Drue Pearce: A lot of federal support for gas line

The head of the Office of the Federal Coordinator, the agency that is overseeing the effort to build a natural gas pipeline from Alaska to the lower 48, sat down for an interview recently with ADN reporter Erika Bolstad. Drue Pearce told Bolstad from her office in Washington, DC that both the Obama administration and the U.S. Congress are solidly in favor of the effort:

"There's a lot of support for the project both in the administration, as well as in Congress, both the House and the Senate and, frankly, both Republicans and Democrats. It's a project that clearly had a lot of support in 2004 when the enabling legislation was passed, and in 2006 when I was nominated and confirmed. And the project itself has a great deal of interest. We get calls often from legislative offices saying, 'Is there something we can do to help?' In the Senate energy bill, there are sections about the pipeline. Frankly, the ideas for those all came from members on the Hill; they weren't things that we put forward. We're gratified that there's bipartisan support."

Pressed by Bolstad about whether federal support is real or just political posturing, Pearce emphatically stated that the support is genuine:

"I think it's strong support. I'll give you an example. Interior Secretary Ken Salazar, after his confirmation, the pipeline was one of the first things he asked to be briefed about. And we've seen that in a number of agencies. People want to get to work on this project. Everybody supports it; it's a great project, it's huge, lots of opportunities for lots of people to be involved."

"You see analysts saying, 'The money's not there, the prices aren't in the right place for a project of this magnitude, there are shale deposits looking very promising in the Lower 48.'"

"The beauty of commercializing our gas is it's going to tie into a system of pipelines that's already in place. Conventional natural gas production in western Canada is declining. The pipes are already there. Our gas will replace the gas that's in decline, coming into upper Midwestern markets that neither the shale gas nor LNG, frankly, are coming to on a massive scale. So we have almost a ready-made market. People are dependent on there being gas coming through those lines and nobody envisions that they will be taken out of service. Both companies have said, looking at the early modeling they've done, they believe they can deliver gas into market at an economic tariff."

Pearce also said that that the recent announcement that ExxonMobil will partner with TransCanada on the signature project of Gov. Sarah Palin is important, not only because the oil giant brings cash and technical expertise to the table, but more importantly it means that all of the major North Slope producers are now party to either AGIA or the Denali project.

The full ADN interview with Coordinator Pearce is here.

Update: Gov. Palin directs her Twitter followers' attention to the ADN article here and here.

- JP

Pipeline companies:Alaskan natural gas is needed

Despite today's low natural gas prices, spokesmen for the two competing Alaskan natgas pipeline projects say that the state's bountiful gas resources will have markets ready to purchase it.

"That's the nature of the gas business - the price goes up and the price goes down," said Tony Palmer, vice president for Alaska development with the Alberta-based company, in a meeting with the Juneau Empire's editorial staff.

Dave MacDowell, a spokesman for the competing Denali project says his company also expects a pipeline to be viable:

"We wouldn't be doing what we're doing if we didn't believe there was a place for Alaska gas in the North American market," he said.

Gov. Sarah Palin told CNN's Wolf Blitzer in an interview last week:

"Demand for natural gas is increasing. In fact, by 2030 we'll probably see about a 40 percent increase in demand for natural gas."

TransCanada's Palmer explains that as prices plummeted due to the global economic recession, gas exploration companies quit drilling for new reserves. North America is using its gas reserves faster than they are being replaced, which is likely to increase prices in the future.

- JP

Gov. Palin's Pipeline Clears Another Hurdle

Gov. Sarah Palin's signature project, a gas pipline to deliver one of Alaska's most bountiful energy resources to the lower 48, has taken another small step forward:

WASHINGTON, D.C. -- Federal pipeline regulators have granted TransCanada Corp.'s request to work with the regulators in advance of deciding to develop a multibillion-dollar natural gas pipeline from Prudhoe Bay to Alberta. By working with the Federal Energy Regulatory Commission in advance on the Alaska portion of the pipeline project, TransCanada can speed up its preparation of a formal application to have its project sanctioned. It also could speed up FERC's sanctioning, as its staff will be better versed in the project.

Read the full story on the Alaska Daily News website.

- JP