More on Mackenzie - Climate Legislation - ANS Lease Sale

 Fairbanks News Miner, by Dermot Cole.  The Calgary newspaper quoted Doug Matthews, a Calgary energy consultant, as saying the latest news is not good for the pipeline.  “The way the feds have handled this hasn’t exactly basked themselves in glory,” he said. “I hate to be negative, but there’s a whole bunch of things piling up against it. I can’t say I’m optimistic.”  The newspaper said, “Market observers said Mackenzie gas has essentially priced itself out of the market. The pipeline, which was originally expected to cost about $7 billion, skyrocketed to $16 billion when the most recent  estimates were released in the spring of 2007.”  Peter Linder with Delta One Capital Partners in Calgary said Arctic gas can not compete with shale gas.  “Mackenzie Delta gas makes no sense whatsoever—it’s never made sense, not even 25 years ago. I don’t think we need that pipeline in my lifetime or even in yours,” he told the Herald.  (See yesterday's related links.)

Climate Change Legislation Exports More US Jobs

Greenwire/NY Times (10/28) reports, “Valero's Bill Klesse alleged that the Senate bill and its House counterpart would create large new costs that would drive domestic gasoline and diesel production offshore, cause job loss, and reduce U.S. energy security. He spoke on behalf of the National Petrochemical and Refiners Association.   *     The Hill (10/29) reports, "This administration is not going to allow offshore drilling for oil and gas unless it's part of some bigger deal," Sen Lindsey Graham said in a conference call with South Carolina reporters. "I don 't think you'll ever have offshore drilling for oil and gas until you marry it up with emissions controls."   *    Washington Times (10/29, subs. req’d) reports, “Large and small electric utilities offered opposing assessments of the Senate's climate change bill Wednesday, reflecting the regional differences over the legislation.    *     (Comment: It is unbelievable that certain leaders believe that cap and trade legislation will prevent natural catastrophes.  -dh) New Orleans Times-Picayune (10/29) reports, “In '05, Hurricane Katrina took an estimated 1,700 lives, displaced a million people and cost well over $100 billion," Senate Environment and Public Works Chairwoman Barbara Boxer, D-Calif., said Tuesday at the first of three hearings her panel is holding this week on global warming legislation. "Four years later, there is still suffering, and it will take billions to protect the coast in that region. Katrina provides a window into the kind of world we can expect if we fail to act." U.S. Rep. Edward Markey, D-Mass., made a similar argument during a House hearing last week. "We all remember the tragic consequences of Hurricane Katrina," Markey said. "The breached levees, water-filled streets, and families seeking shelter in the Superdome . . . Katrina foreshadows the consequences of climate change if we do not make the necessary preparations."     *      BILLINGS- As debate over climate change legislation heats up on Capitol Hill, the Director of the University of Montana’s Climate Change Studies Program, and a co-author of a Nobel Prize winning report, says cap and trade legislation could ruin the US economy.  During a Wednesday morning interview with statewide radio talk show host Aaron Flint on “Voices of Montana,” Dr. Steve Running said any climate change solution needs to involve all nations.  “We have to have all the major nations in agreement on future progress,” said Running.  Running is a co-author of the Nobel Prize winning Intergovernmental Panel on Climate Change, and founder of the Climate Change Studies program at the University of Montana. He added, “If the US passed a cap and trade and other countries did not, it wouldn’t work. It would ruin the US economy and it wouldn’t save the climate either.  

(Comment: the anti-development mentality confuses inflation with percentage growth.  They think that they can extract more taxes by arguing for a percent increase: disguising that as an inflationary increase.  Really, it's conversion of a predictable tax/royalty amount to a progressively increasing rate that stifles development, as the so-called ACES bill did in Alaska.  -dh)   Houston Chronicle (10/29) reports, “In a meeting Wednesday with the Houston Chronicle editorial board, Salazar said the royalty rate companies pay for oil and natural gas from onshore fields has been the same for nearly 30 years. “It 's the same royalty rate regardless of whether you have drilled and are taking oil and gas from a known play or whether you're in a play where you're a wildcatter and put up with a lot of risk for a discovery,” Salazar said. “I think if companies are taking a bigger risk, there ought to be ways of incentivizing that.” Salazar is continuing to review the plan for new drilling on the outer continental shelf developed by former Interior Secretary Gail Norton in 2007. An appeals court ruled earlier this year that the plan didn't properly consider environmental impacts of new offshore lease sales.

ANS Lease Sale: Alaska Dispatch

According to Reuters, the State of Alaska held a lease sale Wednesday for exploratory oil and gas rights on the North Slope, and it seems to be a small bright spot in energy news. Kevin Banks, the acting director of the Alaska Division of Oil and Gas told Reuters that the sale was more active than people expected, with a total of 8.5 million in high bids for North Slope leases. The most active bidding came for acreage near existing fields, such as Badami, Kuparuk, Alpine, Point Thompson and Prudhoe Bay. In a second lease sale, there was a single bid from a private investor for acreage in the Brooks Range foothills, which are expected to hold more potential for natural gas than for oil. Energy companies already hold many leases in the foothills, and they seem to be waiting for news of Alaska's gas pipeline before beginning operations. Read more here. On the subject of a gas pipeline, Banks was quoted saying, "We're closer now than ever." Alaska Beat hopes he means that more than Canada's Environment Minister did when he said the same thing about the Mackenzie gas pipeline.