Notes From the Road: The Alaska-Canadian North Is A Tough Place To Do Business...

Geek note:  We lament your opinion of us when--as in this morning's alert email (subscribe above right)--the automatic editing program substitutes an "it's" when we actually typed "its".  This is not to say we don't make mistakes, but we prefer to take blame for our own mistakes and not for our robot's.  Actually, we shouldn't blame our robot either, since it's our responsibility to proof read, not its.  -dh

Larry Persily's NARUC Impressions

When we encountered the Alaska Gas Pipeline Federal Coordinator, Larry Persily (NGP stock photo), in Los Angeles this week we asked him for his impressions of the meetings (below).  Persily was also attending the summer meeting of the National Association of Regulatory Utility Commissioners (NARUC)

This conference of about 800 attendees includes regulatory commissioners from the 50 states, U.S. territories and other countries.  Attending are Federal department commissioners, representatives from FERC, DOE and other agencies and some Gaetan Caron by Dave Harbour, NEB, National Energy Board, NARUCof the nation's most influential utility and energy leaders and their staff professionals. From a northern perspective,  National Energy Board (NEB) Chairman Gaetan Caron (NGP Photo) participates on the organization's Gas Committee, where your author once served as Co-Vice Chairman during a term on the Regulatory Commission of Alaska (RCA).  Current RCA Chairman Robert Pickett also serves on NARUC's gas committee while RCA Commissioner T.W. Patch holds membership on NARUC's water committee.  The group adopts resolutions which ultimately affects national policies, including those touching Alaska and Canada.

Following are Persily's impressions: 

What I find invaluable about NARUC meetings is how they are different from any other gas, electricity and energy conference: NARUC meetings feature people who live with reality, who have to apply laws and regulations and the public’s interest to a confusing, conflicting and often confounding market. The sessions are not forecast pontifications about where the markets are headed, but rather straightforward discussions on how to best deal with the markets, wherever they are headed, and how to serve the public in doing so. 
  
The NARUC sessions bring together a well-versed assortment of state and federal officials, along with private-sector experts, to provide a healthy mix of different viewpoints. That’s a big plus. 
  
Variety, practical advice and the issues of the day. Those are key to good sessions. 

 

...because in addition to remoteness from markets, chilling climate, daunting topography, extreme labor and logistical costs, investors must deal with unpredictable tax and regulatory policies, media critics, environmental activists and special interests that would rather investors spend their money some other way or in some other place.   It will be almost miraculous if any big Arctic projects are completed in such a polluted and toxic, political atmosphere.  Without developing petroleum wealth, rural life in the North as we now know it is unsustainable.   If the North's influence leaders and decision makers continue to block life sustaining wealth production, governments could well begin pulling the plug on the flow of subsidies now moving northward as investors find more friendly destinations for their entrepreneurship.  -dh

Globe and Mail by Josh Wingrove and Nathan Vanderklippe.  Shell’s decision late last week to sell its minority stake in the long-simmering Mackenzie Gas Project pipeline renews doubt about whether the project, which would at last unlock much of the territory’s gas reserves, will ever go ahead. Meanwhile, production at the Norman Wells oil field, the crown jewel of the territory’s existing energy sector, has been declining for years, while the lone new well drilled in the NWT during 2010 was a bust.  (Comment: with continuation of adverse Federal OCS policies, we wouldn't be surprised to see Shell once again retreat from the Alaska investment climate as early as a year and a half from now.  -dh)

ADN by Lisa Demer.  Chevron, the biggest oil and gas operator in Cook Inlet, is selling its assets there to an independent company, Hilcorp Alaska LLC.

Calgary Herald by Dina O'Meara.  Royal Dutch Shell PLC has pulled out of the Mackenzie Valley natural gas project, putting its pipeline stake and lease interests on the auction block in a move throwing the future of the long-delayed project further into question.

Foreign Policy by Mia Bennett.  Though the Arctic may be rich in natural resources, that doesn’t mean it’s easy for corporations to make money there.

Commentary: This Calgary Herald Op-Ed by Gil McGowan attacks Alberta leaders and suggests that he knows better where pipelines should go than government experts or industry investors.  We see this sort of back seat driving in Alaska, Ron Liepert by Dave Harbour, Minister of Energy, Alberta, Oil Sandstoo, by those who have a special interest agenda that can only unfold if the way to it is paved with other people's money.    Then, the Calgary Herald's own editorial writer, Licia Corbella, adds fuel to the fire and joins the attack on the industry that feeds Alberta's economy.   If I were a newspaper publisher in Alberta, I'd be delighted to have a great deal of industry support for a political 'gathering of the eagles' such as the one Energy Minister Ron Liepert  (NGP Photo) has so effectively organized in a way that minimizes taxpayer impact.  Why can't more influence leaders in Alaska and Canada simply be more grateful that they were blessed with natural resources that keep a cold, dark place light and warm and provide an income stream that enables civilization to survive?  -dh

 

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