June 2007 Update

In the news...

• Palin Has Signing Ceremony for Gas Line Act (6/6/2007) -- Governor Sarah Palin held a ceremonial signing of the Alaska Gasline Inducement Act (AGIA) in Fairbanks, Alaska. The event took place at the Fox Visitor Center near the Trans-Alaska Pipeline. "This legislation is open to all comers, all viable, responsible, reasonable entities wishing to compete for the right to tap Alaska's resources," Palin said. "AGIA excludes no one; it's open, transparent, competitive." Due to logistical problems the Governor was unable to sign the actual bill but was expected to sign it into law on June 7, 2007. AGIA will establish a process for competitive bids to build a pipeline to the North Slope and includes incentives and a cash subsidy of up to $500 million. [More here]

• Exxon Mobil, Enbridge Consider Pipeline to US Gulf Coast (6/5/2007) Exxon Mobil and Canadian crude oil pipeline operator Enbridge are considering the construction of a new pipeline that would transport crude from a storage hub in Patoka, Illinois first to Beaumont, Texas and then onto Houston, Texas. It is targeted to be in active service by 2010. Enbridge operates the world's longest oil and liquids pipeline system. It carries Canadian crude to U.S. markets in the East and Midwest. [More here]
  

• Mobil Corp CEO Casts Doubt on Major Pipeline Projects (5/31/2007) In one of the biggest energy stories of the year, Exxon Mobil’s CEO Rex Tillerson told reporters; the company may scrap plans to build the Mackenzie Valley natural gas pipeline in Alaska and Canada. The cost for the pipeline has escalated to $16.2 billion. Tillerson went on to say in an article published by The Globe and Mail, “We are now in a situation where it's not economic at current costs. It may just be that the project is going to have to wait for a different cost environment." Without additional subsidies from the government, chances are slim this project and another planned near the existing Alaskan oil pipeline will go ahead. If the two pipelines are not built by 2014, around 10% of future natural gas supplies will disappear or the equivalent of 25% more energy than that contained in oil imported from Saudi Arabia. [More here]
  

• NEB Approves Emera Brunswick Pipeline Applications (5/31/2007) The Canadian National Energy Board (NEB) has approved Emera Brunswick Pipeline Company Ltd.'s (EBPC) application to build and operate a 30-inch diameter pipeline that will span 145 kilometers from Canaport LNG Terminal at Mispec Point, New Brunswick, to the US border near St. Stephen, New Brunswick. Several conditions were imposed in conjunction with the approval. The conditions included an environmental protection plan, an emergency procedures manual and response program, detailed public consultation program and progress reports. The pipeline is expected to be in service by the end of 2008. [More here]
  

• Hurricane Risks Higher than Usual for Most US Coasts (5/25/2007) A large part of the U.S.’s Gulf of Mexico and Atlantic coastlines have a higher risk than usual for hurricanes in 2007 according to two hurricane researchers. Mark Johnson, a statistics professor at University of Central Florida and Chuck Watson founder of Kinetics Analysis Corp. of Savannah, GA, say coastlines in a total of 20 counties including ten in Florida, eight in North Carolina and one each in Louisiana and South Carolina have the highest probabilities of hurricane-force winds according to their statistical forecast modeling. They expect La Niña weather conditions to develop this summer, causing warmer than normal Gulf of Mexico and Atlantic Ocean temperatures to increase the chance of oil and gas production disruptions from hurricanes. The researchers utilize a computer model that incorporates every oil platform, pipeline, refinery and terminal in the Gulf of Mexico to develop estimates for oil and gas production. By simulating every storm since 1851 the researchers found there is 98 percent chance that at least one week’s worth of oil and gas production will be disrupted during the years with La Niña weather conditions. [More here]