Monday, January 02, 2006

Pipe Dreams: Just Hot Air or Natural Gas

I have been talking to a gentlman who in the mid 70's did the studies on a gas line that were used in testimony before Congressional committees on resource devolpment. He has some interesting insight into what he suggested.

Back in the 70's this gentleman worked for the State of Alaska and came with studies on the building of a natural gas pipeline.

I have known this gentleman for some time and I was surprised to know that he was an ecomonist and consultant. We began discussing the the various options on building the natural gas pipeline.

I asked which did he prefer, the all Alaskan pipeline, or the pipeline going through Canada. He said neither.

He went on and said how the State of Alaska should build a 24" pipeline from the north slope to Anchorage. I asked why and he said the costs involved in the Canadian route are too great and if the oil compainies want to build it they should. He said the state should not involve itself in the construction. I asked why not the pipeline to Valdez and he said why.

He pointed to the fact that the Kenai has the only LNG plant in the United States that exports LNG and it has been in operation in the late sixties. He brought up the idea that a compression station could be built in Anchorage so the gas could be transported to the Kenai facility for processing.

In looking at what he said, it does make sense to build a route to Anchorage and having the gas processed in Kenai for export. This gentleman also spoke to the needs of the Agrium fertilizer plant in Kenai.

A spur would decrease the need for more production in the Swanson River area and the Cook Inlet. This would take pressure off the environment in those regions

He raised some good points. It does make more sense to build a line that comes to Anchorage, but I disagreed with him on the size and how.

The line should be broken into three sections. A main line that goes from the North Slope to Delta. Then branches with a 24" pipe that comes to Anchorage and a larger line that ties in with Canada.

It makes more sense to develop and expand what Marathon and Conoco started years ago. The Far East is still open and even though Russia is coming online and will be supplying Japan, the need will still be there to supply Japan, China and Korea.

Back in 2001 during the Assembly race, I stated that the municipalities should provide funding for a gas line. This would be the spur to Anchorage. If possible, the State of Alaska could be the backer of the financing through fourty year bonds.

The monies generated would go to the municipalities and the pay off of the bond.

The pipeline from the north slope to Delta should be a joint effort and financing between the State of Alaska the oil companies.

The pipeline that goes into Canada from Delta, should be financed by the oil companies.

There are many opinions on the matter and right now they are just dreams.

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