20-year supply of gas is there

Oil, gas manager says reserves support pipeline

Posted: Wednesday, December 22, 2004

The Kenai Chapter of the Support Industry Alliance, a statewide trade association for oil and gas contractors, was told Tuesday there are enough known gas reserves to support a gas pipeline from the North Slope for at least 20 years.

Jack Hartz, senior reservoir manager for the Alaska Oil and Gas Conservation Commission (AOGCC) told those present that of the known gas reserves, 30 trillion cubic feet of gas could be produced, excluding the potential for undiscovered gas. He said that would sustain the pipeline for enough time to make it economically viable.

The AOGCC is a state judicial agency that monitors resource recovery in Alaska. It regulates drilling for oil and gas producers in the state. The agency is outside of the political influence and is concerned with maximizing resource recovery, he said.

During the presentation, Hartz dispelled concerns that oil production would burn up most of the gas, explaining there are plenty of reserves to ship gas south.

There is a concern that producing gas for a pipeline could cut into oil production, he said, adding there needs to be a carefully researched plan to maximize production of both. It will be the job of the AOGCC to develop this plan, he said.

In recent years, there has been an increased interest in Alaska gas production as the market points to a sustained increase in natural gas prices, Hartz said.

"The supply needs to be expanded to meet the demand," he said, adding that new companies are interested in looking for gas to meet this demand.

Hartz said building a pipe-line would provide incentive for more companies to begin gas exploration. In the past, oil prices have been considerably higher than gas prices, but the value of gas and oil has equalized making a gas pipeline economically wise, he said.

Hartz said he is sure a pipeline will be developed.

"It's just a matter of time," he said.

"The future looks bright for producing gas on the North Slope," said Michael Munger, executive director for the Regional Citizens Advisory Council for the Cook Inlet after hearing the presentation.

Larry Houle, general manager for the Alliance, said building a gas pipeline would be beneficial for everybody in the state, because it would create jobs - generating income for Alaska residents.

"It's the biggest production project that would ever be undertaken in North America," he said.

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