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Governor, legislators pleased with Denali
Both the governor and lawmakers seemed pleased by the BP-ConocoPhillips announcement of their joint-venture Alaska North Slope to market gas pipeline project, although both the administration and legislators were left wondering where the announcement leaves the Alaska Gasline Inducement Act process, the state’s effort to jump start a gas pipeline with $500 million in matching funds in exchange for meeting 20 state “must haves.”
Gov. Sarah Palin was briefed April 8 by BP and Conoco prior to the companies’ Anchorage press conference.
“It sounds great for the State of Alaska,” she told reporters later in the day.
Palin said she looked forward to hearing more details from the companies and “to the progress that they’ll be able to show us on this project.”
She credited the competition AGIA created, and said “this further proves that competition does work, that AGIA being built on competition and ultimately allowing choices for Alaskans, the resources owners” will allow the state to finally commercialize North Slope gas.
“Whichever project gets us there first — in Alaska’s best interest — is what we’ll be supporting,” she said.
Palin said the announcement does not change the administration’s May 19 schedule to produce findings on the TransCanada application for an AGIA license.
The governor said BP and ConocoPhillips told her they were “very open” to third parties in the project and said she thought that movement could be attributed to AGIA, “because remember AGIA invites competition, what we wanted to build that on was inviting new companies into the state to explore, to produce, to hook up with one another … and create a partnership to … finally progress this project.”
Palin said she credits Alaska’s lawmakers for the position the state is now in, because “they did not cave last time to demands of an administration and of the producers,” referring to the Stranded Gas Development Act fiscal contract the Murkowski administration urged the Legislature to approve. The Legislature never voted on the contract.
“They changed the playing field here; and I believe that is what has allowed the companies to get off the dime, to start working towards commercializing our gas; and I think credit is due to lawmakers.”
Having producers in the game a good thing House Speaker John Harris, R-Valdez, said at a Republican leadership press conference that he believes “that the actions that the Legislature and the administration have taken in the past year or two have helped to facilitate this; I think that’s positive.”
Harris said that when he met with BP and ConocoPhillips he “encouraged them to not only push their project forward but also work with Alaskans and the folks who want to do in-state gas and who want to get gas for Alaskans.”
There was general agreement that having the producers in the game was a positive thing.
Senate Resources Chair Charlie Huggins, R-Mat-Su/Chugiak, said with BP and ConocoPhillips there are two large organizations which “bring pipe and they bring gas,” and said the announcement “puts Alaska on the high ground.”
House Majority Leader Ralph Samuels, R-Anchorage, said having two shippers in the game isn’t “a silver bullet that’s going to get us a gas pipeline, but it is, for sure, a step in the right direction. They’re going to play a role in this process and the sooner that they play a role in the process and are willing to engage in a public forum or with government the better off we all are.”
House Rules Chairman John Coghill, R-North Pole, agreed. “I think one of the questions we’ve asked … under AGIA is where are those people that produce the gas — and so here they are. So I think this could be a win-win.” He credited the governor and AGIA with getting “us on the quest of asking the questions: what’s economical; what’s not; what are the criteria.” Should state have equity interest? Senate President Lyda Green, R-Wasilla, said while the companies haven’t asked for state participation, there has been regret that Alaska did not have a seat at the trans-Alaska oil pipeline table.
Samuels said he would certainly “oppose the state owning 51 percent and having … a political body managing the pipeline,” but thinks there were a lot of reasons the state might want to have a small equity position.
There didn’t seem to be any sentiment in favor of dropping AGIA. Harris said keeping the process competitive if the state didn’t award an AGIA license was an issue that has a lot of people concerned.
Sen. Gene Therriault, R-North Pole, the Senate Minority Leader, told the press April 10 he wasn’t convinced AGIA should be dropped. BP and Conoco didn’t have to ask the state’s permission to start their project, he said, and they don’t have to ask the state’s permission to stop.
If competition is good for AGIA, he said, competition for the BP-Conoco project is good, too.
Therriault said he expects the companies to come back and ask about fiscal certainty, and credited the governor with standing up to the companies — along with the high price of energy — for the BP-ConocoPhillips joint venture announcement.
—Kristen Nelson
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