ANCHORAGE, Alaska—
Alaska's natural resources continues to stir energy discussions with 2 big developments: Natural Gas and Arctic Drilling. First, a topic that suddenly seems to be getting more attention than usual:
Proposals for that long-awaited Natural Gas Pipeline from the North Slope.
Former Governor Frank Murkowski told a luncheon Monday in downtown Anchorage that he backs a proposal for a large-diameter "All-Alaska" pipeline project -- leading to an LNG Terminal either in Valdez or Cook Inlet.
And Murkowski says the time to act is now.
Murkowski echoed most of the sentiments expressed at an LNG Summit in Valdez last week. He said that Japan is cutting back on its use of nuclear energy -- and is going to need lots of Liquefied Natural Gas to generate electricity.
He says that Alaska -- with its 35 trillion cubic feet of proven gas reserves at Prudhoe Bay -- is a natural market to provide part of Japan's needs. But, he says, the window of opportunity is slipping away rapidly.
Murkowski says that Japan is willing to pay premium prices for energy, but Alaska must act quickly. He says other providers like Qatar, Papua New Guinea and Australia would also like to sell Nat Gas to the lucrative Asian market. He urged the state to show possible buyers that it's serious about finally building the project, which has been a sort of "pipe dream" for Alaska for more than 35 years.
Meanwhile, in the other big development in energy, Shell oil accidentally damaged an oil-spill containment dome during certification-testing in Bellingham, Washington Sunday Night.
The company says the damage will take days to repair, and will erase all hopes of drilling into oil-bearing rock in the Arctic Ocean this season.
Nevertheless, Pete Slaiby -- Shell's top executive in Alaska -- says the setback is not serious. The only thing that the loss of the Containment Dome will do is prevent Shell from doing is drilling deep this season.
The company says it still has the permits to drill to a depth of 1400 feet. That depth is a mile short of actually hitting oil.
Slaiby says that given how late it is in the drilling season, it is unlikely that Shell could have reached oil-bearing rock anyway this season. His hope is to start drilling five exploratory wells to shallow depth, and then resume the work next summer.
The setback was considered a reprieve by environmental groups -- which believe that arctic drilling inherently dangerous.
There is no proven technology to clean-up oil spills when ice floes are in the water. Solid blocks of ice can slip beneath containment booms, allowing oil to escape.
Shell says that is not a risk this year, given the fact it will be drilling far short of the oil reservoir.
Environmentalists say the risks are smaller, but still not zero when drilling into non oil-bearing rock. They warn that Shell could still hit unexpected pockets of pressurized gas -- and they worry about a blowout. But again, Shell says that's not a credible threat because it has extensive 3-D siesmic surveys of its drilling area -- and it knows the rock layers well, especially at shallow depths.
But Rebecca Noblin, of the Center for Biological Diversity, is hoping the delay in drilling to the oil-zone will provide time for lawsuits to move forward -- to prevent further exploratory drilling in the Arctic Ocean next summer.
Noblin also hoped for a change-of-heart from the Obama Administration -- which has so far permitted the drilling -- despite a million letters from environmentalists asking that it be halted.
The hope that that the President might change his mind seemed to fade today when Interior Secretary Ken Salazar put out a statement concerning shell.
That statement read, in part, "we look forward to continuing to work with Shell to maximize the remaining opportunities this drilling season provides."
Shell says it may well have two rigs punching holes in the Chukchi and Beaufort Seas by this time next week.
