Northern Gas Pipelines, (Alaska Gas Pipeline, Denali - The Alaska Gas Pipeline, Mackenzie Valley Gas Pipeline, Alaska Highway Gas Pipeline, Northern Route Gas Pipeline, Arctic Gas, LNG, GTL) is your public service, objective, unbiased 1-stop-shop for Arctic gas pipeline projects and people, informal and rich with new information, updated 30 times weekly and best Northern Oil & Gas Industry Links on the Internet.  Find AAGPC, AAGSC, ANGTL, ANNGTC,  ANGDA, ANS, APG, APWG, ANGTA, ANGTS, AGPPT, ANWR, ARC, CARC, CAGPL, CAGSL, FPC, FERC, GTL, IAEE, LNG, NEB, NPA, TAGS, TAPS, NARUC, IOGCC, CONSUMER ENERGY ALLIANCE, AOGA,AOGCC, RCA and more...

2009 LINKS: FERC Reports to Congress, 1, 2, 3, 4, 5, 6, 7....; USGS Arctic Gas Estimates; MMS hearings: RDC, Our NGP, AJOC, DH, ADN, KTUU; Enstar Bullet Line: Map and News Links; ANGDA; Alaska Energy Forum; Prosperity Alaska

2008 LINKS: Shell Alaska OCS Study; Mackenzie Gas Project EIS; Join the Alaska Gas Pipeline Blog Discussion; Governor Sarah Palin's AGIA Links; 2007 ACES tax bill links; Department of Revenue 2007 ACES tax documents;  2007 ACES tax Presentations; 2007 ACES tax news; Alaska Gas Pipeline Training and Jobs; Gas Pipeline and Economic Development; Andrew Halcro; Bjørn Lomborg; FERC's Natural Gas Website Links

WASHINGTON: Alaska Natural Gas Pipeline Act; History of H.R. 4; DOE Energy Bill Position, 6-02; Daschle-Bingaman Energy Bill (Alaska, Sec. 1236 & tax credit, Sec. 2503 & H.R. 4 Conferees), Tax Credit; See amendments, "Energy Policy Act of 2002";  "Alaska Natural Gas Pipeline Act of 2001 (Draft)" & Background Paper, 8-9-01;Alaska Legislature Joint Committee position; Governor's position; Governor's 10-Point Plan; Anadarko Analysis; U.S. Senate Energy Committee Testimony, 10-2-01 - text version;  U.S. Senate Energy Committee Testimony, 9-14-00; Report on the Alaska Natural Gas Transportation Act of 1971, prepared by staff of the Federal Energy Regulatory Commission, 1-18-01

ALASKA: 1-23-03, Governor Frank Murkowski's State of the State Speech; 2002 DRAFT Recommendations to 2003 Legislature; '02 Alaska Legislation; Alaska Highway Natural Gas Pipeline Policy Council; Joint Legislative Gas Pipeline Committee; 9-01 Alaska Models: Canadian Routes, LNG, GTL; HR 4 Story; Cook Inlet Supply-Demand Report: AEDC; Commonwealth North Investigation & Our Article; Report: Backbone; Legislature Contacts; State Gas Pipeline Financing Study; 5-02 Alaska Producer Update; Kenai: "Oil & Gas Industry Issues and Activities Report, 11-02"; Alaska Oil & Gas Tax Structure; 2-27-02 Royalty Sale Background; Alaska Gas Pipeline Office opens, 7-01, and closes, 5-02; Betty Galbraith's 1997-1998 Chronology.  Our copy.

CANADA: 1-10-03, "Arctic Gas Pipeline Construction Impacts On Northern Transp."-Transport Canada-PROLOG Canada Inc.-The Van Horne Institute;Hill Times Reports, 8-30-02; 9-30-02, Cons. Info. Requirements; CBC Archives, Berger Commission; GNWT Economic Impact Study, 5-13-02; GNWT-Purvin & Gertz Study, 5-8-02; Alberta-Alaska MOU 6-02; Draft Pan- Northern Protocol for Oil and Gas Development; Yukon Government Economic Effects: 4-02 & PPT; Gas Pipeline Cooperation Plan Draft & Mackenzie Valley Environmental Impact Review Board;  Mackenzie Valley Pipeline MOU Draft, 6-01; FirstEnergy Analysis: 10-19-01; Integrated Delta Studies; National Post on Mackenzie Pipeline, 1-02;Northern Pipeline Act;  Haida Nation v. British Columbia; Indian Claims Commission; Skeena Cellulose decision -- aboriginal consultations required, 12-02; Misc. Pipeline Studies '02

COMPANIES: Alaska Gas Producers Pipeline Team Newsletter, 7-27-01; APG Newsletter: 5-02, 7-02 & 9-02; ArctiGas NEB PIP Filing Background; NRGPC Newsletter: Fall-02;  4-02 ArctiGas Reduces Field Work; BP's Natural Gas Page; Enbridge Perspective; Foothills Perspective; Williams Perspective; YPC Perspective, 7-02

 MEDIA REFERENCE: Alaska Journal of Commerce; Alaska Inc. Magazine; Anchorage Daily News; Canadian Broadcasting Corporation; Fairbanks Daily News Miner, Juneau Empire; Northern News Services; Oil & Gas Reporter; Petroleum News Alaska; Whitehorse Star, etc.

EXTENDED CONFERENCE NEWS: Alaska Support Industry Alliance, Anchorage Chamber of Commerce,  Canadian Institute, Insight Information, Inuvik Petroleum Shows, International Association of Energy Economists, Resource Development Council for Alaska, Ziff Energy Group

LEST WE FORGET!

Northern Gas Pipelines: 9-30&10-1, 2002: Insight's 4th Annual Far North Oil & Gas Conference, Calgary

Some presentations are reviewed below and available for your downloading.

Chaired by Lawson Lundell Partner, A.W. (Sandy) Carpenter (NGP Photo, 4-25-01, Edmonton), Insight's 4th Annual Far North Oil & Gas Conference came at a time when great orbits were intersecting.  In Washington, a Conference between House and Senate Members seeking resolution on differing versions of HR4 was in high gear.  In Canada, Yukon Government officials were supporting both the financial incentives and route prohibition contained in HR4 versions but opposing development of the Arctic National Wildlife Refuge, adjacent to gas reservoirs.  The Government of the Northwest Territories (GNWT) was petitioning the federal government to revisit applicability of the Alaska Natural Gas Transportation System treaty and international agreements while joining the federal government in pressing Washington to delete certain financial incentives and the northern route prohibition, also opposing ANWR.  Meanwhile, the Aboriginal Pipeline Group seemed closer to its goal of attracting federal support for equity participation in the Mackenzie Valley Pipeline and project sponsors were continuing their steady progress toward filing regulatory applications by next year.  Then, early this week, the coordinated regulatory planning envisioned by the pipeline 'cooperation plan' took a step forward with release of "Consolidated Information Requirements for the Environmental Assessment and Regulatory Review of a Northern Gas Pipeline Project through the Northwest Territories", (Adobe Acrobat pdf format - 84Kb).

In his letter to speakers, Carpenter set the event's tone.  "Other issues and perspectives continue to affect northern development," he wrote.  "To fully understand these influences, we have expanded our outstanding collection of speakers to include presentations on the U.S. Continental Energy Strategy, Canada's response, and the implications of this strategy for Continental Energy Markets."

The following speakers were scheduled:

Monday, September 30.  Doug Matthews, Director of Minerals, Oil and Gas, GNWT; Ric Cameron, Assistant Deputy Minister, Natural Resources Canada-Energy Sector; George L. Person, Jr., Director, Office of American and African Affairs, U.S. Department of Energy; Wayne Sartore, Vice President, Northern Pipeline Development, Enbridge Inc.; Honorable Stephen Kakfwi, Premier, GNWT; Bruce Edgelow, Centre Manager, RBC Royal Bank Oil & Gas Centre; Doug Black, Q.C., National Managing Partner, Donahue LLP; Marcel Hamonic, Manager, Northern Exploration, Shell Canada Ltd.; Rod Maier, Northern Gas Program Manager, Chevron Canada Resources; R.J. (Rob) Hunt, Senior Vice President, Akita Drilling Ltd., Bruce Scott, Director of Northern Development, Duke Energy Gas Transmission

Tuesday, October 1.  John Masterson, Director, Oil and Gas Management, Yukon Department of Energy, Mines and Resources; Melody McLeod, Chair, Mackenzie Valley Land & Water Board; Bonnie Gray, Professional Leader Environment, National Energy Board; Peter Jalkotzy, B.Sc., P.Biol., Vice President, IEG Inc.; Honorable Pat Duncan, Premier of the Yukon; Honorable Pearl Calahasen, Minister of Aboriginal & Northern Development Affairs, Alberta; Judy Kotchea, Present Chief of the Acho Dene Koe, Fort Liard, Northwest Territories; John Olynyk, Associate, Lawson Lundell; Randy Ottenbreit, Manager, Mackenzie Delta Opportunity, Imperial Oil Resources; Jeff Rush, Vice-President, Business Development, TransCanada Pipelines; Ken MacDonald, Director, Canadian Regulatory, BP Alaska-Canada Gas.

Below are notes and links to several of the presentations in the order received:

1.  Wayne Sartore, Vice President, Northern Pipeline Development, Enbridge Inc. (NGP file photo) said that traditional domestic natural gas supply basins will not satisfy demand and that, "gas from the Frontiers (deep water Gulf of Mexico, Atlantic Canada and the North) will be required and indeed critical to meet the continued rapid growth in demand."  He expressed an Enbridge "bullish" view of the North, requiring both the Mackenzie Delta and Alaska by 2011.  He described some of the unique challenges and opportunities regarding pipelining in the North, from Enbridge's extensive experience.  During audience questions, a participant asked about project timing.  Sartore opined that the Mackenzie Valley Pipeline could have first gas to market. He said that for gas to flow by 2007, "absolutely all elements would need to be in line, up to and  including the most optimistic 24 month regulatory approval timeline. He suggested that even a first gas scenario of 2008 would require diligent planning and execution.  See his slides here.

2.  Honorable Stephen Kakfwi, Premier, Government of the Northwest Territories.  Coming a few days after a major presentation to industry officials, Kakfwi continued to promote a strong development message with political overtones.  He said, "the success of development projects cannot be achieved without the meaningful partnership of local residents, governments, and industry. No where is this more true than in the Northwest Territories. We are on the brink of witnessing one of the largest development projects in Canadian history, the beginning of an incredible chapter in the history of Canada. It is a chapter that the Government of the Northwest Territories has long envisaged, but it can only happen with clear and decisive leadership from the Government of Canada."  Kakfwi then outlined four principles:

• He said, "First, we believe that northern gas development is best achieved by allowing companies to make market-based investment decisions regarding the timing and extent of gas development. Government interference in the decision-making process will only work to produce inefficient outcomes."

• "Second," he said, " we believe that gas development must benefit northern residents and businesses, providing a strong and vibrant economy that is prosperous for generations."

• He spoke of, "... the importance of investment in northern infrastructure that will ensure that our full potential is not unduly restricted.

• "And finally," he said, "we believe that the Northwest Territories must receive an equitable share of the revenues generated through the development of our non-renewable resources."

Of particular relevance to current events, Kakfwi said, "A case in point is the analysis by Alaskan North Slope producers of the feasibility of North Slope gas production. They decided to examine two routes to bring Alaskan natural gas to market: the Alaska Highway route, and the Beaufort Sea / Mackenzie Valley route through the Northwest Territories. Before they could even complete their analysis, the State of Alaska passed a law banning the Beaufort Sea/Mackenzie Valley route. Their decision was based entirely on parochial self-interest, and I believe it has only worked to impede the development of their natural gas resources, not enhance it. If this wasn’t enough, the U.S. Congress introduced a similar amendment in the current U.S. Energy Bill that bans the Beaufort Sea / Mackenzie Valley route. We view these actions not only as an affront to efficient private sector decision-making, but also contrary to the free market ideals that the United States purports to be a fundamental right.  Although the Energy Bill Conferees have passed the route ban, another amendment could be far more harmful to the Canadian gas industry. This amendment seeks to provide Alaskan gas production with a price guarantee of $3.25US in Alberta. Now I am sure many of you realize how this price guarantee will distort the North American gas market...."

Readers may download the Premier's speech here.

3.  Peter Jalkotzy, B.Sc., P.Biol., Vice President, Environment, IEG Inc.  Jalkotzy first identified values to consider in northern development: "A Northern Frontier; A Sacred Homeland; A Wellspring of Aboriginal Culture."  He then identified the rewards: "Economic Growth and Diversification; Improved infrastructure; Improves services; and, billions of dollars of resource revenues and profits."

 Readers may download Jalkotzy's PowerPoint presentation here.

4.  Doug Matthews, Director of Minerals, Oil and Gas, GNWT, said that power generation will contribute to continuing, growing demand for natural gas, that the supply is under pressure and that, "changes are occurring in where the electricity is generated. We are seeing more and more competition between molecules and electrons."  He said the increasing trend is to move energy via gas pipeline to points of power production rather than converting gas to electricity for movement via electrical gas transmission lines for long distances.  He warned that while demand is growing, not all new supply will come from new frontiers: "While a market gap of 4 bcf/day may be real, it does not follow that your basin’s 4 bcf will fill that gap," he said.

Readers may download Matthews' full speech here.

5.  R.J. (Rob) Hunt (NGP Photo, 6-02), Senior Vice President, Akita Drilling Ltd.  Revealing the personal side of northern development, Hunt opened his presentation by asking for a moment of silence.  The audience paid tribute to three men who died nearly three weeks earlier in a boating incident.  "Doug Irish worked in our industry with Imperial Oil for 34 years," Hunt recalled.  "He, along with Charlie Meyook and Larry Semmler will be truly missed."  Hunt reinforced the importance of recognizing broad changing trends, as Matthews had (above), and said sweeping changes occur as well in local areas.  Hunt said that his company, AKITA Drilling, entered the northern development arena in the late 1970s.  It formed its first northern partnership with the Inuvialuit in 1983, which has evolved into drilling rig operations with five different Aboriginal partnerships today in Inuvialuit, Gwich’in, Sahtu and Fort Liard areas.  He then spoke of managing expectations, " . . . the expectations of the many different stakeholders, up and down the Mackenzie Valley, in Yellowknife, Ottawa, Calgary & Houston."

Readers may download Hunt's full speech here.

6. Greg Komaromi (NGP Photo, 6-02) Director, Oil and Gas Business Development, Government of Yukon.  Speaking for Premier Pat Duncan, Komaromi focused on 'northern oil and gas development'.  He told of "...headlines across the U.S. are warning consumers of higher gas prices this winter."  He said that, "The U.S. consumes about 72 billion cubic feet of natural gas per day (bcf/d) so that means the industry will have to come up with about 5 billion cubic feet of new supply this year alone. By 2010, this gap will total 50 bcf/d day, an amount of gas four times the total of Canada’s current annual exports, and only 14 percent of the volume contemplated by both the Alaska Highway and Mackenzie Valley pipeline projects."  Those assumptions, according to Komaromi, indicate "...that both the Alaska Highway Pipeline Project and a stand-alone Mackenzie Valley project will be built because the market needs northern gas. These projects are not competitors and one will not foreclose the other."

Readers may download Komaromi's full speech here.

A Northern Gas Pipelines reader, who was also a speaker, was kind enough to forward us his personal notes on general outcomes of the Conference:  Report courtesy of:  Peter Jalkotzy, B.Sc., P.Biol., Vice President, Environment, IEG Inc.

• In contrast to the discussions from three years ago (1999) when a northern pipeline was a possibility, to two years ago (2000) when the Alaska and Mackenzie were realistic potential projects, to last year (2001) when the Alaska line seemed to be ahead in the race - to this year (2002) - many participants and attendees agree that the Mackenzie line will go first and that first gas will likely be 2008 - though mention has been made than an aggressive target is 2007.
• Although there have been thoughts that the complications in the US process have derailed the Alaska line - there are now many that believe the line will be built as well, with a first gas date of 2011.
• Premier Kakfwi's remarks at lunch on Monday were tempered, and were focused on the fact that partnerships are key, government, industry AND aboriginal groups - to read between the lines - he is strongly urging the Federal government to step forward - they have a strong role to play in supporting the development scenarios, and at present they are wasting valuable time.  It was a very powerful presentation!
• This same message was communicated by several American presenters - our federal government needs to recognize the importance of these projects and participate through the streamlining of regulatory systems, additional capacity to their departments, and local capacity moved into YK.  This cannot and should not be handled from Ottawa.
• Another common message was that although all these companies recognize the need for and benefit of meaningful local participation, this will require a substantial boost in capacity and infrastructure.
• There has not been enough dialogue - a longer term vision is needed - to encourage sustainable exploration and production activities.
• There was much discussion about the competition for capital and that the players are global in their opportunities, and if processes and capacity do not fall into place, capital will migrate to other equally viable opportunities.
• Total exploration expenditures for Mackenzie Delta between 1999-2002 have been approx. $400M - anticipated expenditures for 2002-2003 - $200M, and for 2003-2004 - $100M
• Based on the expected drivers - there may be a flurry of drilling activity into the next few years - primarily to meet commitments - but uncertain.
• The current slowdown - is a NATURAL pause as companies take a look at there results over the past three seasons - the level of activity we saw last year should not be expected again for some time to come - at least until there is a conduit to move the resource to market.
• Current expectations of supply and demand for gas remain unchanged from last year - 5% per year loss of supply to demand ratio - the gas will have to come from somewhere, and the north is the logical solution.
• What are the key challenges to moving these projects forward - (1) regulatory agencies/federal involved and fully participating - need to be fully prepared for the activities related to applications for a "greenfield" project; (2)  federal involvement and settling the land claims;  (3)  competition for capital and other sources, other types of energy supply - align the interests of all the parties (i.e., producers, explorers, agencies, local communities); (4)  northern support - conditional to the benefits to be realized - the APG to become a full fledged partner.

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