More Good Energy News: Natural Gas and Pipelines

By April 10, 2008Energy

A BP and ConocoPhillips news release:

Work to Begin Immediately on New Joint Pipeline Effort to Bring Alaska Gas to Market

BP [NYSE: BP] and ConocoPhillips [NYSE: COP] today announced they have combined resources to start Denali – The Alaska Gas Pipeline. The pipeline will move approximately four billion cubic feet of natural gas per day to markets, and will be the largest private sector construction project ever built in North America. The project combines the financial strength, arctic experience and technical resources of two of the most capable and experienced companies in the world.

BP and ConocoPhillips plan to spend $600 million to reach the first major project milestone, an open season, commencing before yearend 2010. Following a successful open season, a process during which the pipeline company seeks customers to make long-term firm transportation commitments to the project, the companies intend to obtain Federal Energy Regulatory Commission (FERC) and National Energy Board (NEB) certification and move forward with project construction. The FERC and NEB certificates are the critical permits that provide government authorization to construct a pipeline.

The announcement settles at least one part of a longstanding controversy of how to get Alaska’s energy wealth to the lower 48. It’s a heck of a project, which according to the New York Times article would include a $5 billion gas-processing facility on the North Slope, would cost about $30 billion and take at least 10 years to complete. Other energy and construction companies are definitely interested in participating, the Houston Chronicle reports.

But, of course, you can’t have just good news when it comes to natural gas and increasing energy supply. In Congress, Senators have introduced a bill that would give NIMBY opponents the trump card in blocking needed LNG facilities. Presidential candidates Obama and Clinton say they like the bill, competing for the environmentalist vote in Oregon. And what about the people who heat with natural gas?

You can count on the Albany Democrat-Herald to make the basic point that others prefer to ignore:

The price of natural gas has soared the last few years, largely as the result of higher demand and restricted supplies along the West Coast. So families pay $200 or $300 a month for heat in the winter, and even then they are likely to shiver through parts of the day.

One way of reducing the price is to increase the supply, which is why as long as LNG is cheaper, importing it is a sensible idea.

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