NEWS BULLETIN

December 19, 2001 --- Vol. 7, No. 156December 2001

CERA sees 2015 window for Arctic gas

Cambridge Energy Research Associates now believes that the window for Arctic gas has moved out some five years - to about 2015.

In November, CERA said it saw the Arctic gas window moving out to 2009-10, but said then that a recession through 2004 would shift the window out even farther, possibly to 2015. That was the message Ed Small of CERA gave the Legislature's Joint Committee on Natural Gas Pipelines Nov. 7.

But at a Dec. 19 briefing in Anchorage, CERA's Ed Kelly said that CERA was now projecting the 2015 date. Times are a bit difficult, he said, with sluggish economic growth.

Asked about impact on Arctic gas of economic conditions, Kelly said it clearly has been pushed back in the short term. The smaller Mackenzie Delta piece of Arctic gas may be easier for the market to absorb under present conditions, he said.

Kelly said there has been a shift in thinking at CERA from about a year ago, and the thinking now is that Arctic gas has probably been moved back some five years.

CERA has three scenarios, Kelly said, and an Arctic gasline to the Lower 48 "goes from being there in two scenarios out of three to being there in one scenario out of three."

He said there are four challenges to an Alaska gasline project: the cost of the pipeline; liquids from the gas stream are already monetized in Alaska; U.S. federal tax structure is less favorable compared to other tax structures in the world; and the large slug of gas an Alaska project would put into the market.

Alyeska has diesel spill at Pump Station 6

The Alaska Department of Environmental Conservation said Dec. 19 that Alyeska Pipeline Service Co. has had a 761 gallon diesel spill at Pump Station 6 after a fuel line ruptured on one of the generators which supplies power to the pump station.

The spill occurred Dec. 17, with an initial report of 80 gallons of diesel spilled. That volume was updated Dec. 18 to 761 gallons, DEC said.

Of the 761 gallons spilled, 417 gallons are estimated to have been contained in the generator module.

The diesel inside the generator was recovered with sorbent pads and a vacuum truck. DEC said the initial low report of diesel spilled is believed to have been due to the foreman at Pump Station 6 not knowing how long the line had been leaking, and the fact that it was dark at the time and those at the pump station couldn't see the full magnitude and size of the spill.

Three hundred square feet of gravel pad beneath the generator was contaminated and DEC said the contaminated gravel will be excavated upon removal of the generator module. Another generator module must be delivered and installed to provide power to Pump Station 6 before the existing module is moved. The generator may not be moved for several weeks to months.


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