Patti Epler, Alaska Dispatch, Dec 22, 2010
Don't bank on a big natural gas line from the North Slope for another 25 years, a new federal forecast predicts.
The U.S. Energy Information Administration earlier this month concludes the price of gas won't be high enough to make construction economical until about 2035. Reliance on shale gas and renewable energy sources are more likely the way of the near future, the report suggests.
But Larry Persily, Alaska's federal pipeline coordinator, downplayed the significance of the agency's annual projection saying it's just that -- a projection that doesn't take into account a number of important factors.
"It's unsettling to look at that I'll admit," Persily said, adding that he's also seen numerous other projections that put North Slope gas feasible as soon as 2020.
Persily said key factors that could influence the price of natural gas that have not been taken into account include tightening of federal rules that restrict greenhouse gas emissions. Those restrictions would tend to spur a move toward the use of more natural gas and away from coal or oil.
He noted there also may be restrictions on shale gas production that could give a boost to natural gas.
"If you assume the status quo, then that's what you end up with," he said of the report.
Meanwhile, in Alaska two projects are continuing to work on possible tentative contracts with potential North Slope gas customers. The Alaska Pipeline Project, a joint venture of TransCanada and Exxon Mobil, is being supported by the state under the Alaska Gasline Inducement Act. Gov. Sean Parnell has asked for $160 million in his budget proposal to continue helping the AGIA project in FY 2012.
The Denali project -- a joint venture of BP and ConocoPhillips -- also is continuing to negotiate with potential shippers. Parnell has said he expects to see information about recent bids for the state's gas sometime in early 2011.