I’d like us to look at the long term picture and make a radical proposal or two. This is a bit longer than most of my blogs, but worthy of the extra time (so says I).
With the discovery of oil in 1968 in Prudhoe Bay came another boom, delayed by the need to settle native and State of Alaska land claims and also allowed the passage of the National Environmental Policy Act without which the Trans Alaska Pipeline would have been a much more in the line of past boom time projects that paid little heed to consequences. Even Alyeska consultant Jack Roderick warned against a serious misjudgment over lack of engineering respect for the challenges of building a safe pipeline across permafrost. There was also formal hold on permitting due to the 1966 declaration of Interior Secretary Stewart Udall to first deal with the native land claims. Congress passed the pipeline authorization act and President Nixon signed it in 1973.
During this time, the legislature was brought into special sessions to decide on permitting and taxation, learning a lot about the oil industry, much as the just completed special session around oil and gas. It is important for
Without the oil discovery and promise of great riches all around, it may have been that those claims would still be outstanding. Instead, the parties agreed to establish a corporate structure system for native entities. This proved to have about a 50% success rate, as half of the 12 established native corporations and many of the tribal corporations went bust in fairly short order, due to their inexperience with this form of management. In fact, the
The State of
All that being said, when royalties and severance taxes began flowing, it was like bears eating salmon at
So here we are, nearly 30 years after the oil started flowing. Oil has been pumped out as fast as possible from every corner of the world to maximize short term profits regardless of worldwide prices and we are now on the downswing of production and reserves. Generous tax benefits were given to the oil companies to recover heavier and deeper oil deposits and the oil companies have taken such advantage of these benefits so that, even during record oil prices, they pay little or no tax to the
The Arab Oil Embargo in 1974 caused our nation and the world to embark on exploration for renewable energy and conservation techniques to minimize our consumption of fossil fuels. Once demand fell and the embargo ended, so did our efforts. This was followed by a period when overproduction in the Middle East drove the price of oil down from $36 a barrel at the
Some sensitivity to the damage that careless production of fossil fuels might cause was demonstrated by the Exxon Valdez oil tanker running aground in
As we now are at what most would call “peak oil” production, more effort is being expended to seek alternatives to oil. Consumption has risen, developing nations, especially
Natural gas is more environmentally friendly due to less CO2 emissions, which as we now mostly believe, are causes for concern in the upper atmosphere and resultant disruption of our fairly balanced delicate world climate. This being said, we would be well within reason to suggest we stop consumption of any fossil fuel in favor of environmentally well sited renewable energy and only use natural gas as a bridging fuel while we re-structure the world’s energy economy to renewable energy.
An aside here as some would suggest we need more nuclear power to get us off non-renewable energy. One of the problems with a consumptive society is that we use some item, but that it comes with packing and inherent waste that must be taken care of when we finish consuming whatever that item is. Nuclear energy falls into the latter category in spades with deadly waste that lasts many thousands of years. Some arrogantly think they can bury it some place where it won’t bother anyone, but to guess 100 years down the road is considered pretty far thinking (believe me, I’ve been ragged for thinking too far term). So to assert that we know 10,000 years is lunacy. If we are to use nuclear energy, we need fusion, which will leave no harmful waste. That appears to be not feasible, at least unless we capture the fusion energy from our sun. Solar energy is suggested here.
The design of capitalism, now the dominant economic system worldwide, is to benefit the shareholder and corporation. Government is considered a hindrance to the free market and urged to get out of the way with reduced regulations. Externalities, environmental and otherwise, are not part of the equation. At the same time, the political system in many places is overwhelmed with special interests and the corporate lobbyists have the most access, as they have the funding from commerce. To represent mankind’s long term interest instead of short term “economic development” is considered incredibly naïve and one would be considered a flaming socialist or rabid environmentalist at best. It is hard to get elected without money and the political system is heavily stacked against anyone that would not align with monied interests. The Soros’ and Laurence Rockefellers are few and far between. Some now believe, much like local communities and states going around the Bush Administration’s refusal to implement Kyoto Treaty standards for the country by just doing it at their governmental levels. I might just agree.
So at the current juncture in
The oil company perspective is that it would be most economical to go across the Arctic National Wildlife Refuge with a pipeline into
If that is settled, then the issue becomes whether a pipeline should be built along the Alaska Highway through
There have been quite a number of economists and other experts testifying one way or the other to the Alaska Legislature. Gov. Murkowski asserts that his draft contract with the major oil companies for the Alaska Highway route is the only way the majors will build it but only if
The alternative “All Alaska” route to
In either case, the population base and workforce of
I have proposed a radical concept of building a smaller but sustainable All-Alaska pipeline, with a dog-leg to the
- Construction costs in an existing right of way (TAPS) would be less than a virgin route, thus cheaper. Permitting would be easier
- A smaller pipeline would require less high demand resources such as steel and labor.
- A smaller pipeline would cost less overall.
- It would also give Alaskans an opportunity to build up a technical labor force to accomplish larger projects.
- Due to the smaller scope of the project, it could be completed more quickly, reducing market uncertainty.
- The boom-bust impact to communities would be substantially less.
- Alaskans would benefit from the bridging fuel of natural gas.
Anchoragewill have a steady supply of natural gas as their Cook Inletfields diminish.
Three concerns are mentioned to me when I have made this proposal:
- The major oil companies may not agree to transport their gas through someone else’s pipeline. I think that, considering all the impediments to the other proposed pipelines, this is an issue that can be addressed, if not through the Stranded Gas Act, by other means, legal or economic. The oil companies have benefited enormously from the profits in transporting oil through TAPS and in their own tankers from
to worldwide markets. But if they can’t afford to take the admitted large risk with a multi-billion dollar project along the Valdez Alaska Highway, admit that and work with alternatives.
- Who will finance such a project? I don’t have the answer entirely, but I would assume that the Port Authority, who was charged by Alaskans to develop a pipeline, would be a likely candidate.
- Where will the exported natural gas be sold? This again is something that will take effort of those who know more about natural gas markets than I. However, logic dictates that, with oil supply peaking and oil demand increasing, the market for natural gas will increase as users seek alternatives to oil.
A second radical concept following construction of this small scale natural gas pipeline system is that
Developing robust renewable sources of energy for
Economic analyses of the various gas pipeline proposals don’t truly incorporate environmental and other externalities. If this project is looking forward 10-20 years into the future, the continued impacts from climate change can radically upset future economic assumptions. For example, imagine the economic impact on a pipeline project if a carbon tax were imposed nationally or internationally.
I don’t pretend to have all the answers, but believe the logic is solid for these two proposals:
1. Human society needs to get off of fossil fuel consumption. They are destroying the habitat upon which we rely for survival. Not to do so will just hasten our own destruction and as a developing species. It will also cost us more to NOT act, as we try to cope with climate change impacts.
2. We can learn from history (maybe) by using the most environmentally friendly non-renewable energy as a bridge to a sustainable renewable energy society.