Monday, March 02, 2009

Halcro's Plan P: Putting Palin's Pipeline Plan Down (Update)

Once again and again and again....... Halcro is fixated on Palin. He is calling plans for an in state gas pipeline project baby AGIA.

He attacks Palin but offers no realistic solutions.

A better solution would be to deregulate the Cook Inlet gas market and let the price of gas rise to attract the capital to develop additional Cook Inlet gas.


Halcro must of missed the lawsuit on beluga whales and the impact it could have on the Cook Inlet. No company in their right mind would invest until the lawsuits have cleared the courts. And given it's the Obama administration we are now under, we may have some serious problems.

But of course Halcro being the business man he is (a silver spooner), he would have the forward thinking ability to see his comments are not up to speed? No.

Next, Halcro talks about oil shale development driving down the costs. I happened to think that there was hope on that until Obama was elected.

Halcro on the shale development:

An ongoing wave of new domestic shale gas production and an expected influx of LNG from new liquefaction plants in Qatar and elsewhere look set to converge with a massive outflow of industrial gas demand as the recession deepens. Prices are already below $4.50 per million Btu and talk is being heard of $3/MMBtu gas.


What was it Interior Secretary Ken Salazar said about the oil shale?

Those who have fantasized that oil shale is a panacea for America's energy needs have been living in a fantasy land.


I wouldn't expect any great developments on oil shale in the near future when you consider the Obama administration blocked Bush's plan on oil shale development.

And what about the recession's impact on other projects?

Halcro states:

While the Denali project, a joint venture by BP and Conoco Phillips, is pushing ahead outside of the AGIA process and taking a longer view of the U.S. gas market, it's possible that bottom line economics will factor in the need for some kind of delay.


That is the point of building in an in state gas pipeline. I however, think that we should take the opportunity to develop the methane gas in the Delta region and the Mat Valley. The costs would be cheaper and come on-line sooner.

But at this point, it is too early to tell what is on the minds of ANGDA and the Palin adminstration.

Halcro is full of criticism when it comes to Palin, but he offers no solutions.

UPDATE: In response to AK Engineer, to clarify and add the statements made on oil shale leases being closed by the interior secretary. Oil and gas extraction come from the same fields. And because of oil extraction, it makes it financially possible to extract the gas. But given the price of oil and gas, the extraction of and production of oil and gas is too costly.

With the cap and trade policies of the Obama administration, the new environmantal impact on shale fields like Bakken and Barnett will be considered greater and as such, more stringent laws and more costs will be involved in extraction.

Below is an example of what is happening. The same is happening in the tar sands in Alberta and gas is found in the tar sands. But greenhouse gas emissions have gone through the roof.

I am suprised by the comments of Ak Engineer of trying to seperate the two when both gas and oil in new shale leases are impacted by the ban. And given the costs of extraction and production, shale oil and gas are in decline.

Chesapeake Energy to cut production as prices fell

The company said it will cut around 200 million cubic feet per day of natural gas production and approximately 6,000 barrels per day of gross oil production for at least the month of March. If weakened natural gas and oil prices persist, Chesapeake is considering trimming drilling activity by another 10 percent during 2009. Chesapeake has reduced drilling activity to 110 operated rigs currently, compared with 158 in August 2008.


U.S. natural gas rig count falls 36 in latest week

The report showed there were 1,018 U.S. rigs drilling for natural gas, down about 412from the same year-ago week.

The natural gas rig count peaked last year at just over 1,600 in September, but traders said tight credit and a 70 percent slide in gas prices over the last eight months have forced some producers to scale back drilling operations.


As for Colorado, this is one state that was banned from holding shale lease sales.

The Illusive Bonanza: Oil Shale in Colorado “Pulling the Sword from the Stone”

Once the shale is dry, it will be heated, and if all goes well, three years later oil and natural gas will flow.


Not now.

3 comments:

AK Engineer said...

The reference is to shale GAS, not shale OIL.

http://alaska-gas-pipeline.blogspot.com/2009/02/natural-gas-value.html

Take a look at the Chesapeake Energy presentation

Tom said...

Shale oil and shale gas......The Barnett fields,Bakken wells, etc, etc.

The cap and trade on emission plus the extraction come under the same fields that have been scrapped.

Tom said...

Ak Engineer here is a story on the oil and gas shale.

http://www.forbes.com/feeds/ap/2009/03/02/ap6114901.html

"...The company said it will cut around 200 million cubic feet per day of natural gas production and approximately 6,000 barrels per day of gross oil production for at least the month of March. If weakened natural gas and oil prices persist, Chesapeake is considering trimming drilling activity by another 10 percent during 2009. Chesapeake has reduced drilling activity to 110 operated rigs currently, compared with 158 in August 2008."

Ak Engineer, the two go hand in hand and with the price and cost of extraction and the closing of oil shale leases, Halcro's comments are wrong.