Providing coverage of Alaska and northern Canada's oil and gas industry
March 2010

Vol. 15, No. 10 Week of March 07, 2010

Poll: pessimism on gas line

More than half surveyed have AGIA doubts; many OK with oil tax increase

Wesley Loy

For Petroleum News

Many Alaskans are skeptical the Alaska Gasline Inducement Act will deliver a natural gas pipeline, a poll prepared for the state Legislature shows.

The Dittman Research poll put this question to Alaskans:

“How confident are you that former Gov. Palin’s AGIA plan will be successful in getting a natural gas pipeline for Alaska?”

Well over half of the 402 respondents expressed serious doubt, with 39 percent answering “not too confident” and another 20 percent answering “not at all confident.”

Pollster Dave Dittman said the results reconfirm a sense many Alaskans have held for quite a while now about AGIA.

“The mood is pretty depressed,” he said.

Dittman conducted the 25-question poll for the predominantly Republican House majority. The survey is done annually to provide guidance to the legislative leadership on issues of importance to Alaskans.

The scientific survey was done Feb. 9-22 and targeted a representative sample of Alaskans based on such criteria as urban or rural residency, party affiliation and gender, Dittman said. The sample did skew a bit toward older Alaskans, he said, as younger people are harder to reach because they’re out and about more and have only cell phones as opposed to home phones.

The Legislature passed former Gov. Sarah Palin’s AGIA legislation in 2007.

It set up a competition for companies to bid for a package of state financial and other incentives aimed at encouraging development of a pipeline to carry the 35 trillion cubic feet of known North Slope gas reserves to market.

The winning firm under AGIA, TransCanada Corp., is proposing a 1,700-mile pipeline linking the major Prudhoe Bay gas field to the existing pipeline network in Alberta. In documents filed recently with the Federal Energy Regulatory Commission, TransCanada estimated its project would cost $32 billion to $41 billion, a staggering price tag that spawned pessimism among some Alaskans.

TransCanada is partnering on its project with ExxonMobil, a major North Slope gas owner.

The Slope’s other two top gas owners, BP and ConocoPhillips, are proposing a competing pipeline project they call Denali. The route is much the same as with the TransCanada line.

Both gas line partnerships plan open seasons later this year to try to recruit sufficient commitments from gas shippers to secure the financing and permits necessary for construction.

Whether any of this will actually yield a pipeline is unclear.

Alaskans have waited for decades for a gas line to complement the 800-mile trans-Alaska oil pipeline, a megaproject that made over Alaska’s economy after it began operations in 1977.

The state’s politicians and economic development boosters see a gas line as a vital next step for Alaska’s economic well-being.

Dittman’s poll covers other energy topics such as the importance Alaskans place on supplying gas for local needs and which energy sources people favor most.

On energy sources, the results are perhaps surprising with 37 percent of survey respondents supporting natural gas the most, 20 percent favoring wind power, 18 percent supporting hydroelectric, and 24 percent backing other sources.

Some state legislators favor a large hydroelectric dam along the Susitna River or elsewhere as a way to meet local energy needs as Cook Inlet gas supplies dwindle.

Overall, the poll reflects the many choices Alaskans have when it comes to energy — perhaps too many choices, said Dittman, who tends to work mostly for Republican clients.

“We just have an embarrassment of riches. We have so many options we don’t know what to do,” he said. “We’re just kind of frozen into inaction.”

Here are several questions with results from the Dittman poll:

How does Alaska’s economy in the future look to you?

Very good — 9 percent

Quite good — 52 percent

Not too good — 31 percent

Pretty bad — 6 percent

Unsure — 2 percent

As energy needs in the area where you live continue to grow, which source of energy do you support the most for the future?

Natural gas — 37 percent

Wind — 20 percent

Hydroelectric — 18 percent

Geothermal — 8 percent

Nuclear — 6 percent

Coal — 5 percent

Solar — 5 percent

I’m going to read three different points of view regarding a natural gas pipeline from the North Slope. Please tell me which description comes closest to your own personal point of view.

It’s by far the most important thing for Alaska’s economic future — 33 percent

It’s important, but we shouldn’t lose sight of other economic opportunities — 62 percent

It’s a waste of time and a boondoggle that probably won’t happen — 5 percent

How confident are you that former Gov. Palin’s AGIA plan will be successful in getting a natural gas pipeline for Alaska?

Very confident — 7 percent

Quite confident — 27 percent

Not too confident — 39 percent

Not at all confident — 20 percent

Unsure — 7 percent

Which do you think is the most important benefit of a natural gas pipeline from the North Slope?

The in-state use for heating, electricity and industrial development — 51 percent

The jobs it will provide — 35 percent

The money it will provide to the state and Permanent Fund — 12 percent

Unsure — 2 percent

In addition to a potential $40 billion natural gas pipeline from the North Slope to the Midwestern United States that could take 15-20 years to build, do you feel the governor and state Legislature should or should not give serious attention to supporting a smaller $20 billion gas line from the North Slope to tidewater in Southcentral Alaska that could be built within 10 years and provide gas for in-state use as well as for export?

Should — 86 percent

Should not — 10 percent

Unsure — 4 percent

Do you support using Permanent Fund earnings left over after paying dividends and inflation-proofing to help finance an in-state natural gas pipeline?

Support — 57 percent

Oppose — 41 percent

Unsure — 2 percent

Alaska’s tax on oil production was significantly increased two years ago. Since the oil tax increase, there has been an almost 20 percent decline in the number of wells being drilled in Alaska, and oil and gas companies have announced future reductions in spending. Some people believe the higher tax has led to the reduction in oil industry exploration and investment in Alaska, while other people disagree. What is your opinion?

Has led to reduction — 45 percent

Has not led to reduction — 49 percent

Unsure — 6 percent

How would you rate the job Gov. Sean Parnell and the executive branch of state government is doing these days?

Strongly approve — 12 percent

Somewhat approve — 69 percent

Somewhat disapprove — 12 percent

Strongly disapprove — 2 percent

Unsure — 5 percent

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