Release
here through permission by author:
Dear
Senator Pete Micciche;
I
have taken the liberty to look closer at the possibility of a
pipeline to deliver natural gas to Fairbanks, in a hurry. This idea
is fundamentally different then any and all other such projects
proposed to date as it tries to utilize existing infrastructure no
longer necessary to carry forward the rewards of a Prudhoe Bay sized
oil formation, now in decline. I am bringing this to your attention
due reason that from watching the Senate Select Committee on Energy
hearing(February 6th 2015) to which you chaired, it
appears you seem to have taken an apparent interest ownership of this
dilemma facing Fairbanks, especially with the re-occurring “Air
Quality” predicaments. As you are aware, we have seen many
different “projects” with merit come and go. Regardless, the
preferred choice when it is all said and done is by pipeline –
history proves such as does so the economic advantages of this mode
of time-tested transportation over time. Trucking may suffice as a
“Band-aid”, but why not review all options and finally get a plan
of attack that works? The most recent project of interest is AIDEA's
about face to now haul “LNG” processed from Cook Inlet. It
probably has merit along with “new” risks. One project that I
have been looking at recommends utilizing the “spare capacity” of
the Trans-Alaska-Pipeline-System's “Fuel Gas” pipeline. It has
been acknowledged by the experts that “pipeline” has performed
with “excellence” over the 30-years it has been in operation –
Alyeska Pipeline Service Company has the data to support the
construction costs along with operation and maintenance requirements
for such an achievement. That line runs from Prudhoe Bay to PS#4, in
essence decreasing the length of any “New Construction”
northbound to Fairbanks pipeline by 150-miles(cost factor of an
estimated $177-Million with compression using LowB/HighB estimates).
From records available through the Alyeska “Strategic
Reconfiguration(SC)” process and ADEC permitting, it can be deduced
that “fuel gas” line is now operating at 1/7th the
original design capacity. With a decrease in throughput, the oil
pipeline is running about ¼ capacity and will most likely remain at
that target for some time to come. When one looks at the current TAPS
configuration, it has been almost gutted from its heyday(2-million
barrels/day), with 4-stations in pumping-operation as opposed to
11-stations in full service back in the 80s. With the “SC”
electrifying the operation with equipment efficiencies increased, so
has come a drastic decrease in the “natural gas” requirements.
That “Fuel Gas” pipeline” was originally designed for 36BCF/Yr.
maximum configuration yield with an accompanying maximum operating
yield of 25BCF/Yr. That was for energy required to power 4-pump
stations by fueling gas hog AVON gas turbines. With DRA introduced
into the line, it allowed for less gas turbine exhaust, and today
with the “SC”, there exists a “spare capacity” that could be
put to good use. Current use by Alyeska/TAPS is predicted at between
4.8 to 6.4BCF/Yr. With the Fairbanks load estimated at 12BCF, it
suffices to say the TAPS “Fuel Gas” pipeline is a candidate for
evaluation as part of a pipeline continuation/extension strategy
philosophy. With that said, two sources now exist with respect to
approximately the same mileage from Fairbanks – roughly 350 miles
away, give or take 25-miles either direction. So considering the
“spare capacity” of the Alyeska/TAPS “Fuel Gas” pipeline, it
provides competition and should be a serious contender for any future
project in efforts to bring natural gas to Fairbanks proper. All
said, with equal treatment and not to stop any horses in midstream,
if the cart is before, we must not hesitate to look at this proposal.
The end of the “Fuel Gas” pipeline at PS#4 would welcome a
continuation of a similar pipeline structure to Fairbanks, like
already mentioned another 350-mile extension, with a rough price tag
of approximately $378-Million including compression. Now the Cook
Inlet trucking option means utilizing some infrastructure already in
place, some retrofitting of rail cars and purchasing ISO containers.
Either way, an investment is required to find success. So, how too
pay for an extension if we were to look at the “Fairbanks Extended
Pipeline” option over trucking. Well another added value product
could be introduced into the gas coming from the North Slope, to
increases the overall value of that gas as it is valued today, based
on BTU content. Since that gas has been somewhat contaminated by CO2
through enhanced oil recovery, cleaning up that gas is no easy task
and very costly, if it is to be presented as “pipeline quality”
gas for use by consumers in Fairbanks. But this plan calls for
enhancing the BTU quality of the existing “excess” gas that could
be delivered to the tail-end of the “Fuel Gas” pipeline at PS#4,
with the addition of “Slack Line Gas” that is readily available
at the 4-mile long slack line region in close proximity to Atigun
Pass. So with the addition of a low suction head “Hydrocarbon”
pump, the gas that remains a constant in the “Slack” could be
extracted and injected into the gas that would flow through the
extended natural gas pipeline – the “Fairbanks Fuel Gas”
pipeline. Since that “slack line” gas is a Butane based
constituent, a gas makeup of 10% could elevate the BTU content from
850 to 1250, thereby increasing considerably the energy content of
the gas delivered to Fairbanks. So for a preliminary cost of roughly
$400-Million, high-BTU gas could be delivered to Fairbanks at a
delivery rate in excess what was considered under the “LNG”
trucking potential. It is estimated that 18BCF/Yr. of 1250BTU gas
could be delivered, and if we began to put it together today, maybe
2-winters from now the spigot could be “Open for Business”. The
TAPS 150-mile “Fuel Gas” pipeline was built in a single winter,
as to not disturb the permafrost. Design could be completed by this
winter's end, as Alyeska has the data. Pipe and compressor and
ancillary components could be purchased. By summer of 2015, a
concrete pad could be fabricated, with winter 2015 ditching the pipe.
And by summer of 2016 it would mean commissioning time. Now this gas
would be borderline “wet”, so it is not for consumer use. It
could be conditioned, but the plan here is to deliver by additional
pipeline infrastructure the high-BTU gas to the existing “Coal
Fired” power plants, wherein the existing burner/steam-boilers
could be retrofitted to fire on “gaseous” fuels, thereby
decreasing the PM2.5 emissions throughout the city. Any additional
gas not used could be used to fire a gas turbine designed to handle
the gas “as is” and generate electricity. So, here is a plan that
works. How to pay for it? Simple – it's called the Alaska Railroad,
with $18-billion in AA bonds for sale. That “sale” already
approved by the state legislature for “building” a natural gas
pipeline to serve the needs of the state's residents. So, the
governor declares an “Emergency” due “Air Quality” concerns
and then we sell those bonds to FEMA. We don't need a loan, just find
a government entity that is interested in funding through the bonds
to help fix the “Air” problem, before it runs the military out of
town. It is guaranteed payback, just may not get a ROI that would be
expected by the banking institutes, the reason an “Emergency
Declaration” for poor air quality helps the issue. FEMA is in the
business to assist, give them an offer they can't refuse. And it
could be guaranteed by the “State” through its “Reserve”. Now
the $400-Million is paid for by the Fairbanks' consumers through that
bond sale payback to FEMA, a 30-year term which amounts to about
$12k, or $380 for 30-years. About the same price it will cost for
residents to convert to “NG” if it ever becomes a reality through
the “LNG” trucking project. Look, no need to spend lots of money
on retrofit projects, just get the price of electricity lowered,
along with lower emissions, kill two birds with a single shot. This
works, it already has for Alyeska, for some 30-years by now. It is a
waste to see unused infrastructure, well just rusting away! So,
please take this project under consideration for review, maybe as a
back-up to what is proposed today by AIDEA. In fact, both projects
find merit, so why not push both through! The LNG for the consumer
and the pipeline for utility and military use as it would provide a
back-up.
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