Thursday, June 02, 2005

We've failed ourselves, and our constituencies

Top of the morning gents,

My dad once told me that if we distribute all of the
world’s wealth evenly to every human on earth, we’d be
right back to our current levels of poverty within a
single decade.

I know most of you are behind the curve ball on energy
policy and energy issues, which is why I bombard you
with material related to natural resource economics.

Even our adversaries from the tree and man huggers
agree that natural gas is an excellent replacement in
fueling automobiles and a cleaner and cheaper fuel to
heat our homes, water, and food. Since our homes now
produce far more toxic pollution than all of our cars,
home energy issues are back on the front burner.

Over half of our nation’s electricity is derived from
coal, 20% from nuclear power, and the rest from
massive hydroelectric dams; it doesn’t take a genius
to understand why the energy for home use is very
dirty and environmentally destructive. Natural gas is
the only other option on the table heretofore.

Take one guess where in North America you'll find the
largest proven reserves of natural gas: Alaska.

When we burn natural gas, methane, we get exhaust
composed of water and carbon dioxide. Also, when used
as a transportation fuel, no unburned hydrocarbons are
emitted from the car in front of you.

Internal combustion engines have been vastly improved
by design and have become far more efficient in
plethora ratios: miles per gallon, power per gallon,
heat waste per gallon, and polluting emissions per
gallon.

By converting existing and archaic power plant
technologies to natural gas, we can continue to enjoy
our addiction to automobiles and paranoia of fellow
Americans. We Americans are a fearful lot; we're
afraid of riding high-speed rail or low speed trams
and subways if we have to sit next to another obese
and despicable citizen so similar to us. USA = Fear
and Self-Loathing.

Like computers, most of the energy consumed in the
operation of internal combustion engines is lost in
the form of heat, hence why turbine superchargers
(turbo chargers) improve efficiencies so much. Turbo
chargers recapture a bit of the wasted energy: the
force of explosions and heat flaring from exhaust
ports.

I believe I'm telling you something you don't know:
naturally aspirated gasoline and diesel engines are
anemic and wasteful; regardless of the fuel delivery
(carbs or injected) without recapturing the violent
forces exploding from the exhaust manifolds.

Turbo chargers work to improve efficiencies equally as
well when we burn natural gas in our cars and trucks.
Ya see? We can still be fat cunt American hotrod
enthusiasts even when we convert to cleaner burning
natural gas.

*Okay, that concludes our lecture in idealism, now to
realism.

We have a setback in our continued endeavors to supply
the lesser 48 with plentiful and cheap natural gas.

Us greedy Alaskans have resisted using the existing
Canadian pipeline infrastructure, preferring to pipe
everything to Valdez for processing and loading onto
supertankers bound for the left coast etc.

All resource extraction colonies get stupidly greedy
and will fuck ourselves as long we can simultaneously
fuck all of you chubby lesser 48 dwellers if we can't
capture the process related value added profits.

Alaskans have long dreamed of attracting industry, but
we're too far from your massive populations, markets
and retail distribution centers. The profit margins on
raw materials are far less than the profits harvested
in the commerce transpiring at the retail level of the
ultimate consumer.

Subjugation is painful and Alaska refuses to accept
our position in the value added process chain from raw
materials to finished products. Until then our
resources will forever stay frozen under my house here
on the North Slope.

Super cooling natural gas into LNG (liquid natural
gas) for supertanker loading is extraordinarily
expensive and dangerous. We currently have no
facilities to perform this; thus adding tremendous
cost to this 'All Alaska Plan' and pricing our product
far above our competitors in Indonesia, Venezuela, and
Russia.

Canada has a myriad of pipelines from way north down
to Illinois and the east coast. Reinventing the wheel
by hoarding the value added processes at astronomical
prices are both redundant and duplicative.

From a personal point of view, I prefer no gas
extraction at all. Once cheap Alaskan natural gas
starts flooding the energy markets, my parent's
monthly check for $1500.00 from oil and gas royalties
and profits will decline.

Ya see, at the current inflated prices for natural gas
and crude oil, my folks receive more than any Alaskan
Permanent Fund check, every single month for another
50 years. After that, my grandkids will start farming
again on the old 650-acre Finnish homestead up in
Edmonton, Canada.

For the sake of free debate and allegiance to my state
of Alaska, I'm pushing hard to open ANWR, NPR-A, and
also the exportation of our massive natural gas and
coal reserves.

To quote the 6Killer, we have to keep the faith and
continue the momentum with the current political party
possessing superior expertise and political capital in
energy policy both domestic and foreign.

I don't care which party pursues my agenda; as long as
their party platform is focused on the issues I have a
stake in. I want to see massively increased extraction
of our huge coal seams throughout the Midwest and
Alaska, increased natural gas extraction from Canada
and Alaska, and expansion of our oil drilling from
ANWR and NPR-A.

I also prefer nuclear power plants in our most remote
villages. I'm not too fond of power lines or pipelines
criss-crossing my hunting and fishing spots.

Cripplingly high energy prices for our poorest races
and cultures might be amusing, but it ain't fair. If
we accept the premise that all of our shit ass poor
minorities are Americans and members of my team, I can
demand you treat my guys better by developing cheaper
energy and allow them to attract industry.

Like my millionaire grandfather always says, "Ain't no
profit in fair play or peace." If we're to continue to
screw our darker pockmarked minorities with
insufficient amounts of cheap energy, clean water, and
sanitation like flush toilets, my parents will only
get richer. The same paradigm that represses
minorities also serves to unjustly enrich my family
and me.

I doubt you poor bastards prefer this scenario. Either
we take care of everybody, or we take care of my wife,
my rich parents, and me.

We have countless numbers of homeless people on
American soil, and on the reservations. My folks have
2 unoccupied houses in the richer neighborhoods of
North Seattle that they use for storage: one worth
half a mil and the other worth $650K. All my brothers
and sisters live in houses owned by my parents,
excluding my 2 smarter bros in California and Japan,
and this feral Finn living north of 70 lat at the
wrong end of the North American continent.

Isn't this a perverse scenario?

As energy prices climb, the companies and families
drawing income from the extraction processes only get
richer, while all of you get larger and larger bites
taken out of your wages merely to afford basic
comforts like gasoline, electricity and heat. I ought
not bitch so loudly about a paradigm that
redistributes wealth from you working class thugs to
my arrogant Scandinavian (1st generation American)
parents.

You know something? I just realized that our evil
tree and man huggers are actually serving my family
interests to the displeasure and declining wealth of
the middle class; you lot.

So what the fuck am I bitching about? I not sure, but
it bugs me to see my browner neighbors get poorer and
poorer as my family’s wealth approaches the 8-figure
mark.

In the context of my own self-preservation, America’s
indecisiveness and fear of understanding resource
economics and energy policy serves the wealthiest at
the expense of the same citizens we’re afraid of and
refuse to sit next to on the subway, bus, or tram.

Poverty sucks, and until we harvest the available and
cheap energy resources directly under my blessed FAZ,
you niggers should prepare to live poorer and poorer.

Karl.

Here's 2 articles that have a painful and direct
relationship to my relative wealth and your poverty.

---

Sempra pulls support of all-Alaska gas pipeline
by Dan Fiorucci - Wednesday, June 1, 2005

Anchorage, Alaska - Backers of an all-Alaska natural
gas pipeline received a blow today when Sempra Energy
announced it is pulling its support from the project.
Sempra was the major financial backer of the Alaska
Gasline Port Authority, who proposed the pipeline
route go through Valdez rather than Canada.

Sempra said they would sign a contract to buy 4
billion cubic feet of Alaskan natural gas and they
would keep buying it for the next 30 years. In return,
the company said Alaska has to build a pipeline to get
that natural gas to Valdez and put it aboard liquefied
natural gas tankers.

The company waited a year and a half for North Slope
producers and the state to take them up on that offer.
But Sempra got tired of waiting for an answer.

Sempra showed its support for the proposal with
television ads that pushed the benefits of an
all-Alaska pipeline. And Sempra backed the gas
pipeline proposal by offering to buy all the gas the
line could carry for the next 30 years.

"It's sad that we haven't been able to meet their
timelines, but it's withdrawal as backing but not
withdrawal in terms of working with us. And I'm sure
we’ll be dealing with them in the future,” said Rick
Halford, a former Alaska state senator.

Backers of the all-Alaska route say that the state and
the North Slope producers have failed to take
advantage of a golden opportunity.

“It's disappointing that the producers found it
necessary to attack our project publicly here in
Alaska,” said Bill Walker, the attorney of the Port
Authority.

Meanwhile, a spokesman for Gov. Frank Murkowski said
he's disappointed by Sempra's withdrawal of financial
backing for the all-Alaska gas pipeline.

“Governor Murkowski today was disappointed and
surprised to learn of Sempra's decision to end their
partnership with the Gasline Port Authority. He
contacted Mayor Whitaker personally this afternoon to
express his disappointment and to reaffirm his
commitment to continue to work with the Port
Authority,” said Becky Hultberg, the governor's press
secretary.

Both ConocoPhillips and BP say they have never tried
to denigrate the all-Alaska route. But they believe
taking Alaska natural gas, shipping it 800 miles to
Valdez, compressing it into liquefied natural gas to
put aboard tankers and sending tankers out into ports
is uneconomical. The producers believe that the
TransCanada pipeline route directly to Chicago is the
most economical route; but it’s something the Alaska
Port Authority disputes.

North Slope producers are continuing to negotiate with
the state, and tonight the Port Authority insists that
the all-Alaska route is not dead.

---

Jun 1, 10:43 PM EDT

Trans-Alaska pipeline worth $3B, review board says

By MATT VOLZ
Associated Press Writer

JUNEAU (AP) -- It's pumping half the oil it did in its
prime, and tariffs could drop sharply in the coming
years, but the Trans-Alaska Pipeline System is still
worth $3 billion, according to a state review board.

The five oil companies that own the 800-mile pipeline
had appealed that assessment by the Alaska Department
of Revenue, which this year changed the way it values
the pipeline in figuring the property tax owed.

The owners say under the method used previously -
basing the assessment on tariff income - the
pipeline's value is actually $1.5 billion.

The local governments through whose land the pipeline
runs also appealed the state's assessment, but took
the opposite line: The state's price tag is as much as
$11 billion short of the real value.

The Department of Revenue's number was upheld recently
by the State Assessment Review Board, keeping the
pipeline's value at about the same level as it has the
past four years.

The reason for the dispute is taxes. Upholding the $3
billion assessment for 2005 means the pipeline owners
will have to pay $60 million in property taxes to be
split between the state, five municipalities and the
North Slope Borough.

"The last time it went to a hearing was four years
ago," said Dan Dickinson, Tax Division director. "All
the parties agreed looking at it, the revenue stream
was the way to go.

"This year when we looked at it, we said there is a
good chance for a reduction in tariffs."

If tariffs are reduced in 2009, when a settlement
expires in calculating those fees, the property tax
would go down using that method of calculation,
Dickinson said.

Because of that possibility, the division used a new
way of calculating the pipeline's value. Using that
method, the value is based on how much it would take
to replace the entire pipeline system, minus the cost
of depreciation.

The division figures the oil pipeline is about halfway
through its life, and is expected to last until 2034,
according to Randy Hoffbeck, state petroleum property
assessor.

The review board said continuing to use tariff income
as the basis for the assessments would "understate the
full value of the TAPS," or Trans-Alaskan Pipeline
System.

"The board agreed with the division that valuation of
the TAPS based on its tariff income stream is likely
to become less and less reliable as an indicator of
the TAPS' full and true value," wrote board chairman
Steven Van Sant in the May 26 decision.

Daren Beaudo, spokesman for BP Exploration (Alaska)
Inc., said since 2001, there has been depreciation and
a reduction in oil flowing through the pipeline,
pointing to a lower overall value of the pipeline. He
said the company stands by its $1.5 billion
assessment, but has not decided whether to pursue the
appeal in court.

"We're challenging the appraised value just as
homeowners have the right to challenge the appraised
value of their homes," Beaudo said.

Dawn Patience, spokeswoman for ConocoPhillips Alaska
Inc., said ConocoPhillips also believes the $1.5
billion is the appropriate appraisal, but declined to
go into details, saying it was "an ongoing dispute."

The municipalities' assessments, which ranged from
$8.9 billion to $13.9 billion, includes costs the
state kept out of its assessment - road and bridge
construction, legal fees, program management and other
costs. The municipalities also argued that the
pipeline's life is through 2040, not 2034.

The review board said the state did nothing wrong in
excluding those costs, but the division should review
the 2040 date in future assessments.

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