Legislature(2009 - 2010)BARNES 124
04/07/2009 03:00 PM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| Overview: North Slope Natural Gas Pipeline Projects | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
April 7, 2009
3:06 p.m.
MEMBERS PRESENT
HOUSE SPECIAL COMMITTEE ON ENERGY
Representative Bryce Edgmon, Co-Chair
Representative Charisse Millett, Co-Chair
Representative Nancy Dahlstrom
Representative Kyle Johansen
Representative Pete Petersen
Representative Jay Ramras
MEMBERS ABSENT
Representative Chris Tuck
COMMITTEE CALENDAR
Overview: North Slope natural gas pipeline projects.
Presentations by:
Bud Fackrell, Denali Pipeline Project
Tony Palmer, TC Alaska
PREVIOUS COMMITTEE ACTION
No previous action to report
WITNESS REGISTER
TONY PALMER, Vice President, Alaska Development
TransCanada PipeLines Limited (TransCanada)
Calgary, Alberta
Canada
POSITION STATEMENT: Presented an overview of TransCanada's
Alaska Pipeline Project and reviewed questions provided by the
co-chairs.
BUD FACKRELL, President
Denali-The Alaska Gas Pipeline (Denali)
Anchorage, Alaska
POSITION STATEMENT: Presented PowerPoint an overview of the
Denali Alaska Gas Pipeline project and reviewed questions
provided by the co-chairs.
ACTION NARRATIVE
3:06:09 PM
CO-CHAIR CHARISSE MILLETT called the House Special Committee on
Energy meeting to order at 3:06 p.m. Representatives Dahlstrom,
Ramras, Johansen, Edgmon, and Millett were present at the call
to order. Representative Petersen arrived as the meeting was in
progress.
^OVERVIEW: NORTH SLOPE NATURAL GAS PIPELINE PROJECTS
PRESENTATION BY TONY PALMER, TC ALASKA
3:06:18 PM
CO-CHAIR MILLETT announced that the first order of business
would be a presentation by Tony Palmer, TC Alaska.
3:06:43 PM
TONY PALMER, Vice President, Alaska Development, TransCanada
PipeLines Limited (TransCanada), Calgary, Alberta, began his
presentation by remarking that he has reviewed the questions
prepared by the co-chairs of the House and Senate Energy
Committees and will attempt to be responsive to them during his
presentation.
3:07:08 PM
MR. PALMER reminded members he previously discussed some of the
slides in his PowerPoint presentation two weeks ago. Thus, he
planned to quickly cover some of the slides. He referred to
slide 1, titled "TransCanada's Alaska Pipeline Project," which
shows a map of TransCanada's Alaska Pipeline Project, and also
highlights alternatives to deliver gas within Alaska: to Valdez
enroute to the Lower 48, to Asian markets, and also to the
Alberta Hub enroute to the Lower 48. He stated that slide 2,
titled "TransCanada's Alaska Pipeline Project" depicts a map
showing potential pipeline routes.
MR. PALMER discussed slide 3, titled "Project Design," noting it
identifies two alternatives described on the previous map; one
to the Lower 48 via the Alberta Hub, and another to the
liquefied natural gas (LNG) markets via Valdez. He related with
respect to the Alberta Hub, that TransCanada's design has not
changed since its application. He recapped the specifications
of 5 billion cubic feet/day (Bcf/d) for a gas treatment plant,
and 4.5 Bcf/d for a pipeline, and 48-inch diameter at 2500/2600
pounds per square inch gauge (PSIG). However, he noted one
change made after TransCanada held discussions with potential
shippers modified specifications for the pipeline. Thus,
TransCanada will be proceeding with the LNG design at 3 Bcf/d,
with a 48-inch diameter pipeline for the course of the open
season that will be conducted next year. Since technical
viability slides have previously been discussed, he would only
make a brief statement for some slides. He stated that pipe
prices [slide 4] today for delivery to Alaska remain at the same
level as when the Alaska Gasline Inducement Act (AGIA)
application was prepared in Fall 2007.
MR. PALMER referred to slide 5, titled "Economic Technical
Viability - Recent Crude Oil (WTI) Price Forecasts - Jan 09".
With respect to the LNG, TransCanada will not provide an
analysis on the liquefaction plant, ships, or the ultimate
markets, but only for the gas treatment plant and the pipeline.
He emphasized the necessity to provide some proxy with respect
to the LNG component. This slide also depicts the January, 2009
forecast for crude oil prices. He explained oil prices are
expected to range from $80 to $120 per barrel by 2018. If this
forecast is correct, gas prices will have recovered, which would
result in a significant netback for the LNG project, he stated.
He noted that slide 6 "Recent Alberta Hub Gas Price Forecasts,"
shows recent price forecasts by consultants and also examines
all sources of supply and demand for North America including
global LNG and shale. This forecast predicts that by 2018 gas
prices will have recovered and will be "north of $8 at that
time" and if so, will make this an attractive and viable
project, he opined. He referred to slide 7, titled
"Economic/Technical Viability - U.S., EIA Alberta Hub Gas Price
Forecasts," which describes a similar analysis. He pointed out
that the gray lines on the graph depict various consultants that
are listed on slide 6. Additionally, the State of Alaska
(state) provided TransCanada with a specific U.S. Government
Energy Information Administration (EIA) forecast from 2006 to
use in its application. The EIA forecast, the latest one
available as of Fall 2007, is depicted by the green line on the
graph and allows comparison. He pointed out that the red line
shows the most recent EIA forecast completed on December 2008,
which is about $2 in MMBtu higher.
MR. PALMER referred to slide 8, titled "Economic/Technical
Viability - Impact on Project Economics." He explained that the
AGIA application required TransCanada to show the value for
governments and producers using the numbers provided by the EIA.
Using the figures provided by the EIA two years ago, it would
have produced $350 billion. He offered that this provides the
funding source for governments to pay their costs and also would
provide value to them. He referred to the far right column of
the slide, to the most recent forecast labeled "March 2009."
This projects an additional $125 billion, about one-third higher
from the price forecast at the time of the AGIA application, he
noted. He stated slide 9, titled "Project Schedule, Work Plan
and Budget" is the first of the new slides in his presentation.
The blue line represents TransCanada's project timeline,
including schedule, work plan, and budget. He explained that
the license was issued to TransCanada on December 5, 2008. He
stressed that nothing has changed from the initial projection
made during the AGIA process. He commented that TransCanada
originally filed in Fall 2007 and anticipated licensure by April
2008, which was delayed. He offered that this updated schedule
was presented to the Alaska Legislature in June 2008. He
highlighted specific events, noting TransCanada remains on
target to complete its open season by July 2010, that in April
2010, TransCanada will send out proposals to its potential
customers, assuming that the Federal Energy Regulatory
Commission (FERC) has approved TransCanada's open season
procedures. He explained customers would be required to respond
by the end of July 2010. He offered to address the FERC pre-
filing request later in the presentation as it was raised as an
issue.
3:13:26 PM
CO-CHAIR MILLETT asked if TransCanada has a failed open season
in July 2010, whether TransCanada will meet the FERC pre-file
date of April 2011.
MR. PALMER answered yes. He elaborated that under the AGIA
statute and license that TransCanada has an obligation to do so.
He offered that if the project has not advanced as a result of
discussions with FERC, TransCanada still has an obligation under
the AGIA license to meet the pre-filing request and the FERC
filing in 2012, regardless of whether TransCanada has a failed
open season in 2010. He reviewed other events on the timeline,
and reiterated the FERC filing is scheduled for October 2012.
He stated TransCanada is subject to FERC regulations although it
cannot control the timing of events after that date. He
continued by stating TransCanada has projected that FERC would
grant a certificate of public convenience and necessity (CPCN)
by June 2014. So long as TransCanada has customers, and
regulatory approvals by that date, it would move forward to
project sanction in November, 2014. If sanctioned, TransCanada
would move forward with onsite construction in April 2016, with
an anticipated completion date and initial gas in the Fall 2018.
Since the AGIA application contains a comprehensive work plan,
he remarked that he would refrain from discussing that plan
today. He reminded the committee of the reams of papers that
were filed during the AGIA process from the Fall 2007 through
the Summer 2008. He offered the estimated capital cost of the
project was $26 billion and remains so, including over $600
million for development costs through the open season and
regulatory certification. He reiterated that the cost estimates
are unchanged today. He related that TransCanada will complete
a new capital cost estimate in the next 12 months and by March
or April 2010 an update on the $26 billion capital cost estimate
should be available. He offered his belief that he would be
able to share the figures with first potential customers and the
public.
3:16:17 PM
MR. PALMER referred to slide 10, titled "Engineering,
Environmental, Field, Commercial and Regulatory Update - Open
Season Phase 2008 to July 2010." He outlined TransCanada's "Key
Objectives" which include developing a class IV cost estimate to
support the open season. He noted class IV refers to a standard
engineering term related to the level of accuracy for an open
season. Further, TransCanada will continue to identify the
pipeline routing within the study corridor to guide stakeholder
and public engagement. Additionally, this slide identifies the
environmental activities, which he offered to update from the
last briefing. Subsequent to the last briefing, TransCanada met
with the FERC chairman and remains encouraged by the discussions
being held. However, TransCanada has not resolved issues
identified for the committee two weeks ago, he stated. He
remarked that he is optimistic that TransCanada will be able to
resolve issues soon, with respect to an early pre-filing and to
meet the goals of FERC. He underscored TransCanada's goal,
which is to conduct a successful open season.
MR. PALMER referred to slide 11 titled, "TransCanada Open Season
Work Plan (August 2008- July 2010)." He stated that TransCanada
brings significant advantages to this project due to its in-
house expertise and over 2,000 employees that currently
transport 20 percent of North American natural gas. This
expertise and experience means that TransCanada does not have to
build a construction plan "from scratch." He highlighted that
TransCanada has economies of scale which will benefit the
project, was emphasized in its application, and is the primary
reason TransCanada believes it can provide development costs
inexpensively and efficiently. Additionally, TransCanada has
standardized operating and construction procedures in place for
all activities. He remarked that TransCanada runs a major
pipeline system today that is interstate and interprovincial.
Thus, this provides advantages in terms of capital cost
estimates, development costs, and ultimately in terms of the
success of the project. He opined that for these reasons
TransCanada can maintain lower costs while achieving
environmental and safety standards. He stated the capital costs
are benchmarked as lower than its competitors in the U.S. and in
Canada. Additionally, TransCanada's operating costs will be
lower, which was previously outlined for the legislature.
Further, TransCanada is a proven leader in development of U.S.
and Canadian interstate and interprovincial natural gas
pipelines, he stated. Finally, TransCanada has major gas and
oil pipelines underway and was the recipient of the 2008 Global
Pipeline Award for leading edge technology, which is applied to
maintain low costs and to continue to advance the efficiency of
projects.
MR. PALMER referred to slide 12, titled "Engineering,"
explaining he previously noted that TransCanada commenced the
project after the Alaska State Legislature's approval last year.
Since reimbursement under AGIA did not commence until December
5th, 2008, TransCanada has not submitted its first billing, but
anticipates the bill will be forthcoming next week and will
cover costs through the end of March 2009. He offered his
belief that the estimate provided several weeks ago remains
TransCanada's best estimate. He reviewed engineering aspects,
including that TransCanada performed aerial photography for both
alternatives "before the snow flew," which enabled them to
perform desk work this winter. He explained that TransCanada
commenced the borehole work on geotechnical work along the
right-of-way and as of last week has conducted 120 borehole
samples and expects to complete the remainder this month. He
stated that it has collected arctic engineering test data and
research on frost heaves. He anticipated that over the next
quarter TransCanada will complete its winter geotechnical field
program and terrain mapping in Alaska, will determine necessary
requirements for a summer geotechnical field program in Alaska,
and will continue route reconnaissance and corridor selection in
Alaska, as well. As previously stated, TransCanada let the
contract for the pre-feed work on the Gas Treatment Plant (GTP)
to URS [Alaska] and work has commenced. Additionally,
TransCanada made its initial contacts with the Prudhoe Bay and
Point Thompson operators and hopes to conduct interface meetings
shortly.
MR. PALMER referred to slide 13, titled "Environmental." He
pointed out for any members not familiar with gas pipelines that
photographs on this slide illustrate examples of the actual work
performed during construction at an open river crossing. He
remarked that lots of digging is involved. He pointed out that
the photograph on the right shows what the area looked like
after the pipeline is "in the ground and re-vegetated," which is
what the pipeline will look like after it is completed. Next,
he noted the photograph demonstrates that no evidence of
construction remains except for the "cut line" through the
trees. He explained work that was performed from August 2008
through the first quarter of 2009, including that TransCanada
has established a Global Information System (GIS) platform to
support planning and permitting. He noted TransCanada also has
provided preliminary environmental constraints information for
Alaska routing, Alaska and Canada construction planning, and has
completed an initial route update review in Canada. He pointed
to the right side of the slide to the outlook for the second
quarter of 2009. He anticipated that TransCanada will complete
environmental information needs analysis with the regulatory
agencies to support construction planning, cost estimates, and
environmental work planning. Additionally, TransCanada will
commence development of a request for proposal (RFP) for
TransCanada's environmental contractor, which should be issued
in the third quarter of 2009.
3:23:06 PM
MR. PALMER referred to slide 14, titled "Regulatory/Permitting"
and stated that during the period from August 2008 through the
first quarter of 2009 TransCanada performed preliminary
environmental permitting strategy for Alaska and Canada, and
submitted all permit applications to support winter geotechnical
program for a list of agencies listed on the slide such as North
Slope Borough, Department of Natural Resources (DNR), Alaska
Department of Fish & Game (ADFG), U.S. Fish and Wildlife Service
(USFWS), U.S. Department of the Interior, Bureau of Land
Management (BLM). Additionally TransCanada completed the
permitting for the winter geotechnical field program. He
pointed out the right hand side of the slide, which provides an
outlook for the second quarter of 2009. He explained that
TransCanada will continue ongoing FERC discussions with respect
to the pre-file date, and will continue multi-department
engagement with the Northern Pipeline Agency (NPA) in Canada.
He noted he will elaborate on the Canadian aspects later in the
discussion. Additionally, TransCanada will continue discussions
with individual agencies to update environmental information
needs analysis for the U.S. and Canada.
MR. PALMER referred to slide 15, titled "Regulatory/Permitting
(cont'd)," and stated that he would not review the individual
meetings that were held but noted that TransCanada already
conducted multi-agency meetings in the U.S. beginning in
January, and in Canada commencing in March 2009. The slide
listed dates and U.S. multi-agency meetings, as follows:
January 5- FERC
January 6- in Washington, D.C; Office of Federal
Coordinator, Departments of Defense, Homeland
Security, Interior Transportation, Commerce, State,
Treasury, Advisory Council on Historic Preservation,
Environmental Protection Agency, FERC, Council on
Environmental Quality, Office of Management and
Budget.
January 14/15 -in Anchorage/Fairbanks; JPO/SPCO, ADNR,
ADOT, ADF&G, SHPO, ADEC, NOAA, EPA, DOI(BLM), OFC,
USFWS & University of Alaska Fairbanks
February 25 and March 9 - NPA engagement meetings - in
Ottawa
March 10 - FERC
March 16-19 - continued multi-agency meetings in
Anchorage and Fairbanks
MR. PALMER stated slide 16, titled "Commercial" depicts a
photograph of the road along the side of the construction trench
and on the right hand side shows a compression station. He
predicted that five or six compression stations of this size and
scale will be located approximately every 120 miles in Alaska.
MR. PALMER offered a reference for scale, such that the
photograph of the compression station shown is about 1000 feet
by 1000 feet. He indicated that the larger building shown is
the compressor building, which is about twice the height of a
two-story building or one-sixth to one-eighth of the height of a
megawatt wind station tower. He offered that TransCanada is
also building a huge number of wind towers in Canada. He
suggested for those interested in the environmental footprint
that compressor stations similar to this would be located along
the right-of-way about every 120 miles.
MR. PALMER referred to the right hand portion of slide 16, to
the outlook for the second quarter of 2009. He stated that
TransCanada has commenced discussions with potential shippers,
which was previously described two weeks ago. He explained that
TransCanada will soon "kick off the In-State Gas Study" and has
already sent out requests to interested parties, received
responses, and anticipates awarding the contract later this
month. He stated that TransCanada will continue discussions
with potential shippers, and to will develop plans for the open
season. He listed steps toward open season for those not
familiar with the pipeline business, such as that TransCanada
will "flesh out" the commercial terms, conditions, and precedent
agreements for potential customers. Those agreements must be
filed with FERC, and contain the specifics that will be sent to
customers a year from now, he stated.
MR. PALMER noted that slide 17, titled "Canadian Authorizations
and Right-of-Way," emphasized an important factor and
differentiates TransCanada from the other party proposing to
advance an Alaska gas project through Canada. He highlighted
and reemphasized what was presented two weeks ago, that project
delays are the critical factor in final capital costs. He
reminded members about the MacKenzie Project, which is in its
sixth year of regulatory review. He detailed that the filing
was made under the National Energy Board (NEB) six years ago,
with a decision anticipated by the end of this year. He asked
to compare and contrast that with what TransCanada has in place
under the Northern Pipeline Act (NPA). Further, he stressed
that TransCanada has sole access to specific legislation,
regulations, and right-of-way for this project in Canada. He
explained that the NPA was passed in 1978, approximately 19
years after the National Energy Board Act (NEBA) was passed. He
recalled that some people believe the NEB structure is the model
for the modern structure. However, he pointed out that the NEB
was passed 19 years after the NEBA. The NPA is specific to this
project, and is similar to specific legislation for the Alaska
Natural Gas Pipeline Act of 2004 (ANGPA). This project is
available only to TransCanada by the treaty that sets out the
rights and responsibilities of both countries, Canada and the
U.S. for this project. He stated TransCanada's subsidiary
"Foothills" is the named party in the treaty as the Canadian
sponsor of the project. He cautioned that other parties that
wish to "move gas from Alaska through Canada and back into the
U.S." will have substantial issues to resolve. He referred to
the NPA, pointing out that it is a single-window regulatory
agency available only to TransCanada, that TransCanada has a
proven track record with the pre-build in 1981 and 1982, and for
the five expansions through 1998. Furthermore, TransCanada
holds the certificate of Public Convenience and Necessity for
this project in Canada. He asked members to contrast
TransCanada's advantage with what any other party would have to
achieve. He opined that TransCanada has exclusivity to build
this pipeline. He related that the re-staffing of Northern
Pipeline Agency is underway. Additionally, TransCanada has held
rights-of-way through the entire Yukon province in Canada for
approximately 25 years, which again is exclusive to TransCanada.
3:30:17 PM
MR. PALMER referred to slide 18, titled "Canadian Authorizations
and Right-of-Way," and mentioned steps TransCanada has taken
with respect to First Nations. In addition to holding the
rights-of-way through the Yukon the NPA also sets out specific
terms, conditions, and benefits for First Nations. He stated
that TransCanada has commenced negotiations on participation
agreements to supplement the NPA terms and conditions for First
Nations. He pointed out that letters were sent to all eight
First Nation organizations just over a month ago, that positive
responses were received from a quarter of them, and TransCanada
has begun negotiations with them. Additionally, TransCanada has
50 years of environmental experience in Canada and about 40
years of experience in the U.S, he related. He also emphasized
that TransCanada has proven expertise with FERC and Canadian
forums, and in Canada the "go/no go decision" has already been
made, which once again is exclusive only to TransCanada, he
opined. He detailed TransCanada's successful experience with
previous pipelines, such that it has built 7,000 miles of
interstate and interprovincial pipelines in the 1990s on
schedule and on budget. He specified that a $12 billion, 4,000
mile pipeline is currently under construction, which represents
about half the total cost of this proposed project. He opined
that TransCanada has constructed projects that are longer and
more technically challenging than the proposed Alaska natural
gas pipeline project, noting TransCanada's experience spans over
50 years.. He pointed out that TransCanada currently transports
two-thirds of Canadian gas and approximately 20 percent of North
American gas. He offered to compare and contrast TransCanada's
performance against any other party in the industry.
MR. PALMER referred to slide 19, titled "LNG." He stated that
in the initial open season potential shippers will have an
opportunity to nominate gas deliveries to points within Alaska,
within Canada, to Asia and the Lower 48 via Valdez, and also to
the Lower 48 via the Alberta Hub. He noted that TransCanada
would only complete the gas treatment plant and the pipeline,
but not the liquefaction, shipping, or downstream facility. He
related that TransCanada has commenced the necessary design,
engineering, environmental, field and commercial work to provide
potential customers with Capital Cost Estimates (CAPEX), tolls,
and commercial terms for the LNG alternative at the same time it
would provide information for the Alberta Hub.
MR. PALMER referred to slide 20, titled "Timing of Initial Open
Season, FERC Pre-filing, FERC Application." He explained that
information has been covered in slide 9 of his presentation, but
recapped significant dates noting the initial open season must
be concluded by July 2010, the FERC pre-filing request is
scheduled in 2011, and that TransCanada is currently in
discussion with FERC as to whether the specific timing would be
advanced. He reiterated the FERC filing is due in 2012,
regardless of whether the initial open season is successful. He
offered that if the open season is unsuccessful, that
TransCanada will hold discussions with potential customers on an
ongoing basis. He also stressed that TransCanada is committed
to hold subsequent solicitations of interest to customers at
least every two years.
3:34:14 PM
MR. PALMER referred to slide 21, titled "Gas Treatment Plant
(GTP)," stating that the design was addressed in slide 3 for the
Alberta Hub and LNG options. He stated that TransCanada will
develop and own the plant only if necessary. He related that
TransCanada has commenced work on GTP for the initial open
season since no other party has come forward to indicate it is
prepared to own it. He reminded members the pre-feed contract
has been awarded to URS Corporation in March 2009, and that a
subsidiary of Arctic Slope Regional Corporation (ASRC), ASRC
Energy Services, will subcontract for them.
MR. PALMER referred to slide 22, titled "Cost Analysis," and
remarked that TransCanada's estimated the project costs at $26
billion in its application in November 2007, including $600
million for development costs through the initial open season
and for regulatory certification. He offered his belief that
one of the principal reasons that TransCanada can keep the
development costs low is because of its experience and
expertise. While there are not any changes to these estimates
at present, TransCanada will have completed an estimate a year
from now, which will be shared with the public. In the event of
capital cost overruns, the AGIA provides for a proposed return
reduction in the AGIA application, as well as the work plan,
management oversight, and track record for controlling costs.
MR. PALMER referred to slide 23, titled "In-State Gas
Deliveries." He mentioned that TransCanada's AGIA application
committed to five delivery points in Alaska and a single
distance-sensitive rate, subject to FERC approval, for Alaska
consumers. The status is unchanged. He commented that
TransCanada hopes to award the in-state study soon, anticipates
the study will be completed later this year, and the results
will assist TransCanada with definite delivery points and will
also determine the distance-sensitive rate.
MR. PALMER referred to slide 24, titled "Alaska
Contractors/Suppliers."
REPRESENTATIVE DAHLSTROM asked whether TransCanada has a list of
out of state contractors and if TransCanada has signed a
commitment with Bechtel Corporation.
3:37:19 PM
MR. PALMER answered no. He explained that URS was selected for
the GTP and Colt WorleyParsons for the AGIA pipeline. He
elaborated that these parties are performing the pre-feed work
on the GTP and the AGIA pipeline at this time.
MR. PALMER referred to slide 25, titled "Alaska Headquarters,
Alaska Hire, Project Labor Agreement for Construction." He
explained that the AGIA application indicated that TransCanada
expected all of the work to be performed in Calgary through the
open season process. However, he offered that TransCanada has
opened an office in Alaska; TransCanada signed the lease on
December 1, 2008, and the Anchorage office opened in February
2009. He stated that approximately 42 Alaskans were hired in-
state, either directly by TransCanada or by its contractors. He
explained that TransCanada has participated in alignment
meetings with the Alaska Department of Labor & Workforce
Development. He added that the 42 employees that were hired are
in addition to the URS employees.
MR. PALMER referred to slide 26, titled "Alaska Headquarters,
Alaska Hire, Project Labor Agreement for Construction (Cont'd)."
He explained that TransCanada has reimbursement agreements in
place with Alyeska, BLM (Alaska), and the Joint Pipeline Office
(JPO). He noted that these agreements were necessary in order
to perform the geotechnical work this winter. He pointed out
the considerable effort undertaken after TransCanada's licensure
in December 2007 that went into securing reimbursement
agreements to complete the winter program. He pointed out the
Project Labor Agreement (PLA) for Construction is required for
the construction phase of the project and is set out in the AGIA
statute. He noted that TransCanada has met with Alaska labor
leadership to discuss initial plans and the path forward towards
construction phase. He mentioned TransCanada held numerous
meetings with communities and groups, as well as an LNG
information meeting in Valdez.
MR. PALMER referred to slide 27, titled "Project Ownership and
Construction." He stated that at present TransCanada is the
sole project sponsor. He stressed TransCanada's preference for
other parties to develop and construct the GTP, although he
indicated TransCanada will do so if necessary. He related that
TransCanada has clearly stated for the past 18 months that it
will offer an equity opportunity to shippers in the initial open
season that subscribes to a threshold volume. He offered that
TransCanada held discussions with potential shippers and several
that have expressed an interest in becoming a shipper and equity
partner with TransCanada. Others have not, he noted, but
discussions are ongoing. He opined that the initial open season
will determine if parties wish to take up the opportunity.
3:41:47 PM
MR. PALMER referred to slide 28, titled "TransCanada's
Readiness, Financial Capacity and Technical Ability," noting
that he discussed this at a prior meeting two weeks ago. He
mentioned that TransCanada's AGIA application comprehensively
set out its readiness, financial and technical capacity. He
explained that this slide outlines recent access to capital
markets. He noted that TransCanada issued $5.5 billion
Canadian, and $4.4 billion U.S., since November 2008. He
offered that the proposed TransCanada Alaska pipeline would have
access to the $18 billion U.S. Federal Loan Guarantee, that
financing will commence at the decision to proceed, some five
years out.
3:42:20 PM
MR. PALMER referred to slide 29, titled "Website." He revealed
that TransCanada's website is available for interested parties
at www.transcanada.com and by clicking on the Alaska Pipeline
icon. He provided some details on e-mails that the TransCanada
website has received. Overall, TransCanada's website has
received 110 e-mails and each one has been answered. He
estimated an average of 21 emails per month, with about 21
percent generated in Alaska, a larger number from the Lower 48,
and some from Canada. The e-mails request information on a
variety of topics ranging from contract vendor and job
opportunities to general project information.
MR. PALMER referred to slide 30, titled "Summary." He recapped
his presentation by stating that the AGIA bill was approved, the
license was issued, and TransCanada's commitment remains
unchanged. He offered that TransCanada is aggressively
advancing the project on all fronts. He stated that TransCanada
has solid access to capital markets and current gas price
forecasts of $125 billion to producers and governments as
compared to the projections in its application filed some 18
months ago. He opined that major projects like this one succeed
or fail based on long term project economics and not short term
swings in natural gas prices. He informed members that
TransCanada will keep the legislature regularly informed, and
that TransCanada remains focused on costs, schedules, and
attracting customers. He offered his belief that is what will
allow this project to become a success, not just for Alaska and
TransCanada, but for the North American market.
3:44:28 PM
CO-CHAIR EDGMON mentioned that Senator Begich addressed the
legislature earlier today and expressed a growing concern in
Washington D.C. about the pipeline.
MR. PALMER recalled the comment. He stated that TransCanada has
not been active in Washington D.C. since the election, although
TransCanada has met with staff several times. He offered his
belief that TransCanada's president has met with U.S. Senator
Begich in an introductory meeting. He related that the
administration has expressed support for the project, but has
not indicated what form the support will take. He remarked that
TransCanada is interested in following up on the discussions
with the administration. He reiterated that TransCanada's
commitment for the TransCanada Alaska Pipeline Project. He
recalled that Senator Begich also identified some support for
the project. He noted that climate change should be positive
for the natural gas business, generally. He specified that some
form of bridge fuel is necessary to get to renewable energies.
He opined that TransCanada believes that natural gas is the
appropriate fuel for that bridge, not just for this project, but
for shale gas and conventional Lower 48 gas. He pointed out
that this project must also compete with shale gas, global LNG,
and conventional Lower 48 and Western Canadian gas. He
predicted that if TransCanada can maintain its schedule and keep
costs under $3 that Alaska gas will compete very well in the
global market.
3:46:50 PM
CO-CHAIR MILLETT asked Mr. Palmer to elaborate on First Nations
dialogue. She expressed concern that some issues and access to
First Nations' lands may exist.
MR. PALMER referred members back to slide 17, and to the Right-
of-Way bullet. He reminded members that TransCanada received
the rights-of-way for the entire Yukon province in 1983. Thus,
the right-of-way has been held for some 25 years. Ten years
after the right-of-way was secured, the umbrella final agreement
was reached between the government of Canada, the government of
the Yukon Territory, and all Yukon First Nations' governments.
That agreement recognized TransCanada's right-of-way, and in
fact, as every First Nation's land claim has been settled along
the right-of-way, there has been a specific carve out of the
TransCanada right-of-way. He offered that six of the eight
First Nations' governments have settled land claims. Two First
Nations government's have not and these two remaining First
Nations governments must agree with Canadian government, not
TransCanada. Once completed, he offered his belief that the
TransCanada right-of-way will be "carved out" since it is
recognized in the final agreement. He opined that TransCanada
is in a very different circumstance than the McKenzie Gas
Project. He explained that the four major oil companies that
comprise the McKenzie Gas project had to first obtain access and
benefits agreements. He pointed out that TransCanada has access
with the rights-of-way secured. He inquired as to the benefits
to the First Nations from this project, then answered that the
NPA set out in its terms and conditions benefits for the First
Nations in documents that have been public for over 30 years.
He asserted that TransCanada is prepared and has openly offered
by letter to improve the benefits to the First Nations if they
wish to sign a participation agreement with TransCanada. He
reiterated that half of the First Nations' governments have
expressed interest and that two have commenced negotiations in
this first month. He opined that in the event TransCanada is
successful in signing participation agreements in the next 12
months, it would be positive for the project. If not,
TransCanada will rely on the already established legal terms and
conditions approximately 30 years ago. He offered his belief
that TransCanada is in a strong legal position with respect to
the issue of First Nations.
3:49:45 PM
CO-CHAIR MILLETT recessed to the call of the chair at 3:49 p.m.
^OVERVIEW: NORTH SLOPE NATURAL GAS PIPELINE PROJECTS
PRESENTATION BY BUD FACKRELL, DENALI PIPELINE PROJECT
4:39:47 PM
CO-CHAIR MILLETT reconvened the meeting at 4:39 p.m.
BUD FACKRELL, President, Denali - The Alaska Gas Pipeline
(Denali), began his presentation by introducing himself. He
offered that his slide presentation should answer the 20
questions the committee co-chairs previously submitted to him.
MR. FACKRELL referred to slide 2, titled "Denali - On track for
success." He explained the Denali - the Alaska Gas Pipeline
(Denali) timeline, such that the first major milestone is to
conduct an open season in 2010. He related that Denali is on
target for that projected milestone. He explained the Denali
organization is already in place. He offered his belief that
when the Denali project is viewed from a macroeconomic
standpoint, that the project is economically viable and has a
place in the Lower 48 supply and demand for natural gas. He
noted that with the economic downturn, price of natural gas
requires a long-term view.
4:40:53 PM
MR. FACKRELL pointed out that the project has to be economic and
must be able to compete with other sources of gas. He mentioned
that shale gas is a real resource base, and Denali will need to
compete with shale gas, conventional gas, and LNG imports. He
offered his belief that there is significant increase in LNG
import capability in the U.S. today. He opined that the theme
in Washington, D.C. from the new administration is that natural
gas is a bridging fuel to the renewable resources. Since Alaska
has an abundance of natural gas, it is likely that this project
fits in the administration's theme. However, the present
economy cannot be ignored, he cautioned. While Denali tends to
focus on a long-term view, the existing gas price and costs
could burden any project. He stated that part of Denali's focus
is to meet the schedule and maintain costs as low as possible to
move the project through open season. He reiterated that Denali
is committed to their schedule, despite the downturn in the U.S.
economy.
MR. FACKRELL referred to slide 3, titled "Denali Project
Description." He explained that the project begins on the North
Slope with a gas treatment plant (GTP) at Prudhoe Bay. The GTP
is intended to remove impurities, such as carbon dioxide, and to
dehydrate, compress, and chill the gas. He reminded members
that once built the plant will be the largest GTP of its kind in
the world. He provided an historical perspective on plants such
that in 1977, the Prudhoe Bay compression station was the
largest treatment plant built, and when built in 1986, the NGL
(CGF) and was the largest of its type in the world. He remarked
that the proposed GTP would be larger than the above two plants
combined. He commented that the GTP provides a large component
in the project. He explained overall components of the proposed
pipeline such that it will be a large diameter, high pressure,
buried pipeline. The proposed route would follow the
TransAlaska Pipeline System (TAPS) to Delta Junction and then
would follow the Alaska-Canadian Highway (ALCAN) to Alberta,
Canada, and that he would discuss other options later in the
presentation. Since the distance to Albert is approximately
2,000 miles, compressor stations will be built about every 100
to 200 miles at 40,000 horsepower (hp) each. If the pipeline
were extended into the Lower 48 an additional 1,500 miles of
pipeline would be required. He highlighted the key slide in his
presentation is slide 4, titled "The Denali Project - 4 BCFD to
North American consumers," which shows a map of the Denali's gas
pipeline that would provide 4 Bcf/day of natural gas to North
American consumers, which is about 6 to 8 percent of the current
U.S. daily consumption. He opined that the size of the project
is primary reason why this project is on President Obama's list
as a clean energy project.
MR. FACKRELL noted the darker line on slide 4 shows the proposed
Denali pipeline as it follows the TAPS line, then travels along
the ALCAN Highway. He explained that an existing hub in Alberta
would allow gas to flow into the Alberta Hub or potentially into
a new proposed pipeline to the Lower 48. He noted that the flow
would be dictated by shippers who will inform Denali as to
whether they want to pay tariffs in the existing Alberta Hub or
whether tariffs offered in the new proposed pipeline to the
Lower 48 would be more advantageous.
MR. FACKRELL referred to slide 5, titled "Denali Terms of
Service." He opined that a significant point is that Denali is
an open access pipeline under the law. He recalled hearing
rumors that the pipeline would not be open access. However,
that is not so, he stated. He asserted that the bill passed by
the Congress dictated open access, and the FERC put in place the
rules to ensure open access to the pipeline. He reminded
members of testimony given during the AGIA debate by FERC
Director, Office of Energy Projects, Mark Robinson, from
testimony given during the AGIA debate, and read, "People have
open access to the pipeline, not just the producers." He
asserted that open access is important from the perspective of a
pipeline company. He outlined other terms of service for the
proposed Denali Alaska gas pipeline: that the proposed Denali
gas pipeline would provide distance sensitive transportation
rates for local use; would provide for efficient expandability,
would solicit shippers every two years regarding expansion;
would provide at least five offtake points; and would provide
offtake points in Canada, if warranted.
MR. FACKRELL referred to slide 6, titled "Regulatory Framework -
Canada and U.S." He illustrated regulatory frameworks in Canada
and the U.S. He explained that two regulatory frameworks are
available in Canada, explaining that the Northern Pipeline Act
(NPA) is exclusive to one party, and Denali would not file under
the NPA. He offered that the National Energy Board Act (NEBA)
has been in existence for some time and continues to modernize
its rules, including incorporating the latest environmental laws
in Canada. He noted that Denali would follow the National
Energy Board (NEB) process.
MR. FACKRELL stated that the pipeline process in the U.S. is
controlled by the FERC. Thus, a certificate would have to be
garnered from the FERC. He asserted that the AGIA is not an
exclusive license to build a pipeline. He stated that Denali
will move forward outside the AGIA.
MR. FACKRELL referred to slide 7, titled "Denali Progress - Key
Accomplishments." He listed the key accomplishments detailed on
the slide. He stated that Denali has spent $55 million in 2008
on the project. Denali has mobilized its project team,
established headquarters in Anchorage, established Canadian
Headquarters, obtained approval of the FERC pre-filing request;
filed right-of-way on federal lands with the BLM, held a
successful 2008 summer field program, conducted community
outreach meetings in Alaska and Canada, established an
Archeology Technician program with UAF. Additionally, Denali is
an active member of Alaska Department of Labor & Workforce
Development task force, Denali met with state, federal, and
Canadian government officials, Denali awarded two major
contracts for the GTP and the pipeline, and Denali has performed
preliminary engineering for the proposed pipeline.
MR. FACKRELL expanded on Denali's key accomplishments,
explaining that Denali has 90 to 100 people in its core team in
Alaska, Canada, with a few people located in Houston, Texas. He
offered that about 80 personnel are located in Alaska and the
core team will remain constant. Additionally, dozens of other
contractors are working on a variety of projects associated with
Denali. The Anchorage office is approximately 40,000 square
feet of office space in January at the new building located at
188 Northern Lights Boulevard, he mentioned. Additionally
Denali has a building located in the Gulf Canada building in
Calgary. He noted that the federal ROW represents about a third
of the federal land in Alaska, which is a key piece of Denali's
pipeline right-of-way.
4:50:11 PM
MR. FACKRELL referred to slide 8 titled, "FERC Pre-filing and
BLM Right-of-Way Application." He related that Denali filed
early at the advice of FERC, which provides Denali with a
distinct advantage. He explained other benefits to pre-filing
include Denali's established working relationship with FERC. He
related that the BLM established a formal process to use BLM
resources and reimburse them for right-of-way. He anticipated
Denali signing the reimbursable services agreement (RSA) with
the BLM in the next week or so.
4:50:49 PM
REPRESENTATIVE JOHANSEN recalled earlier testimony that Denali
does not want to spend any more money than is necessary. He
also recalled TransCanada's testimony such that it chose not to
pre-file because of the expense involved. He inquired as to the
reason Denali chose to pre-file given the cost involved.
MR. FACKRELL answered that first, pre-filing is a requirement
for the FERC process. Secondly, he stated that the FERC advised
Denali to pre-file, which it has found it to be very beneficial.
He reiterated Denali's focus on containing costs and meeting its
schedule. However, he stressed that Denali has found the pre-
filing to be beneficial since it helps it to align resource
reports and maintain ongoing conversations with FERC as the
project moves through the process.
4:51:53 PM
REPRESENTATIVE JOHANSEN understood that pre-filing prior to open
season is a more expensive route to take.
MR. FACKRELL answered that Denali does not view pre-filing with
FERC as an extra expense. Due to the size of the project, the
dialogue with FERC regulators is valuable. Thus, he offered his
belief that the pre-filing costs will be beneficial to the
overall project. In further response to Representative
Johansen, Mr. Fackrell explained that BP Exploration (Alaska)
Inc. and ConocoPhillips have expertise since they operate over
50,000 miles of pipeline around the world. Further, he stated
that these companies have a pipeline company in the Lower 48
that routinely work with FERC. Thus, he emphasized that Denali
is very comfortable with the FERC process.
4:54:01 PM
CO-CHAIR MILLETT asked for a comparison of the costs to pre-file
now as to postponing pre-filing later on in the process. She
inquired as to whether it would cost more for Denali to pre-file
now.
MR. FACKRELL responded that the costs would be incurred either
way. He agreed that Denali, or any company, would not want to
incur costs until necessary. However, Denali deemed that given
the magnitude of this project that contact with FERC early on
would make them a partner in the process, he stated. Thus, the
advantage in incurring costs now for pre-filing was warranted.
MR. FACKRELL referred to slide 9, titled "2008 Work." He
reiterated that Denali spent $55 million in 2008. He maintained
that Denali had an outstanding safety record, with no injuries
this season. He related that Denali opened field office in Tok,
Alaska. He summarized the summer field work performed, stating
that a majority of the work centered on a 200-mile corridor
between Delta Junction and the Canadian border, that Denali
surveyed over 200 miles of wetlands, investigated 70
archeological sites, shot over 1,700 miles of ortho-photography
from a fixed-wing plane, and shot over 730 miles of immersive
video from a helicopter. Additionally, Denali performed
engineering route reconnaissance work, he stated. He also
opined that Denali has a good base to move forward to open
season, with a minimal need to perform any additional field work
in Alaska.
MR. FACKRELL presented slide 10, titled "Who's Been Working with
Denali." He described many of the over 30 contractors listed as
"good, Alaskan companies" and also that some of the companies
listed are Canadian companies. Further, additional information
is available on the Denali website, he noted.
MR. FACKRELL referred to slide 11 titled "Two Major Engineering
Contracts Awarded." He emphasized that the two major
engineering contracts awarded represented a milestone for
Denali. He elaborated on the contract with Fluor WorleyParsons
Arctic Solutions, as a joint venture between Fluor and
WorleyParsons for the GTP. The engineering companies will help
build a cost and schedule for the project. He surmised that
WorleyParsons has designed and built more facilities than anyone
else. Secondly, Denali recently signed a contract with Bechtel.
He gave details on Bechtel, such that it is a worldwide
construction company, with expertise with pipelines and will
supplement the pipeline team.
MR. FACKRELL presented slide 12, titled "2009 Plans Focused on
Open Season." He told members that the program is much broader
than its 2008 program. He related that Denali is focused on
cost, schedule, and pre-filing requirements. Its efforts are on
providing the best cost estimate it can given the project as it
is today. He explained that it wants its shippers to have
confidence that Denali has "worked this." In 2001 - 2002, the
producers spent $125 million over an 18 month period on an
overall cost estimate, which is being expanded today. He opined
that Fluor WorleyParsons and Bechtel will be instrumental in
building that cost estimate. He mentioned ongoing work with
DNR, FERC, NEB, and the Office of the Federal Coordinator (OFC).
He noted that Denali will continue to work to meet its FERC pre-
filing requirements and will engage the FERC third-party
environmental contractor. He acknowledged costs are associated
with this, but offered that the contractor will be instrumental
in the environmental impact statement (EIS) for the project. He
listed steps to a successful open season, such as working with
AKDOTPF infrastructure for roads, bridges, and ports, as well as
field work in Canada. He offered praise for the collaborative
effort it has undertaken with Workforce Development, including
the UAF, Department of Labor & Workforce Development (DLWD), and
the survey crew training. He opined that the effort being made
is an effort to reach a project labor agreement (PLA), but is to
develop the work force and negotiate the PLA at the appropriate
time. Another important piece of the process is the stakeholder
engagement in Alaska and Canada. Finally, he stated that Denali
will progress the commercial work that underpins an open season,
including putting together its office.
MR. FACKRELL related that slide 13, titled "Denali is the only
project proponent that..." and listed reasons Denali has
distinct advantages over other proponents. He emphasized that
Denali's producers have decades of Alaskan, Canadian, and Arctic
construction and operational experience; that Denali has the
desire and experience to construct and operate the GTP; that
Denali has already pre-filed with the FERC; that Denali is the
only company that has established a significant Alaska
headquarters office; and Denali is only spending its own money
to move the project forward. He stressed that Denali cannot
ignore the economic environment today, but will maintain its
long-term focus. He further stressed that Denali will be
careful with expenditures and exercise effective cost
management.
5:03:12 PM
CO-CHAIR EDGMON recalled TransCanada's testimony today and asked
Mr. Fackrell to address how Denali will handle the Canadian
rights-of-way and permits.
MR. FACKRELL reminded members the two routes that are possible
to authorize a process in Canada are the NPA and the NEB
processes. He acknowledged that the NPA is exclusive, but
stated that the NEB process is open to any party. He pointed
out that BP and ConocoPhillips currently have operations in
Canada. Additionally, Denali also has personnel in Canada and
is interacting with the NEB, the Canadian Environmental Agency
(CEA), and with the Yukon Environmental and Socio-Economic Board
(YESAB). He said Denali is pleased with the interactions and
progress thus far. He remarked that the NEB process is very
similar and closely aligned to the FERC process.
5:04:57 PM
REPRESENTATIVE JOHANSEN recalled slides 17 and 18 of
TransCanada's presentation, pointing out the numerous times the
Canadian authorizations under NPA seem to be exclusive to
TransCanada. He speculated that the only reason anyone could
compete would be through another path.
MR. FACKRELL affirmed that Denali would follow a path without
exclusive rights. He explained that Denali would not have spent
the money it has thus far if Denali did not believe another path
existed for approval. He insisted that no exclusivity exists
for building a pipeline in Canada. He relayed that Denali has
held conversations with the NEB and clearly another path exists,
which is set out in the NEB process. He acknowledged that the
NPA process is exclusive, and then reiterated that a second
process, the NEB process exists, and is the one Denali would
use.
5:06:12 PM
REPRESENTATIVE PETERSEN referred to slide 5. He suggested one
concern raised is that the producers would fill the line with
their own gas, which would result in less exploration by smaller
companies resulting in less development in oil & gas fields in
Alaska. He asked if Denali is an open access pipeline, what the
shipping price will be and if it could be competitive with
TransCanada. He expressed interest in encouraging exploration
in Alaska.
MR. FACKRELL responded that Alaska Natural Gas Pipeline Act of
2004 (ANGPA) specifically addresses that point and is the law
that will prevent Denali from keeping out competitors. He
acknowledged that concern about blocking exploration was shared
by the Congress. Thus, the Congress gave stewardship to FERC to
write the rules to insure that doesn't happen. He expanded on
this, explaining that Denali will undergo the same open season
that TransCanada will undergo. He speculated that it would be a
fair process, that Denali would be scrutinized even more than
TransCanada, but that FERC will govern that overall process. He
reiterated that this is the law, that the Congress has the
responsibility to insure that whoever operates the pipeline does
not stifle exploration on the North Slope.
5:08:55 PM
MR. FACKRELL, in response to Representative Johansen, referred
to slide 12 and agreed that Denali would work with the OFC.
5:09:18 PM
CO-CHAIR EDGMON asked if any scenario could be imagined in which
Denali would partner with TransCanada.
MR. FACKRELL answered that the Denali owners have expressed a
willingness to entertain any partnership that would reduce risk
and add value to the pipeline project. He opined that since
TransCanada is an AGIA licensee, and is being paid by the State
of Alaska (SOA) that it is obligated to the terms and conditions
of AGIA. He asserted that Denali is not subject to AGIA.
Further, Denali's owners did not file an application under AGIA
because they did not believe it would result in a viable
pipeline. However, he reiterated that Denali remains open to
anyone who could add value and reduce risk.
5:10:38 PM
CO-CHAIR EDGMON asked what stage in the project Denali could
determine whether TransCanada would be considered a worthy
partner, such that TransCanada might be able to offer cost
efficiencies.
MR. FACKRELL referred to the Denali timeline. Currently, Denali
is focused on an open season, holding an offering, and obtaining
commitments from potential shippers. He emphasized that not
enough gas exists for two pipelines. He offered that once
Denali and TransCanada are past the initial open season more
information on how to proceed would be available. He offered
his belief that currently, no advantage exists for Denali to
partner with TransCanada, but serious impediments exist under
AGIA. In further response to Co-Chair Edgmon, Mr. Fackrell
contended that the BP and ConocoPhillips have built big projects
worldwide, with expertise to build a complex project like this
pipeline. He expounded that BP and Conoco have over 50,000
miles of pipeline throughout the world. He detailed that BP
currently operates a 1,000 mile oil and gas pipeline from the
Caspian Sea to the Mediterranean Sea through three countries.
He reemphasized that Denali possesses the expertise.
Additionally, Denali companies built the North Slope facilities.
He offered that Denali's personnel are ready and eager to build
this pipeline.
5:14:37 PM
REPRESENTATIVE PETERSEN asked for more details on obtaining the
permits in Canada.
MR. FACKRELL clarified that the NEB process is available to
anyone. He answered that either the NPA or NEB process can
issue a certificate for a pipeline. While the NPA process is
exclusive to TransCanada, the NEB process is availability to
anyone, he stated.
5:15:43 PM
CO-CHAIR MILLETT asked whether Denali is in contact with the
First Nations.
MR. FACKRELL answered yes, that Denali has met with First
Nations. He stated that Denali continues to have dialogue with
First Nations along the proposed route. He reminded members
that BP and ConocoPhillips are established entities and offered
that Denali will focus on and build on these relationships in
Canada in 2009.
5:16:41 PM
CO-CHAIR MILLETT asked for suggestions for the next step in the
process for Alaska and whether the state needs to concentrate on
developing fiscal terms.
MR. FACKRELL answered that as a pipeline company Denali is not
seeking fiscal terms, but must attract shippers. He related
that shippers will need to bear the risk of developing the
reserves, for cost overruns on the pipeline, and associated
tariffs. Further, shippers bear the uncertainty of the price of
gas "at the other end." He speculated that if shippers also
need to bear the uncertainty of an unknown tax regime that it
may not result in a successful project. He assured members that
potential shippers will want to know the risks involved. He
suggested the tax regime would be important for the legislature
and state to focus on to foster a successful project.
5:17:56 PM
CO-CHAIR MILLETT asked whether Denali is working on an agreement
with Exxon Mobil Corporation (ExxonMobil).
MR. FACKRELL related that Denali offered Exxon Mobil an
ownership when the organization was formed that offered
ownership to Exxon. He alluded to current conversations with
ExxonMobil, and Denali is willing to review the project status
with them, but no decisions have been made.
5:18:47 PM
CO-CHAIR MILLETT mentioned that at a recent energy conference
the subject of mediation with FERC was explored. She inquired
as to whether it would be beneficial to have FERC mediate
between Denali and TransCanada.
MR. FACKRELL reiterated Denali's dilemma due to the terms and
conditions of AGIA. He stressed moving the pipeline project
forward. He opined that if the two projects proceed through
open season and continue on it would be troublesome for FERC.
He reiterated Denali's goal to move the project forward. He
opined that Denali can achieve a good cost estimate. Further,
potential shippers can have confidence in the team. Thus,
Denali will continue to concentrate on a successful open season,
he stated.
5:21:31 PM
CO-CHAIR EDGMON asked for an overall cost estimate for the
Denali project.
MR. FACKRELL answered that its estimate is $30 billion.
However, he pointed out that three producers spent $125 million
and 18 months to perform the last cost estimate was in 2002. He
related that Denali will perform another cost estimate over the
next year. He offered his belief that is fundamental in order
for Denali to conduct a successful open season.
5:22:18 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 5:22 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| TC Alaska PowerPoint 04072009.pdf |
HENE 4/7/2009 3:00:00 PM |
|
| Denali Pipeline PowerPoint 04072009.PDF |
HENE 4/7/2009 3:00:00 PM |