Alaska, Canada Gas Pipelines Could Provide Only Short Price Break
The natural gas that would flow from two proposed Arctic pipelines would likely mean just a temporary price break for consumers, Alaska's natural resources chief said.
The $7.5 billion (euro6.22 billion) MacKenzie gas pipeline in Canada's Northwest Territories is now predicted to come online in 2011 and would provide anywhere from 800 million to 1.8 billion cubic feet of natural gas per day.
Alaska's $25 billion (euro20.72 billion) North Slope natural gas pipeline would follow from two to five years later, pumping an additional 4.5 billion cubic feet per day to a gas hub in Alberta, Canada, and on to Midwestern markets in the United States.
But the effect of all that additional gas would probably mean just a temporary dip in consumer prices _ 25 to 50 cents perthousand cubic feet _ and would last just six months to a year before prices level out, said Alaska Natural Resources Commissioner Mike Menge on Monday.
One thousand cubic feet of natural gas will heat a home for about two days. Natural gas futures on Monday closed at $7.24 per 1,000 cubic feet.
''This distribution out of the hub will reach the entire North American continent, and therefore the depression in price will be relatively small, but it will be significant,'' Menge said. ''I mean, if you're paying bills, any depression is good.'' People who heat their homes with natural gas _ about 60 percent of households in the United States _ could use a break. Nationwide, the average residential price of 1,000 cubic feet of natural gas was $10.74 in 2004, more than $4 higher than five years before that, according to the federal Energy Information Administration.
It is because of the minimal effect on price that the one-time competitors in the race to build the first Arctic natural-gaspipeline now say they want to work together.
''In the past we had a concern that if all the Alaskan gas came to market, it might depress the prices somewhat and skew the economics for MacKenzie,'' said Brendan Bell, the Northwest Territories' minister of Industry, Tourism and Investment. ''I think largely we've now realized that given the bullish price of gas that even if Alaska were to come on first, it wouldn't give us the same concern.'' The Canadian project is about two years ahead of the Alaskan pipeline in the regulatory and permitting process. If the timing works out, the two pipelines would not be competing for labor and steel, plus it benefits both projects to band together against a flood of liquefied natural gas that is expected to start arriving on American shores soon from gas fields around the world, Menge and Bell said.
About 1.2 trillion cubic feet of LNG, or liquefied natural gas, is expected to be imported this year, according to the Energy Information Administration. In five years, that is predicted to grow to 2.7 trillion cubic feet. By 2025, imports are estimated to reach 6.4 trillion cubic feet.
OhmyNews
The $7.5 billion (euro6.22 billion) MacKenzie gas pipeline in Canada's Northwest Territories is now predicted to come online in 2011 and would provide anywhere from 800 million to 1.8 billion cubic feet of natural gas per day.
Alaska's $25 billion (euro20.72 billion) North Slope natural gas pipeline would follow from two to five years later, pumping an additional 4.5 billion cubic feet per day to a gas hub in Alberta, Canada, and on to Midwestern markets in the United States.
But the effect of all that additional gas would probably mean just a temporary dip in consumer prices _ 25 to 50 cents perthousand cubic feet _ and would last just six months to a year before prices level out, said Alaska Natural Resources Commissioner Mike Menge on Monday.
One thousand cubic feet of natural gas will heat a home for about two days. Natural gas futures on Monday closed at $7.24 per 1,000 cubic feet.
''This distribution out of the hub will reach the entire North American continent, and therefore the depression in price will be relatively small, but it will be significant,'' Menge said. ''I mean, if you're paying bills, any depression is good.'' People who heat their homes with natural gas _ about 60 percent of households in the United States _ could use a break. Nationwide, the average residential price of 1,000 cubic feet of natural gas was $10.74 in 2004, more than $4 higher than five years before that, according to the federal Energy Information Administration.
It is because of the minimal effect on price that the one-time competitors in the race to build the first Arctic natural-gaspipeline now say they want to work together.
''In the past we had a concern that if all the Alaskan gas came to market, it might depress the prices somewhat and skew the economics for MacKenzie,'' said Brendan Bell, the Northwest Territories' minister of Industry, Tourism and Investment. ''I think largely we've now realized that given the bullish price of gas that even if Alaska were to come on first, it wouldn't give us the same concern.'' The Canadian project is about two years ahead of the Alaskan pipeline in the regulatory and permitting process. If the timing works out, the two pipelines would not be competing for labor and steel, plus it benefits both projects to band together against a flood of liquefied natural gas that is expected to start arriving on American shores soon from gas fields around the world, Menge and Bell said.
About 1.2 trillion cubic feet of LNG, or liquefied natural gas, is expected to be imported this year, according to the Energy Information Administration. In five years, that is predicted to grow to 2.7 trillion cubic feet. By 2025, imports are estimated to reach 6.4 trillion cubic feet.
OhmyNews
posted by Ottawa Gas Prices | 7:55 PM
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