Alaska Dispatch by Amanda Coyne. ... Propane has the potential to do more than just power your outdoor grill. It can heat Alaska homes, cook Alaskan meals and even fuel Alaskan vehicles, thanks to advances in technology. A company called ROUSCH CleanTech (NGP Photo with Roush executive, Todd Mouw) has delivered a propane fuel-injected carburetor that works even in the coldest North Slope temperatures. And ANGDA has decided to partner up with ROUSH. Propane-powered vehicles could save Alaskans money while making Alaska air even cleaner. Turns out propane is kind of a wonder fuel. Though it isn't a true renewable, propane costs about a third of unleaded gasoline or diesel, has about a third fewer greenhouse gas emissions and, if nothing else, could serve as a "bridge" fuel until renewable fuels are financially viable. And because propane comes with natural gas, we've got a lot of that bridge fuel. Every day, the producers re-inject between 50,000 and 80,000 barrels of propane back into Alaska's North Slope oil wells. "We have a bounty of propane on the slope," said Harold Heinze (NGP Photo, with Bob Stinson in background, at last week's Propane Conference), the head of ANGDA. "But we're bringing it in from Canada at a much higher price than we should be paying."
KTUU by Ted Lamb. Drivetrain-designers Roush CleanTech brought some propane-powered trucks up to Alaska about nine months ago to show folks it could handle the state’s tough conditions. “The truck and technology came through with flying colors, it worked down to 55-below,” said Todd Mouw (NGP Photo with Anchorage Mayor Dan Sullivan), vice president of Roush CleanTech. Mouw has been visiting with state officials and companies that have large fleets of vehicles, promoting his propane trucks.
Alaska Dispatch by Austin Baird. A report by economists for Wells Fargo released this week finds that Alaska is among 13 states that "likely fell into recessionary territory in July," even though the country's economic outlook as a whole "remains in positive territory." The report draws from data compiled by The Federal Reserve Bank of Philadelphia that attempts to estimate the current health of the economy. Alaska's "economy is very cyclical and fluctuates quite a bit," Michael A. Brown, one of the economists who authored the report, said Thursday. "Obviously, a lot of that's tied to oil and energy, but growth has decelerated in other areas as well." ... But Neal Fried (NGP Photo), a state labor economist, said he's wary of economic indexes that rely heavily on national averages or data tied to manufacturing, which Alaska doesn't have a lot of. He also said the jury's out on the economic impact of the Japanese disaster on Alaska.
After a successful run with propane autogas, key industry members discuss the future of propane autogas on the North Slope of Alaska. Today’s Alaska Propane Technical Summit will host 30 government officials, operational experts representing North Slope companies, and other potential stakeholders to discuss how ROUSH CleanTech’s propane autogas technology can promote job growth and environmental sustainability in Alaska, while turning an underutilized native natural resource into an economic gain. (NGP Photo: Todd Mouw of Roush CleanTechnologies attending the ANGDA propane conference last spring in Anchorage.)
Commentary: Last Thursday and Friday we heard from Alaskan and Lower 48 entrepreneurs about the growing feasibility of an Alaska North Slope propane wholesale and retail distribution project. Your author addressed the conference on Friday, noting that a fully functioning Trans Alaska Pipeline System (TAPS) and ANS infrastructure would have to "outlive" the financed life of any propane project in order for it to attract financing. And, there's the rub. Wouldn't a robust TAPS be a likely assumption for any gas pipeline project; if not, who will fund this greediest of all state governments when TAPS closes: the gas line owners and shippers? And who wants to put in a big fish processing plant or hard rock mining operation or oil or in-state gas pipeline or hydro project other than spendthrift government bureaucrats and elected politicians who would be the first to argue for higher taxes on any new corporate citizen if oil goes away. Watch Alaska's Native Regional and Village corporations. When you see them beginning to pull in their horns on Alaska investments you'll know to take cover because the economic end is near. But the end doesn't have to be imminent. Governor Sean Parnell (NGP Photo) took a strong stand last week at the huge pro-tax relief rally in Anchorage. Anticipating opposition in a pro-government Senate, he said, "I will not stand by while some legislators feed government at the expense of jobs." He observed in that speech that, "Some opponents say we can't afford it (i.e. tax reform); I say you can't afford to do nothing". He said there is no question that the past is a good predictor of the future and that, "What you tax more of you get less of." He said, "Some of these senators feel they need to tax as much as they can to spend as much as they can. To legislators who think HB 110 is too risky, I say inaction produces greater risk. Don't do nothing!" His powerful rhetoric produced a standing ovation. Then Thursday, he continued pressuring the federal government for access to our OCS oil and gas resources, that could also give new life to TAPS. It is amid this chaotic political jousting that propane entrepreneurs and possibly a thousand other investors in other sectors are now settling back wondering, "Will Alaska's Senate stubbornly insist on squeezing the turnip dry for this generation of Alaskans, or will they demonstrate faith in the free enterprise system and improve the unfriendliest tax regime in North America so investments can sustain future generations?" If they do the former and call it "victory", it may be a pyrrhic event better known as achieving 100% of nothing at the expense of our children. Investors will also be watching to see how effectively Governor Parnell can lead the Nation's leaders into creating a realistic domestic energy policy. Within a few months, we'll have pretty good State Senate and federal government signals as to whether we can be planning for new prosperity or preparing for poorer times. -dh P.S. Fairbanks News Miner. The editor believes more time is needed to consider whether Alaska's oil provinces should be made more competitive, and his blogger followers believe everything is just fine, thank you. If this sentiment controls legislative decisions then we might as well put the house on the market today. Our hope is that statesmen and stateswomen in the legislature will simply decide that inaction is harmful action, that reducing the confiscatory tax burden established without sufficient consideration in the first place should be moderated, that we should be competitive with other oil and gas investment areas, and, that with TAPS declining so rapidly we are out of time.
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The Propane Conference continued on Friday kicked off by introduction of special guest, Cecil Patterson (NGP Photo). Patterson is Vice President of Phillips & Jordan, Inc., a company that performs emergency and specialty contracting services worldwide, most recently in connection with the Katrina hurricane. The company formed over 60 years ago to perform a land clearing job for the Tennessee Valley Authority and is now interested in doing the same sort of work for Alaska projects, though its expertise also extends to roads, landfills, airports, industrial sites or anything related to land clearing or earth moving. It is also a contractor to the Federal Energy Management Agency, on retainer to assist in the event of a future Alaska emergency. In 2002 the Corps of Engineers named it Civil Works Contractor of the Year.
Speaking for the National Propane Gas Association and Pacific Propane Association, Baron Glassgow (NGP Photo-L) said Alaska had been involved in the trade groups for just ten years, largely represented through AmeriGas, with operations throughout Alaska managed by Randy Bradford. The national association has 3200 companies in 50 states with 38 state and regional affiliated associations. Purpose of the group is to advance safety and increase use of propane through sound public policy. The group is currently lobbying the federal government to qualify as an "alternate fuel" that would provide financial incentives for the entire propane industry, including the fledgling propane automotive industry. The association is also working for federal research funds that would kick start a bio-propane industry. In 1966 the industry managed to have Congress pass the Propane Education and Research Act (PERC) that finances education and research programs with a .04 cents per gallon tax. Demand for propane is 10 billion gallons/year. Of 101 million households, 8 million rely on propane for heating. It is also the most common alternative fuel for autos in the world, with 8 million vehicles powered by propane or a propane fuel mix.
All speakers were impressed with the potential of Alaska's huge propane energy potential. Colorado propane consultant Larry Osgood (NGP Photo-R) provided a detailed explanation of the diverse use of propane fuel. In particular, he briefed attendees on new propane generators being released for retail sale that could provide reliable, multi-hundred hour service in rural villages or serving as back-up for fuel and electric power systems in urban Alaska. If ANS propane became widely available the popularity of the new generators and co-generation machines would likely spread like wildfire in the state, but are very economical even at today's imported propane fuel prices. Asked if the Alaska Energy Agency was aware of this technology, he reported that, "I tried to obtain an appointment but they said that they were too busy to meet with me while I was here for this conference." He observed that since the AEA says on its Webpage that its mission is to "Lower the cost of energy" in Alaska, it seemed strange that they could not make time during the week to hear of new technology that could lower fuel prices in rural and urban Alaska.
Robert Dillon (NGP Photo) of Senator Lisa Murkowski's office invited participants to keep close to his Senator's office due to her interest in supporting both expanded in-state use of resources but also new cost-saving technologies. Responding to a question about the EPA's successes in stopping Alaska OCS development by application of the Clean Air Act, Dillon said that, "EPA Administrator Lisa Jackson has been on a tear and the Obama Administration has not really been able to rein her in. We believe," he said, "the Obama Administration is making an attempt now to work with Shell Oil." Questioned about the Murkowski-Landrieu revenue sharing bill that would divert most of the shared funds around the Legislature directly to coastal governments, he said, "to get things like this passed you need to take care of everybody...." He spoke about Washington's attitude toward domestic energy. "In Washington," he said, "people love to hate the energy industry. We appreciate the importance of the industry."
Since your author is weary of (but still dedicated toward) defending our economy, it was enjoyable, educational and entertaining to hear Todd Mouw's (NGP Photos) discussion of his company's exciting propane vehicle advances and national fleet sales. Todd serves as vice president of sales and Marketing for ROUSH CleanTech specializing in fitting ford truck (and other) products for propane use. The technology is now so advanced after five years of intense research and development, Mouw says, that propane vehicle use averages 30--40 less expensive than gas powered vehicles. Mouw has positioned a Ford F-250 in Alaska and proven that during the winter cold of Prudhoe Bay and Fairbanks and Anchorage, it has never failed to come to life from a "cold start". This is due to the use of the propane liquid as fuel as opposed to propane gas, which is easy to find at stores and many gas stations that also sell propane tank fuel. The range may be 10% less than a gas truck with the same sized tank, but with the cheaper fuel cost, customers will should be very happy operating their new technology. Don't forget that electric autos use the same amount of electricity - on average - as does a complete household, with a very restricted range--and you can't just stop at a station and say 'fill 'er up when the battery goes down. Welcome to Alaska, Roush! -dh
(HB 110 Passed the House Last Night: 22 Republicans Plus Nome Democrat Neal Foster Voted Yes, While All Other Democrats Plus Kodiak Republican Alan Austerman Voted Against Improving Alaska's Investment Climate. Now On To The More Stubborn, Pro-Tax Senate. See Christopher Eshleman's News Miner Report. See Juneau Empire Editorial, John Meyer. -dh)
Follow-Up Propane Report
Yesterday, representatives of various propane industries throughout the U.S. and Canada met to discuss the potential of a massive Alaska North Slope (ANS) propane extraction and marketing program. Alaskan representatives included the conference organizers from the Alaska Natural Gas Development Authority led by Mary Ann Pease (NGP Photo), an ANGDA consultant, ANGDA Chairman Scott Heyworth (NGP Photo-L), along with an ANS producer, several Native corporations, state and village agencies and various entrepreneurs.
Convened at the University of Alaska-Anchorage Commons Building, the new Chancellor, Tom Case (NGP Photo-L), welcomed participants, noting the critical importance of economic development such as the propane project to the current and future economy of Alaska and to career opportunites for students.
While Anchorage Mayor Dan Sullivan was scheduled to deliver opening remarks, his lobying activity in Juneau kept him there and Chief of Staff Larry Baker (NGP Photo) addressed the group. "The Mayor is fighting to keep Alaska open for business and competitive and strongly supports HB 110's passage," he said. The bill is aimed at moderating earlier production tax legislation which elevated Alaska into the unenviable position if being the harshest oil and gas investment climate in North America (See story about Wednesday's HB 110 Rally).
Pease then gave a detailed PowerPoint presentation on the project, citing its benefits to rural Alaskans. "There is a huge part of the state a gas pipeline will never touch," she said. "But this project can energize their communities."
Lieutenant Governor Mead Treadwell (NGP Photo) emphasized his support for Governor Parnell's investment climate tax bill (HB 110) and the importance of developing state policies that support the long term best interests of the state and not just short term gains. He made reference to the gradual opening of the Northwest Passage recalling that, "If Russia can ship liquid gas from Northeastern Siberia via the Bering Strait to China, then so can we." He said that marine traffic through the Bering Strait had multiplied five or six times in the last several years and that Alaskans would likely be, "...tackling the issue of northern ports for the next generation. Arctic shipping is here now," he said, "and here to stay." Concluding with the HB 110 tax issue, Treadwell said that he and the Lieutenant Governor of North Dakota last week made a bet as to whose state would be the largest oil producer when they both left office. As to the high, uncompetitive oil and gas tax regime, he said that it is a question of, "Are we going to feed government or feed our families." Asked about the questionable Senate support for the house bill, he said he believed Senate leaders are "...flexible, and I would say where there is flexibility, apply friction."