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Old 12-20-2005, 07:59 AM
GottaDiesel's Avatar
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Natural Gas...

BP, Exxon Mobil hit with antitrust suit
Alaska claims they're withholding natural gas from market
By MarketWatch
Last Update: 1:36 AM ET Dec. 20, 2005
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SAN FRANCISCO (MarketWatch) -- A dispute over the best way to move Alaska North Slope natural gas to the U.S. market has resulted in an antitrust suit claiming BP Plc and Exxon Mobil Corp. are conspiring to withhold the fuel to drive up prices, according to a media report Tuesday.
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XOM57.70, -0.36, -0.6%) , the world's largest publicly traded oil companies, denied the allegations, The Wall Street Journal reported in its online edition. See Wall Street Journal story (subscription required).

The action comes as natural-gas prices have flirted with historic highs on fears of inadequate supplies for a cold U.S. winter. Natural-gas futures closed at a three-session high on Monday. See full story.

The suit against BP and Exxon Mobil was filed Monday in U.S. District in Fairbanks, Alaska, by the Alaska Gasline Port Authority, the state agency charged with building a pipeline to move an estimated 37 trillion cubic feet of natural gas - enough to satisfy two year's worth of U.S. demand - from the North Slope fields to U.S. markets, The Journal said.

The authority alleges in its suit that a series of illegal agreements and acquisitions by the companies has choked the flow of gas reserves and seeks a court order to top the companies' alleged collusion, The Journal said.

The authority said that BP's refusal to agree to ship its natural gas and Exxon Mobil's failure to develop its huge fields amounts to "warehousing" a desperately needed resource in an effort to drive up prices. "Gas prices are at record highs, and big oil companies still won't move the gas to market," authority Chairman Jim Whitaker said in a statement, according to The Journal.

Gas now produced by North Slope oil wells is injected into underground reservoirs, The Journal said.

The port authority says it has $18 billion in federal guarantees and the permits to build a pipeline from the North Slope to Valdez in the southern part of the state, where gas would be liquefied and loaded onto tankers, The Journal said. The Trans Alaska Pipeline moves crude from the North Slope to tankers that load at Valdez.

But BP and Exxon favor an alternative, longer pipeline through Canada over which they would have more control, the authority charges in its suit.

Talks between the state and producers on building the longer pipeline have stalled, The Journal said.

BP and Exxon Mobil have balked at the state's terms and a third producer, ConocoPhillips, (COP:
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COP58.60, +1.25, +2.2%) agreed to basic terms in October, The Journal said.

BP and Exxon Mobil argue a pipeline through Canada to the Midwest would increase the value of the gas by delivering it directly to gas-hungry markets, while the Valdez route would generate less revenue and expose the $20 billion project to greater risk, The Journal said.

"This is another sobering reminder of our litigation-crazed society. This suit is frivolous and it's totally without merit," said Exxon spokesman Russ Roberts, according to The Journal.

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Old 12-20-2005, 08:37 AM
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Originally Posted by GottaDiesel
"This is another sobering reminder of our litigation-crazed society. This suit is frivolous and it's totally without merit," said Exxon spokesman Russ Roberts, according to The Journal.
Too true; this is a local pissing match and the local authority is exposing itself as foolish. Arguments over where to build a pipeline from Alaska have close to nil effect on the current price of gas.

Gas prices have been going up for the last 5 years as the easy reservoirs in the lower 48 are becoming depleted and Canada diverts our traditional overflow source to tar sand oil production. Unlike oil, you can't just tanker in infinite new supplies from Qatar; there are (still) only 4 LNG terminals in the US with a couple more in the pipeline. They're expensive and take a while to build, and nobody wants them in their neighborhood (Boston mayor Mennino temporarily shut down the local terminal a couple of years ago in fear that a terrorist attack blowing up an LNG tanker would shut down Boston harbor and take out much of downtown Boston - lot of explosive energy in one of those things). Meanwhile most new power plants are powered by natural gas, and most new homes are heated by it, since it's "clean", driving up demand. It's been a perfect storm - to the upside - for suppliers in the last couple of years, and it won't change soon. Get used to higher heating bills.
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Old 12-29-2005, 11:26 PM
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This is funny. As if any oil company is OBLIGED to produce gas. They are not in the business to act like a charity, they are in it to benefit their stockholders, just like every other company.
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Old 02-08-2006, 09:34 PM
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BBC article

Seeking a cure for US oil addiction
By Julian Pettifer
BBC Radio 4's Crossing Continents

The image of the US as a gas-guzzling, energy consuming nation is at odds with a number of green initiatives in the country at large.

In the boardrooms of great corporations, among city mayors and state governors, even among evangelical Christians - the most loyal supporters of President George W Bush - climate change and energy conservation are on the agenda.

The influential journal, Business Week, recently stated: "Reducing carbon dioxide emissions is no longer just 'a green thing'. It makes business and foreign policy sense as well."

General Electric, the largest US company, has launched its Ecomagination programme to take steps on global warming.

Other household names like Dupont, Alcoa - the world's largest producer of aluminium - and Starbucks, have also launched energy-saving initiatives.

But it is in the individual state capitals that the most urgent activity is being seen.

About 20 states now require that a certain percentage of electricity is produced from renewable sources, and among them is the president's home state of Texas.

It was in 1925 that they first struck oil in the Permean Basin in Western Texas and they have been pumping oil ever since; but less and less each year.

Emerging picture

McCamey was bleeding our youth away. Now it has a chance to live again
McCamey Mayor Sherry Philips
Even when the oil runs out - as it will - Texas is determined to remain in the energy business.

The little oil-field town of McCamey prospered in the oil boom and suffered in its decline. Now it is enjoying a revival, thanks to wind.

In a desolate landscape, scarred by old oil workings and rusting machinery, an elegant new industrial picture is emerging.

Towering over the dusty scrub around McCamey are 800 wind turbines and soon there will be more.

McCamey calls itself the "Wind Energy Capital of Texas", a title which the Mayor, Sherry Philips, has officially registered in the state capital. No other town can now claim it.

She has good cause to bless the wind. In the 90s, when the oil industry declined, McCamey lost half its population and could have become a ghost town.

"McCamey was bleeding our youth away," she said. "Now it has a chance to live again."

Secure future

Randy Sowell, with his cowboy hat and full beard, is totally Texan.

Randy Sowell is excited by the renewable energy potentials
He used to be a rancher but he now works for Cielo Wind Power, one of the companies that develops the wind farms.

It is not just that wind power is clean and renewable, he points out, but it offers security for the ranchers.

Running cattle in this arid country has always been marginal, but now, by leasing their land to the power companies, the ranchers have a future.

There are other possibilities, he believes, to exploit renewables.

It has already been shown that dry bore-holes in exhausted oil workings will yield geo-thermal energy; and as the relative cost goes down there must be potential for solar installations too.

Market economics

But at present, the most exciting future lies with wind energy.

According to a US Department of Energy study, most of the electricity needs of the whole country could be provided by the wind power potential of three states: Kansas, North Dakota and Texas.

In Austin, the state capital of Texas, the man who oversees the leases on land-based and offshore wind farms, is Land Commissioner Jerry Patterson.

He has absolutely no doubt about the future of wind energy.

In promoting it, he is not motivated by ideology. If it helps in the fight against global warming, that is a welcome bonus, he says, but it must justify itself on economic grounds.

The motivation for developing renewables must come from the market and not from government mandate, he insists. George W Bush would surely agree to that.

'Government is like a baby:
An alimentary canal with a big appetite at one end and
no sense of responsibility at the other'
- Ronald Reagan
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