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Study touts benefits of state-built natural gas pipeline

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Posted: Tuesday, December 6, 2011 11:31 pm | Updated: 1:31 pm, Wed Jan 16, 2013.

FAIRBANKS — A new study touts the benefits to Fairbanks of a state-built gas pipeline across Alaska, saying the project could slash local energy costs by as much as 80 percent while significantly improving air quality.

The $21,500 study was commissioned by the Alaska Gasline Port Authority, which supports construction of a large-diameter line from Prudhoe Bay to Valdez. The study, by PDC Harris Group in Anchorage, follows another AGPA-funded study from July that said a gas line would generate billions in revenue for both the state and the gas producers by focusing on selling liquefied gas to Asian markets.

“It all tells the same story,” said AGPA project manager Bill Walker. “Alaska is in the best position of anyone out there with natural gas.”

The Harris Group study, released Tuesday, estimates a large-capacity gas line could translate into huge savings for many Fairbanks residents — about $3,000 per household — by allowing them to switch from expensive fuel oil to natural gas. An undetermined amount of savings would also be realized through lower electric rates, according to Harris Group general manager Michael Moora.

Moora, the lead author of the study, acknowledged the study took a “very preliminary” look at local energy costs, targeting homes around the cities of Fairbanks and North Pole that could be part of a potential distribution network. The estimate doesn’t include a cost estimate for such a system, and Moora said the savings estimate could vary by as much as 30 percent.

The gas line — which would include a spur from Glennallen to Southcentral — would bring energy savings to communities in every region of the state, Walker said.

AGPA unveiled the study Tuesday at a Fairbanks North Star Borough conference room, saying it’s more evidence that supports the construction of a state-funded gas line. Walker said it’s time for Gov. Sean Parnell and the Legislature to abandon the Alaska Gasline Inducement Act — an ongoing effort to promote private investment in pipeline construction with state matching funds — as a failed program.

“We’re the poster child for how not to develop your resources,” Walker said.

Displacing fuel oil with cleaner natural gas would also ease the air quality concerns that plague Fairbanks, the study said. Much of the borough is considered a “non-attainment” area by the federal Environmental Protection Agency because of particulate pollution.

“That conversion got us to attainment,” said Fairbanks North Star Borough Mayor Luke Hopkins. “I don’t see another model that gets us to attainment.”

Rep. Bob Miller, D-Fairbanks, attended the presentation on Monday and said he’s sold on the benefits of an all-Alaska gas line. But he said there’s a reluctance among some legislators to abandon AGIA because it could be viewed as backing out of a deal while the process is still under way.

“For me, this is the one that makes sense … It takes care of the whole state in every aspect,” Miller said.

Walker said a third AGPA-commissioned study, which looks at the potential job creation of a gas line, should be completed in about three weeks.

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