Propane, a bridge to gas: Obtaining 'wasted' product from Slope could be the key
by Ross Adkins
Jan 29, 2012 | 2902 views | 17 17 comments | 10 10 recommendations | email to a friend | print
Community perspective

Harold Heinze, the outgoing CEO of the Alaska Natural Gas Development Authority, says that there is an abundance of propane on the North Slope readily available for use. Additionally, the Alaska Oil and Gas Conservation Commission recently opened an investigation into his private citizen claim that this propane is being “wasted” by pumping it into the ground when there is a local need and market available. Waste of oil and gas resources is illegal in Alaska and is enforced by AOGCC.

Air pollution in the Fairbanks and North Pole areas will not be permanently resolved without natural gas. A gas line does not seem imminent, and the use of inexpensive propane here until natural gas arrives is a natural intermediate solution. Converting from propane to natural gas, if it ever does get here, involves changing a $5 nozzle and removing the propane tanks. Propane would be needed for the outlying areas of the borough permanently, since the gas lines could not economically reach the less dense population.

Currently, most of our propane comes from Alberta, by ship to port, then by truck to Fairbanks. At about $3.50 per gallon, it costs more than oil, when comparing heat values. But hauling “wasted” propane from the North Slope should be about a quarter of that cost. This reduction should be sufficient to allow conversion of heat plants in Fairbanks and North Pole sufficient to solve the pollution problem until natural gas gets here. It is interesting to note that natural gas lines were laid in Fairbanks streets in 1956 in anticipation of imminent delivery.

Propane should also be the immediate solution to energy cost problems in Alaska’s coastal and river-accessible villages. The process of converting all our energy needs to our abundant natural gas resource should begin now by starting with propane. It can be delivered to all our population at reasonable prices, and more appropriately fits the demand of the Alaska Constitution that our resources “be used for the benefit of the people.”

“Energy Civilization,” by University of Alaska Fairbanks Professor Douglas Reynolds, describes the declining world oil supply and the consequent rise in prices in an informative, interesting and convincing book. The book makes a strong case that world oil production decline demands change to other sources of energy. Alaska is in a favorable position for that change and should get started now by in-state use of our gas. Beginning with propane for our needs in Fairbanks and outlying villages should be an initial step to energy independence for Alaska.

In April, the state Department of Environmental Conservation must file a program for airborne particulate (PM2.5) abatement for the borough with the federal Environmental Protection Agency. That program should include the use of propane and eventually natural gas as part of the abatement program. It should also include the startup of the Healy Clean Coal Project. EPA should agree to permit the startup which they have been withholding without sufficient cause. Not starting HCCP causes an increased use of wood and coal for heat and the use of less efficient and more polluting generators in Fairbanks.

Fairbanks pollution is just the beginning of a list of problems created by our lack of foresight in not developing our resources for our own use.

Villages frequently experience emergency situations arising from lack of or expensive fuel. Nome is a good current example. The environmental risks associated with oil are much higher in remote areas than gas or propane.

Alaska’s food production is not competitive with Lower 48 farms because of higher costs of energy here. The result is a very short in-state supply of food.

In short, every aspect of our economy is adversely affected as long as we pay more for fuel here than is paid elsewhere. We can reverse that with in-state use of gas, and it should start with propane in Fairbanks and our villages along the coast and up the Kuskokwim and Yukon rivers.

Ross Adkins of Fairbanks has lived in Alaska since 1960, working as a geodetic surveyor, electrical utility consultant and civil engineer. In North Pole, he owns Forbes Laundry, for which he designed unique heat recovery and water recycling systems.

Comments
(17)
Comments-icon Post a Comment
DistantThunder
|
February 01, 2012
https://gas4alaska.info/Propane.html

ANGDA is Alaska's best hope for quickest and most efficient deployment of the latest propane technologies.

google: Micro-CHP propane

78,400 results, a treasure-mine of info on decentralized efficient cogeneration for all Alaskans.

Innovative Propane Technologies: Micro Combined Heat and Power (CHP)

http://www.youtube.com/watch?v=vcaGQDstDug

http://www.buildwithpropane.com/default.aspx?page=VideosAndDemos

http://world.honda.com/news/2007/c070717Compact-Household-Cogeneration-Unit/

~~~

now Stop and THINK..

HB09-U will eliminate an independent ANGDA.

Do you think for one minute that a vertically integrated statewide gas distribution monopoly will actively pursue great technology like this unless they can control independent sovereign Alaskans within a NannyState framework ??

There is not an energy utility in the state that wants you to have basic heat and power for less than $300/month. It's possible with propane statewide.
Fairbanksgas
|
January 31, 2012
The market is only small right now because propane is the most expensive fuel per BTU. If the cost was equivalent to $2 a gallon of heating oil the contractors would not be able to install clean burning propane boilers fast enough.

Personally I would make the investment in a gas fired co-generation unit and tell GVEA that they were no longer needed. About the size of a dishwasher the latest generation of cogenerators will provide all your electricity and heat your house with the waste heat.
1952tat2
|
January 31, 2012
Thanks for the info! I've been reading in Wikipedia about gas-fired co-generation systems -- in particular, about Micro- and Mini-CHP units -- and I'm plain fascinated by what's there.

I also wonder why combined PV Mini-CHP units aren't the rule for apartment buildings, schools, strip-malls, etc.
robir8
|
January 29, 2012
blues/DT-

I work at a small plant on the slope. We are getting our fuel delivered (diesel/gas) for 35 cents a gallon from Fairbanks in 10k/gal loads. I bet you could get the stuff for $2.00 bucks a gallon, maybe less. I'm surprised FNG hasn't tried. It's just sitting there. Great space heating fuel. I think a guy could beat delivered #1. I wouldn't worry to much about haul road congestion.
DistantThunder
|
January 29, 2012
http://www.youtube.com/watch?v=7ENszaQmDpc

propane makes a great snomobile fuel too..

Do you need glycol on the slope? I can probably figure out a way to backhaul glycol in a 2500gallon bobtail.

BP is all worried about having to account for all the reinjection-propane/ethane, as well they should be.. but I have a way to make BP all happy as a clam at high-tide... we don't really need NGL's mixed in the crude anymore.

We all should be more worried about how to fix the dangerously broken nuke industry..

http://enenews.com/
bluesriff2
|
January 30, 2012
robir8

Where does one sign up? Do you work for the State? How can you get it delivered up there for that price.

The State earns more than $2.00 per gallon on the Royalty oil they sell to the refineries.
bluesriff2
|
January 29, 2012
DT says it can be "plowed in at 4 mph". Even if it only made it to the Yukon River the first year, that would make propane available to everyone from Canada to the Bering Sea and up the Tanana to Nenana.

At Nenana could always transfer over to railcar that could take it all the way to North Pole for GVEA and Flint.

If it has to be trucked for a while, 150 miles is a lot better than 450. My concern is for "long-term" extra traffic on the haul road. AND this will not lower the cost of heat or electricity much if any.

This propane line deserves some real consideration when you consider ITH at Livengood and the potential to open up further resource development along the haul road.
DistantThunder
|
January 29, 2012
bluesriff2.. I'll try contacting you on your fb-page, skyler

Figuring out exactly where to plow the polypipe is harder than plowing it in. In 1970 we pounded survey stakes for the haulroad, our biggest worry was the grizzbears, nowdays we got tons of obstructionist crazy-people... that's why we established the Mental Health Trust Lands, a place for those crazy people, but now they're in Juneau running the asylum.

www.housemajority.org/item.php?id=item20120124-321

If HB09,U & HB189 & HB203 & HB215 are allowed to pass the Senate you can kiss your hopes for having any control over in-state gas goodbye. These bills are like a poke in the eye with a sharp stick. This is like waking up one morning and the Yukon River is gone, somebody stole it !!

http://www.gasline.us.com/category/request-for-proposals/

http://en.wikipedia.org/wiki/SAIC_(company)

google: saic fraud

would you hire the Hell's Angels to babysit your kids ??
bluesriff2
|
January 29, 2012
4)Build a "temporary" 6"-8" propane line to Fairbanks putting in pre-fab fueling stations every 50 miles.

5)First customers at Yukon Bridge. Second customer ITH at Livengood. Third customer GVEA. Two refineries, two military bases, UAF with 6.5 million sq. ft. to heat,

6)Fourth customer a poly-pipe manufacturing plant. After Alaska saves a bundle on all the pipe they will need we can export it on back haul ships that leave the State empty.

7)Use equipment that runs on propane instead of diesel to build the pipe line.

Then the state would be able to build the natural gas pipeline at a greatly reduced cost because fuel is available, the pipe is made locally, and the money from the propane customers would for a large part pay for the building of the large diameter line to Valdez.

This is the quickest way to get affordable energy to the most families and it has many other benefits.

The state DOT can start using propane powered equipment instead of diesel to maintain the haul road. There would be fuel on site instead of hauling it up from Kenai.

www.gas4alaska.info
bluesriff2
|
January 29, 2012
This is the quickest way to get affordable energy to the most families and it has many other benefits.

When will our Interior delegates make a real effort at caucusing with the remote communities to once and for all solve our energy problems?

This includes places like Kodiak, Cordova, Homer, and any community that does not have sub $8.00 per mbtu natural gas or propane.



1)Hire the best lobbyist money can buy. Since it always turns into Anchorage vs. the rest of the State. Anchorage, Kenai, Wasilla, Palmer, and Juneau have 340,000. There are 370,000 Alaskans elsewhere that do not have affordable energy. Surely there are a few Mat-su districts that would have a heart and join us.

2)Hire 1 other person. Sole job is to caucus with all of the remote villages and legislative districts that do not have affordable energy.

3)Read and understand all of ANGDA'a studies on propane distribution AND WHY it is every bit as critical as natural gas.

Lance_Roberts
|
January 29, 2012
So it looks like the problem would be solved by some entrepeneur stepping up and buying the propane on the slope and bringing it down. So why aren't the local propane companies moving on this market? HCCP is critical for our energy needs and for cutting more PM2.5 out of the valley.
robir8
|
January 29, 2012
Lance,

As with everything the devil would be in the details. To market propane on a decent scale one would need a storage facility, a small fleet of haul road trucks and smaller trucks for local delivery. You would need a metering skid, a royalty agreement with the state and a sales agreement with the producers. The propane storage tank at CGF has a discharge valve that is blinded off but no pumps or piping to load trucks. So DT's idea of "craigslist bobtails" might need a little refinement. It would take some capital and a PEA to see if its economic. You get it and I'll buy it.
robir8
|
January 29, 2012
Right now, today and every day 365 days a year there are 37,800 gallons of propane available for purchase at the CGF facility at Pruhoe Bay to anyone who would purchase it. I spoke to the Area Manager personally and know this to be the case. With the political enviroment that exists I'll bet a guy could get it for a good price. As far as I know none of the "big three" Exxon, BP or Conoco market product in Alaska. Seems like this might be an opportunity for Sourdough (ASRC) or Tesoro or the oft reviled Koch brothers or even private capital ( I know a novel idea) to provide a needed service and...maybe...make a buck. Or continue to bitch at the State and expect uncle sugar to make it right. As Mr. Ross is an engineer and a business owner with experience with utilities he may be in a good position to look at such. Some of the commenters may even wish to invest in a venture such as this.

I don't see the relationship between HCCP and wood burning.
99712
|
January 29, 2012


Robir8, your assertion about being able to buy propane on a daily basis is false.

While the area manager may have told you what he believed- no reason to doubt you- the decision for long term, wholesale purchase is above his pay grade.

As you've pointed out above, one needs trucks, a storage facility, etc. No one will make that investment without a long term contract in hand- and agreement from Exxon, COP, and BP.

Exxon was OK with this- but BP told Alaska to go to Hell- hence the AOGCC complaint.

This is a case for a cost of service model. Having Koch or ASRC involved is not going to result in lower priced fuel for Fairbanks- which is the goal. Since ASRC is a 'whatever the market will bear' provider, they have no interest in undercutting fuel oil. (ASRC owns Sourdough).

This is why FNG sells gas at a BTU equivalent price to fuel oil even though they buy gas for a much lower price. FNG applies, 'whatever the market will bear'.

jmacinak
|
January 29, 2012
to have left this easy and doable short term fix completely out of the picture as a political body of this state is shameful. I would expect no effort from the cartel on the slope as little as it would even have cost them. I hope the lawsuit over propane goes to trial soon. It is a waste to put such vast amounts of valuable propane back in the ground, as events have bore out in Fairbanks and the bush villages and towns. Where is the "benefit to the people" from pumping all of that surplus propane back into the ground (after stripping the oil out) and letting the air in Fairbanks go to hell? That`s WORSE than "no benefit",..it`s a MORE poisoning benefit. If these companies don`t agree to get new oil and gas to market then they ought to be broken up as a "unit", give up the leases they are not producing on, and new leases let to more ambitious companies like Eni and Great Bear, Pioneer and Anadarko and others put their ambitions into real and substantive efforts.
99712
|
January 29, 2012


P-2

And where is the oil company lobbyist governor? He was asked to act here. But Parnell is missing in action. This AOGCC complaint had to be filed by a private citizen while Fairbanks and rural Alaska struggles mightily without affordable energy or clean air.

Good work, Harold!
99712
|
January 29, 2012
P-1

Good piece, Ross.

Where are our elected officials? Like the governor and legislators that all gave themselves huge pay raises recently.

And how about we identify that it is BP that would rather re-inject the propane back into the ground than make it available to those who actually own it- i.e., Alaskans.

BP does very well in Alaska, making windfall profits while Alaskans to pay for much of the infrastructure on the North Slope- to include the equipment that separates propane from the gas stream.

But BP always acts the part of the convicted corporate felon that it is in almost every instance. Whether it is conspiring to do business with Libya in exchange for the release of a terrorist who blew up a Pan Am 747 killing the entire plane load of passengers, to the befouling of the Gulf of Mexico, to allowing its lines to run to failure at Prudhoe Bay.
Newsminer.com encourages a lively exchange of ideas regarding topics in the news. Users are solely responsible for the content. Comments are not pre-approved by News-Miner staff. Please keep it clean, respect others and use the 'report abuse' link when necessary. Read our full user's agreement.