Gov. Frank Murkowski crammed an extensive round of meetings into a visit to Washington, D.C. the week of June 20 in hopes of shaking the proposed Alaska gas pipeline out of its apparent doldrums.
Murkowski’s goal: Presenting a workable gas line development agreement to a special session of the Alaska Legislature this fall. Initially, the gas line would ship 4.5 billion cubic feet a day of natural gas to the Midwest from the North Slope’s 35 trillion cubic feet of known reserves. The line eventually could tap as much as 200 tcf of gas in the region.
“The governor’s attempting to accelerate the pace of negotiations by reaching out to the Canadian government, federal agencies and others, initiating dialogue and discussing the overall process,” Murkowski’s senior adviser on energy, Mike Menge, told Petroleum News June 23.
Post misconstrued Murkowski’s comments, says Menge
Murkowski met early in the week of June 19 with Canadian ambassador Frank McKenna and a reporter from the National Post of Canada to urge the Canadian federal government to carefully evaluate all options and make a decision on how the Canadian leg of the 3,500-mile gas line will be structured and whether the existing Northern Pipeline Act should be retained to regulate the line.
NPA, a law Canada ratified 25 years ago, designates a corridor of land through the Yukon Territory and aboriginal lands and designates Canada’s largest pipeline company, TransCanada PipeLines Ltd. as the owner of the right to build and operate a gas pipeline through that corridor.
The Big 3 North Slope producers — BP, ConocoPhillips and ExxonMobil — have criticized the law as being too old and unworkable, urging Canada to choose a pipeline operator through competitive bid.
Enbridge, Canada’s second-largest pipeline company, is also intensively lobbying Ottawa for the right to bid for the line.
TransCanada officials, however, consider NPA a fully functional document and their company 100 percent owners of the Canadian portion of the gas line.
“We’re prepared to be flexible on the Alaska side, but to date, we haven’t negotiated anything on the Canada side where we own 100 percent of the line,” TransCanada spokesman Kurt Kadatz said June 23. “If someone has some ideas, obviously we’re going to listen.
In highlighting benefits in TransCanada’s existing permits to the Post, Murkowski cited problems Canada has encountered putting together a deal for the proposed Mackenzie gas line “as evidence of what happens when things are not attended to,” Menge said.
The Post reporter, however, misconstrued much of what Murkowski said in the interview, according to Menge.
Canada taking too long, says Murkowski
When Murkowski visited Ottawa in February, he was told the Canadians he would decide on its strategy for developing the Canadian portion of the Alaska gas line “in a week to 10 days.”
“But it didn’t work out that way,” Menge said. “Now the governor is growing concerned with a lack of decision coming out of the (Canadian) government.
As to which approach Canada should take, “we honestly don’t know,” Menge said. “But the governor told me he understands that it’s their decision to make.”
Equity position on both sides of border
Murkowski also shared his longtime conviction that Alaska should take an equity position in the Canadian portion of the gas line as well as one on the Alaska side.
Murkowski discussed the pipeline’s $18 billion loan guarantees with Energy Secretary Samuel Bodman and regulatory process issues with officials of the U.S. Department of Interior and the Federal Energy Regulatory Commission.
Rail link critical
He also briefed Secretary of Transportation Norm Mineta on the possibility of linking Alaska’s rail system with those of British Columbia and Alberta through the Yukon. A joint $5 million Alaska-Yukon feasibility study is underway for a proposed corridor for the gas line, rail link and a fiber optics communication line.
Menge said the governor recognizes that the gas line and the rail link are two separate projects, but they have synergisms. “He’s not trying to tie them together. He thinks there are a lot of opportunities to be explored, but they are both on separate trajectories.”
Murkowski and Yukon Premier Dennis Fentie spoke to the National Press Club June 23 on the gas line and possible rail link.
When asked about their positions on proposed oil and gas exploration of the 1002 Section of the Arctic National Wildlife Refuge, Fentie said he continues to back Canadian opposition to drilling, but he came to Washington to discuss the gas line and proposed rail corridor, Menge said.
Murkowski reiterated his confidence that Alaska can responsibly explore ANWR’s coastal plain. “We continue to think we can do it right,” Murkowski added.
