Fairbanks Daily News-Miner editorial
Alaska now has something that looks like a plan for getting a pipeline built to bring North Slope natural gas to market.
This is Gov. Sean Parnell’s baby. Whether you agree with it or not, you ought to hope it works out and that the cost and risk to the state isn’t beyond reason. Alaska, ever so reliant on revenue from its natural resources, needs to see a gas line built to carry the state forward as the oil years recede.
“Alaskans have waited a long time for a gas line, and for the first time in our history, we have alignment, authorization from the Legislature, and a clear path forward,” the governor said following the Legislature’s final passage of his gas line bill. “The Alaska LNG Project has begun.”
That’s a big-time statement from the governor.
What the Legislature has approved is this, in a nutshell, to get an 800-mile pipeline system built from the North Slope to tidewater in Southcentral Alaska for export to Asia-Pacific markets:
• The state will become a 25 percent owner in the project.
• Project partners will include TransCanada (formerly of Alaska Gasline Inducement Act involvement), the major North Slope producer companies, and the Alaska Gasline Development Corp., which will lead the project.
• Contracts will come to the Legislature for approval.
• The pipeline will include several locations at which gas can be removed for use in Alaska.
• The project will next enter a phase in which the cost and engineering will be refined.
• Construction could begin in 2019 and be finished by 2023.
Passage of the gas line legislation, Senate Bill 138, pairs with an agreement signed in January by the state, the oil companies, Trans-Canada and the Alaska Gasline Development Corp. That agreement specifies, in general, such things as guiding principles, benefits to the parties, a timeline, the state’s participation, and regulatory framework, among other subjects.
Concerns have been raised by some, including former Gov. Frank Murkowski, who believes the January agreement is bad for Alaska. He believes the state has given up too much, including its 12.5 percent severance tax, and put itself at significant risk should the project not succeed.
The January agreement and passage of the gas line legislation this past weekend may indeed prove successful where other efforts have failed. Alaskans have heard it before.
There was lots of gas line excitement back in 2007, for example, when Gov. Sarah Palin signed her Alaska Gasline Inducement Act, the structure that the state recently jettisoned because it appeared that it wasn’t going to produce a gas line. Gov. Palin came to Fairbanks to mark passage of her bill that year and enthused about it beneath the trans-Alaska oil pipeline. “It’s been Alaska’s economic lifeline for a generation,” she said of the oil line. “Now it’s time for a new generation of energy for Alaska — it’s time for our gas line.”
Gov. Murkowski was optimistic about the pipeline agreement his administration had reached with ConocoPhillips, BP and Exxon Mobil, but he couldn’t find support in the Legislature.
More than a decade ago, in 2001, Gov. Tony Knowles told his fellow members of the Interstate Oil and Gas Compact Commission that the time had come to develop Alaska’s gas. “What we have been waiting on is commercial viability. I think it is here,” he said. “The time is right. Let’s get on with the project.”
Cross your fingers that Alaska has the correct plan in place this time.