Energy for Alaska

Cornelia Meyer is an independent energy consultant from London and CEO of the MRL Corpora-tion. She has held professional positions at GE Energy, BP and UBS and sat on various global energy committees, such as the World Economic Forum's Global Agenda Council in Energy Security.


The State of Alaska supports crude oil and natural gas exploration with substantial investment grants and subsidies – why?

Cornelia Meyer: The oil and gas industry is important for Alaska, as the direct and indirect revenue from the production of oil and gas accounts for around a quarter of gross domestic product. Also, the demand for energy is growing; but particularly in Southern Alaska, gas is slowly running out – not the reserves, but based on the production rates. Alaska is therefore facing a potential energy supply bottleneck.


In light of this situation, what is your view on the Deutsche Oel & Gas project in the Kitchen Lights Unit?

Cornelia Meyer: The Cook Inlet region, where more than half of all of Alaska’s inhabitants live, has no connection to the Trans-Alaska Pipeline System to provide supply. This will ensure demand in the long term, and the buyers are right there on site. And even if there is a surplus of supply, there is the potential for the gas to be exported by turning it into liquefied natural gas (LNG). Because fracking is not permitted in Alaska, the market remains extremely attractive in the long term: the price differential has been fantastic so far. DOGAG also benefits massively from government subsidisation, which makes the exploration projects in the Cook Inlet so attractive.


Will the subsidies from the State of Alaska cause supply to increase so much that prices come under pressure?

Cornelia Meyer:In global terms, consumption is to increase further, particularly in the Next Eleven and BRIC countries, so every Btu will be needed. And, due to the exploration of shale gas and oil, there could be a shift in the balance of power among producers. Furthermore, the increase in production of shale gas and oil in the lower 48 states of the USA could cause prices to erode in the long term. For now, however, Alaska remains a special situation.

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