The energy industry’s revived interest in the dormant AlaskaNatural Gas Transportation System (ANGTS) has caught the attentionof FERC Chairman James Hoecker.

“I’m very pleased to see renewed interest in the ANGTS comingout of Alaska due to the projected gas supply shortfalls in theCanadian market,” he said in a speech to state lawmakers and energyproducers at a one-day conference sponsored by The Energy Councilin Washington D.C. yesterday.

Part of the reason for the sudden appeal of ANGTS is that “thegas cushion, the reinjected gas on the North Slope, is no longernecessary. In fact, it’s actually a detriment to the continuedproduction of a lot of the crude reserves up there,” Hoecker said.

“So the question is what do we do with that gas? Well obviouslyif we’re going to get to a 30 Tcf market and given certaindeliverability shortfalls in western Canada, that would be a veryimportant source to look at” to meet expanded demand in the lower48 states, he told NGI. It’s estimated Alaska holds as much as 50Tcf of natural gas reserves.

Although certain portions of ANGTS have been pre-built, Hoeckersaid about 1,500 miles still would need to be constructed for thesystem to be operational. Foothills Pipe Lines Ltd., which is ownedby TransCanada PipeLines and Westcoast Energy, favors reviving theoriginal ANGTS project through Canada’s Yukon Territory. A newergroup called Arctic Resources (Alaska), which is backed byHouston-based Municipal Energy Resources Corp., has proposed analternative to the ANGTS project, which has been latent for about25 years (See NGI’s Daily Gas Price Index 3/13/00).

Although some U.S. producers have their doubts, Hoecker said hebelieves “a 30-35 Tcf gas market in the U.S. is within reach.” Henoted the Commission has taken several actions “to ensure a betterfuture” supply of natural gas.

“It has proposed more competitive and fairly regulated gas andoil transportation on the Outer Continental Shelf. It is changingcourse to preserve Section 29 tax credits for gas production fromtight [sand] formations…..It [also] has adopted policies thatwill help promote the expansion of [an] interstate natural gaspipeline network in a prompt but responsible way.”

Ronald Oligney, director of engineering/research development atthe University of Houston and co-author of “The Color of Oil,”sees a very bright future for domestic natural gas. “Gas by the endof 20 years is going to [be] cutting into the oil segmentconsiderably,” he said at the conference. It’s “very clear thatthere’s a very, very unstoppable…..shift from oil to natural gas”that is under way.

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