No Need for Arctic Gas; Alberta in Trouble?

Several posted articles postulated that shale gas may wipe out the need for gas from Alaska's North Slope, or from Canada's frigid Mackenzie Valley; a post from canada.com confirms the same:

Abundant cheap supplies of natural gas from new shale deposits, plus growing imports of liquefied natural gas flowing into the United States, push back by 15 years the need for Arctic gas and make it difficult for higher-cost gas from Western Canada to compete, says pipeline executive Steve Letwin.

The North American natural gas industry is "overbuilt," pointing to weak prices for a long time, said Mr. Letwin, Houston-based executive vice-president, gas transportation and international, at Canadian pipeline giant Enbridge Inc.

Years of worry about supply shortages because of the maturing of conventional supplies have been replaced by worries there aren't enough customers for the 1,200 trillion cubic feet of natural gas in shale deposits -- enough to last a century -- found in the past three years, plus liquefied natural gas coming from offshore that is "needed like a hole in the head," Mr. Letwin said in an interview.

"The biggest issue that we now have is [insufficient] demand," said Mr. Letwin. "And in the absence of demand, you are going to see a price for gas that is going to be kept between US$5 and US$7 for a long time to come."

[...]

Shale producers in the United States can make money at low prices, he said. But the trend is not promising for natural gas stranded in the Arctic, which has
been waiting for decades for pipelines to be built so it can be commercialized.

Another canada.com post speculates that America's shale gas resources may hurt Alberta's
fiances, of which has been a producer of gas exported to the US:

Major shale gas discoveries in the southern United States are threatening the financial lifeblood of Alberta: the royalties the province collects from natural gas, Premier Ed Stelmach says.

[...]

Energy companies aren't drilling in Alberta because of the new finds and a ``very, very depressed gas market right across North America,'' the premier explained.

He said the major new finds, including some estimated at a trillion cubic feet in Louisiana and Texas, are much closer to the market than Alberta ``and these are serious consequences for the revenue side in government.''

Stelmach couldn't say how much of an impact there will be on provincial revenues in terms of a dollar amount, but said ``royalties are at least a good third of our revenue stream.''

- Brewskie

Palin's Pipe Dream: R.I.P?

Alaska Govonor Sarah Palin has made the Alaska Natural Gas Pipeline a centerpiece to her political ambitions. However, with America practically overdosing on shale gas and plenty more in tow, the question begs: do we really need to squander billions building the pipeline?

No so, claims T. Boone Pickens. Pickens believes with practically an unlimited supply (for a long time anyway) of shale gas here in the continental US, he feels America is better fit drilling closer to home vs. piping afar.

Read below:

Billionaire oil investor T. Boone Pickens said on Wednesday he doubts a $26 billion natural gas pipeline from Alaska will be built any time soon as abundant new shale gas supplies reduce the need for the expensive project.

Pickens, who is promoting a plan to boost investment in wind power and natural gas to cut U.S. oil imports, said at a Calgary appearance that he sees little need for Alaskan gas given massive shale gas discoveries in the Barnett shale play in Texas and elsewhere.

"All the proven gas on the Arctic coast is 39 (trillion cubic feet). That's not as much as you have in the Barnett shale," Pickens said at a Calgary speech. "I don't think a pipeline from Alaska through Canada to the lower-48 makes sense."

[...]

Still, with the Barnett shale containing as much as 50 trillion cubic feet of gas, and new plays in Louisiana, Arkansas, Pennsylvania, British Columbia and elsewhere showing the potential to be even bigger, the need for an Alaska line is questionable, Pickens said.

"I don't think that pipeline gets built right now," he said. "I don't think the pipeline will be built for 10 to 15 years."

Added: It appears Alaska isn't the only place with dreams "going up in smoke;" Canada's Mackenzie Valley Pipeline also appears to be uncertain. Because of why?

The emergence in the last couple of years of large new deposits of shale gas close to major markets is seen as the latest stumbling block for Arctic resource development, although Mr. Sykes said natural gas in the Mackenzie Delta is competitive with most shale plays in North America.

- Brewskie