FERC's Hoecker Supports Interest in ANGTS Project
The new-found interest in the dormant Alaska Natural Gas
Transportation System (ANGTS) hasn't gone unnoticed by FERC
Chairman James Hoecker.
"I'm very pleased to see renewed interest in the ANGTS coming
out of Alaska due to the projected gas supply shortfalls in the
Canadian market," he said during a conference sponsored by The
Energy Council in Washington D.C. last Monday.
Part of the reason for the sudden appeal of ANGTS, which has
been dormant for 25 years, is that "the gas cushion, the reinjected
gas on the North Slope, is no longer necessary. In fact, it's
actually a detriment to the continued production of a lot of the
crude reserves up there," Hoecker told NGI.
"So the question is what do we do with that gas? Well obviously
if we're going to get to a 30 Tcf market and given certain
deliverability shortfalls in western Canada, that would be a very
important source to look at" to meet expanding demand in the lower
48 states, he said. It's estimated Alaska holds as much as 50 Tcf
of natural gas reserves.
Although certain portions of ANGTS have been pre-built, Hoecker
said about 1,500 miles still would need to be constructed.
Foothills Pipe Lines Ltd., which is owned by TransCanada PipeLines
and Westcoast Energy, is trying to revive interest in the original
ANGTS project through Canada's Yukon Territory. A newer group
called Arctic Resources (Alaska), which is backed by Houston-based
Municipal Energy Resources Corp., has proposed an alternative which
would start the pipeline at Prudhoe Bay, jump offshore and run east
to Canada's Mackenzie Delta and then south to the United States.
(See NGI, 3/13/00).
Alaska hasn't taken a position on any of the proposals floating
around, said Bill Van Dyke, petroleum manager with the state's
Division of Oil and Gas. "None of them jump out as being robust,"
he noted, but the state doesn't want to discourage interest.
Why the interest in ANGST now? "I think people are taking
another hard look at the project's economics," he said. The project
may have cost $14 billion or $18 billion if it had been built 20
years ago, but the costs have come down considerably due to new
construction techniques. Also, he believes people are starting to
think "maybe there's a place for Alaska gas" in meeting the 30-35
Tcf market that's projected for the U.S. by 2010-2015.
Although some U.S. producers have their doubts, Hoecker said he
believes "a 30-35 Tcf gas market in the U.S. is within reach." He
noted the Commission has taken several actions "to ensure a better
future" gas supply. "It has proposed a more competitive and fairly
regulated gas and oil transportation on the Outer Continental
Shelf. It is changing course to preserve Section 29 tax credits for
gas production from tight [sand] formations.....It [also] has
adopted policies that will help promote the expansion of [an]
interstate natural gas pipeline network in a prompt but responsible
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