Russian Gas - Letter To Editor By Former City Commissioner

Posted on Saturday, January 07 at 10:30 by hjbald
The "History of Rate Adjustments for Residential Customers" on the ATCO Gas web site shows that the gas 'costs' ranged from $1.469/GJ on January 1, 1990 to $2.370 on February 1, 2000, with a high of $3.091 on September 16, 1999 and a low of $0.913/GJ on April 1, 1995. Gas 'costs' were truly regulated by the old Alberta Utilities Board (AUB) until 2000, allowing for a fair return to the producer. Then the Klein Government, with Steve "Genghis Khan" West running wild in the Energy Department, deregulated natural gas and approved the wholesale selling off of Alberta gas to the US markets through the new 'Alliance Pipeline' from Alberta to Chicago, including for the first time all the 'derivatives' of the gas which up till then were preserved for Alberta's struggling secondary and tertiary gas processing plastic industries. At the same time Steve West shut down the AUB and replaced it with the toothless Alberta Energy and Utilities Board which merely 'approves' the gas prices. Since 2000, gas 'prices' are set by the US market, and the 'price' now ranges from $2.716 on April 1, 2000 to $15.037/GJ on January 1/2006 It is very likely that the 'COST' of gas today is close to $2.37/GJ. The unearned profit of the gas producers is presently in the range of $13.667/GJ Perhaps Mr. Levenson would agree that rather than building another gas pipeline from Russia, we should send Ralph Klein and Steve West to Siberia. We could then reconstitute the AUB and instruct it to regulate gas costs for Albertans once again. Phillip H. Walker, 9236-58 Street NW, Edmonton, Alberta, T6B 1L6 Tel. (780) [witheld] ************************************************************************************************************************* Publication: Edmonton Journal; Date:2006 Jan 05; Section:Letters; Page Number: A19 Where can we buy Russian gas? Compared with what we pay, it’s a bargain After reading David Marples’s Dec. 30 column on Russia’s proposed natural gas price increase to Ukraine (“Gazprom on the warpath with blessing of Putin government,”) I’m wondering how I could go about purchasing some of that gas myself. Even at the increased price, it’s half of what we’re currently paying in Alberta. The figures Marples uses are priced in US dollars,and the units are thousand cubic metres (mcm), so it takes a bit of calculation to determine the equivalent price in Canada. I’m billed in Canadian dollars,and the units are in thousand cubic feet (mcf). The current Canadian-to-US-dollar exchange rateis 1.15571. The current priceofnaturalgas,as listed on the DirectEnergyRegulatedServices.com website, is $15.037 Cdn per mcf (DERS is understandably quick to point out that naturalgas prices are set monthly by Alberta’s Energy Utility Board). The metricconversion is 35.315 cubic feet to the cubic metre. Ukraine is complaining that the price of natural gas is going upfrom $50 US ($57.79 Cdn) to$230 US ($265.81 Cdn) per mcm. However, if one does the conversion calculations, we find that, in Alberta, we pay $531.03 Cdn per mcm! And that doesn’t include the “administration” fees imposed by DERS, which typically make up about 22 per cent of my monthly billing. Since the U.S. and Canada are hell bent on building northern pipelines through theMacKenzieDelta anyway, and since the ArcticOceanis rapidly becoming navigable due to the melting of the polar ice cap, it would make more sense to ship naturalgas from Russia over the polar route. Even with the cost of shipping, we would get cheaper natural gas! So this is the “free market” Alberta advantage! Martin Levenson, Edmonton http://ee.canada.com/daily/Skins/EdmontonJournal/navigator.asp?skin=EdmontonJournal&BP=OK

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