In a carefully choreographed announcement, ConocoPhillips and BP announced yesterday morning that they are forming a new pipeline company, Denali Pipeline, to build a natural gas pipeline from Alaska’s North Slope to Alberta. This effectively derails Governor Palin’s AGIA process and TransCanada’s proposal. If you need a quick rundown on the announcement, the Anchorage Daily News blog has a good summary of the news reports (link).
Various folks have weighed in on what this announcement means. Over at Latitude 61, there is an opinion that the gas line is the last big project by the majors. I would disagree. Recent sales in the Chukchi Sea (MMS Lease Sale 193), along with Canadian ventures in the Beaufort, would indicate that, while the heyday of Alaska oil is over, the province is far from dead.
The Alaska Gas Pipeline blog, in my opinion, has correctly intuited what this announcement means, although he wrote that post on March 30th. I’ve held the view for several years that the only reason to run a pipeline that size is to feed tar sands production. Note that the announcement is only for a pipeline to Alberta. The lower 48 will not get any of this gas, and Alaska will only tap off a small amount. This is a pipeline to support the Alberta tar sands. That’s been ConocoPhillips preference all along. The producers plan under the Murkowski administration also dead ended in Alberta. Any talk of lower 48 gas supplies is simply political lip-service.