More Exxon-induced anger

Judging from the reader responses to Kristen Hays’ story today from the Exxon Mobil shareholder meeting, readers get really fired-up no matter what one writes about them.
But comments Tillerson made about long-proposed natural gas pipeline projects out of Alaska also got some folks going.
From the Anchorage Daily News:
“Rex Tillerson, speaking with reporters after Exxon’s annual shareholders meeting in Dallas, was quoted by the Reuters and Bloomberg news services as saying the cost estimate to build a gas line from Canada’s Mackenzie Delta gas fields had more than doubled to about $15 billion.
“At those costs, it’s not viable to build that pipeline,” Tillerson said.
Exxon is a lead player in the proposed Mackenzie pipeline.”

pipelines2 Getting gas to the Lower 48.

Andy Weissman, publisher of Energy Business Watch and senior energy advisor for FTI Consulting, called the comments from Tillerson ” … a stunning development.”

The revelation that it is not realistic to expect these two major projects to be completed creates a massive hole in future U.S. energy supply. These projects had been expected to be completed over the next seven to 10 years and to supply 10 percent or more of the North American natural gas supply for at least two to three decades.
The significance of this development for future U.S. natural gas supplies is striking, as the following points illustrate:
* Eliminating these projects will have the same affect on U.S. natural gas supply as if storms even stronger than Hurricanes Katrina and Rita permanently destroyed all of the natural gas production facilities in the Gulf of Mexico.
* In Btu terms, the loss in expected natural gas supply is equivalent to 1.25 times the amount of oil the United States currently imports from Saudi Arabia, with no obvious way to replace it.
* Losing this massive supply source inevitably will lead to steep increases in the long-term prices of natural gas and electricity (increasingly generated from natural gas).
* Existing natural gas and electricity price forecasts effectively are flawed, since these forecasts invariably assume these two pipelines will provide a major part of future North American supply.

It seems like we’re talking about oil so much we ignore the role natural gas plays, too. Will further delays of these projects really hurt us anymore than we’re already hurting ourselves? Tell us what you think.

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