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Demand for gas pipeline is growing

Posted: Wednesday, September 10, 2003

Congress must pass a comprehensive energy bill this fall. It is imperative to include in the legislation support for the natural gas pipeline from Alaska. The natural gas line is important to market gas from Alaska's North Slope. Natural gas is in short supply and the price is going up. That is not because we are running out of gas. It is because development of new sources lags increasing use.

Everything from garbage bags, to plastic pipe, to baby toys, to auto and aircraft parts, to body armor, to fertilizer, to recreational boats, to TV and computer cabinets is made from plastics. And plastics come from natural gas, crude oil and coal. Alaska's pulp mills, now closed, once contributed to plastics for explosives, tire cord, fabric and so forth. Now it is up to natural gas, crude oil and coal, which Alaska has in abundance, to boost the Alaska economy and provide reasonably priced products for the nation.

The Edmonton (Alberta) Journal reported recently the Canadian province has a problem because its natural gas supplies are in decline.

One company has closed three of its six petrochemical plants at Edmonton because of a lack of supply. Another problem pinching the Canadians is the increased price for natural gas as fuel in the United States.

At one time, stripping ethane out of natural gas for plastics made gas 10 times more valuable than selling it for fuel. Now, the newspaper says: "The record high prices for natural gas have narrowed that gap, squeezing the petrochemical industry's profit margins."

Part of Alberta's plastics industry problems began in 1998, the newspaper claims. At that time a $4 billion pipeline was completed that takes 1.3 billion cubic feet of gas a day to Chicago from Alberta. With that, the Alberta government lifted a restriction that required that ethane, used for plastics, be stripped out of the gas before the rest of the gas was exported. The government was more worried about royalties for the government than about securing supplies for the petrochemical industry.

Alberta industry is now looking forward to a natural gas pipeline from the Northwest Territories through the Mackenzie River Valley, which is sometimes held out as a competitor to the Alaska natural gas pipeline following the Alaska Highway. It appears there will be enough demand for gas to support both.

People who want their beverage bottles and other forms of plastic, who wish to minimize U.S. dependence upon foreign sources to power their vehicles, who want more electric power, should support development of Alaska's natural resources. There is no way Americans can conserve their way out of the looming shortages. The population of the United States has doubled to more than 283 million since World War II.

The Census Bureau says there will be 30 million more of us in 2010. That's a lot more garbage bags, wooden homes and vehicles.

Alaska has the resources. According to the U.S. Geological Survey, about one-half of the nation's coal reserves lie in Alaska, 80 percent of that in the 23-million-acre National Petroleum Reserve-Alaska. Coal generates one-half of the electricity used in the United States.

The state Division of Oil and Gas pegs Alaska's oil reserves at 7.5 billion barrels, although more reserves are found each year and National Petroleum Reserve-Alaska has been hardly touched. Natural gas known reserves are estimated at 35 trillion cubic feet. Undiscovered reserves are predicted at three times that amount. But even 35 trillion cubic feet would heat Chicago for 60 years and allow some natural gas to make plastic bottles to send more drinking water from Alaska. Plants in Hyder, Metlakatla and Sitka already ship drinking water south.

Sen. Ted Stevens and Gov. Frank Murkowski are right, it is not only time to pass an energy bill that allows access to Alaska resources at ANWR and with the natural gas pipeline, it is time to look for a railway connection to the Lower 48.



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