sized line will traverse Fairbanks and not be allowed a spigot for taking gas to consumers! It is very confusing, the rules and regulations that may follow this “beast of burden” natural gas pipeline. And believe me, whatever comes about, it will be not in the best interest of the citizens! The “Big Pipeline” proposers focus on filling the state coffers with pennies on the dollar value of the gas and not at all interested in what happens along the way. Herein is where a nightmare is becoming a reality. Right now, and not made mention by anybody collecting a state salary and working to make a pipeline reality nothing more than just a career, it is the fact that there exists an “Export Ban” on any and all North Slope natural gas. In my correspondence with Larry Persily, the Federal Natural Gas Pipeline Coordinator this concern, he acknowledged this fact and made it clear that the sitting President – Barack Obama – has not been approached, as it is his call to lift the existing “ban”. According to Persily, to premature at this point in time, due the fact we are still in the dream stage. In fact, here is his correspondence with me upon my concern the existing ban:
From: "Larry Persily"
Date: Sun Nov 13 11:35:36 AKST 2011
Subject: RE: Alaska Natural Gas "Export Limitations"
Dear John & Jane Doe
I have not spoken with the White House or members of the Alaska congressional delegation about the export limitation, though I have asked our staff to research the history of the law and how it might be applied today. In addition to this provision, there is a second, more general provision in federal law that requires Department of Energy approval of an export license in order to ship U.S. natural gas overseas. Alaskans are familiar with this process, which was required for ConocoPhillips/Marathon to export liquefied natural gas from the Nikiski terminal for decades. I do not believe this really becomes an issue until a company or partnership of companies stands up and actually proposes a new export project from Alaska. Currently, all we have is the governor and others stating that an export project might be a better option. I know the companies are considering an export project, and I expect if it ever becomes the preferred option for the companies they would certainly investigate the likelihood of winning federal approval for an export license. It's usually easier to follow the law as opposed to battling in Congress to change it. At that time, if the state wants to seek a change in federal law, I am sure our office would assist them in that endeavor. It's just a little early to go try changing federal law to accommodate a project that is still in the maybe or possibly stage.
To: Larry Persily/Federal Coordinator
Alaska Natural Gas Transportation Project.
Dear Mr. Persily;
Now that Alaska's Governor Sean Parnell is trying to find an interest for Alaska's North Slope natural gas upon foreign markets, what does the "Export Limitation" clause of the "Alaskan Natural Gas Transportation Act" mean for "Exports" if requirements of any future contracts are greater than the now set limit of 1,000 Mcf/Day? As you may be well aware, the law as it stands reads:
15 U.S.C. § 719j: Export limitations
"Any exports of Alaska natural gas shall be subject to the requirements of the Natural Gas Act [15 U.S.C. 717 et seq.] and section 103 of the Energy Policy and Conservation Act [42 U.S.C.6212], except that in addition to the requirements of such Acts,before any Alaska natural gas in excess of 1,000 Mcf per day may be exported to any nation other than Canada or Mexico, the President must make and publish an express finding that such exports will not diminish the total quantity or quality nor increase the total price of energy available to the United States."
With AGIA and Trans-Canada, this seemed not a problem, as Canada as well as Mexico were both exempt this regulation. So does this place restrictions on Parnell's plan? And have you had words with the President on getting this "Export Limitation" lifted, by the sitting President, as it appears this would be a "1st" requirement before this state goes off trying to peddle the commodity. Thanks for your help this matter.
Another line idea that envisions the gas to run to Valdez for export thinks it can utilize an export permit originally approved for the Yukon Pacific Corporation. But that license was not for export, only a FERC certificate to build an export LNG facility and the experts on federal licensing that reviewed that license have warned the legislators that it would be easier to re-apply once contracts were signed, sealed and waiting for deliveries. And the YP license expired last year, so is now null and void. According to a reliable source, it will take from 5 to 10 years to get an “export ban” conditioned to allow something to make this “export” a go project. But with the current climate, there is no sitting President that would ever sign such legislation into effect – banning the “ban”. It would be political suicide, as the condition for which the ban can be lifted is based on one too many economic factors wherein the rest of America becomes part of the equation, so it will never happen. Let’s face it, the rest of America despises Alaska as we still garnish more Federal tax dollars per capita then any other state in the Union yet have the largest oil fields in North America. Talk about a “welfare” state of affairs. If the “ban” is repealed, it will be done behind closed doors with some secretiveness and there will never be allowed public scrutiny. Or it will require this state to lawsuit the Fed.'s. That is why it is so important to now come together for our own rescue of “our” resource. We must rally a cause that tells the President under no uncertain terms to allow a lift on the existing “export ban”, until such time an in-state natural gas pipeline is in place for the people. A separate line all by itself, so we can control its destiny. Any other way would be suicide upon the resource and suicide upon this state’s future wellbeing. And there is already a solution on the drawing boards wherein natural gas could be running into Fairbanks and down to Anchorage within 3-years, a viable project that has not caught the undivided attention of the representative body, even though most have been briefed by the project coordinators – a private entity managed by two long time Alaskans. It is called the “Arctic Fox Pipeline”. And there is a reason as to why this line has been left to collect dust on the “Think Tank” shelves and banned from the halls of the Alaskan legislature. It works! The numbers work, the schedule works but it does not provide a political tool that can be used against us. That same age old strangulation act played upon us by inept representation time and time again. They have a big problem with projects that do not provide them with ransom control. So I urge you to write to the President, asking him to not lift the Alaska Export Ban until such time our heating bills are tame, from low cost natural gas piped down the streets of Fairbanks, the Matanuska Valley, Anchorage and the Kenai. When enough pressure is forwarded this concern to the proper channels, then maybe those doing nothing but collecting a paycheck on our dime and time, they will start to retreat from the “Big Pie” in the sky project and start to spend time working for the citizens’ interests, instead of against us. Once again, of all the correspondences I have forwarded to the legislative body and also to the Alaska delegation my concern this “ban”, I have received nothing in return, as to come forward now and try to explain to the citizens that $millions$ approaching $billions$ has been sunk into something that will never happen, well that doesn't side too well come re-election time or at a time when we are faced with oil at $104 a barrel and climbing. Damn, smells like “Corrupt Bastard Club” cigars smoldering, and what’s with all those empty martini glasses?
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