August 30, 2001 --- Vol. 7, No. 107August 2001

Knowles calls for federal legislation to make highway gas pipeline economic

Alaskans have been most successful in resolving issues when we stood united, Gov. Tony Knowles said Aug. 30, offering statehood and construction of the oil pipeline as examples. Alaskans must now stand together on three current issues, he said: settlement of the subsistence divide between rural and urban Alaska; oil and gas exploration on the coastal plain of the Arctic National Wildlife Refuge; and an Alaska initiative for federal legislation to make the Alaska Highway gas pipeline economic and in the interests of Alaska and the rest of the nation.

"We know we accomplish the most when we work together," the governor told members of the Resource Development Council for Alaska.

On subsistence, Knowles said, "a failure to reach an Alaska solution to subsistence threatens to permanently divide Alaska." The social rural-urban divide is giving Alaska a black eye outside of the state and is also bad for business, Knowles said, especially in a state where Native owned businesses make substantial contributions to Alaska's economy.

ANWR drilling has passed the House, he noted, and said work is needed to get the measure through the Senate.

On the gas pipeline, Knowles said Alaskans need to come together and make a consolidated presentation to Congress for National Interest Gasline Legislation including 10 provisions:

Mandate the already permitted Alaska Highway route as the preferred gasline route and provide access to gas for Alaskans as well as providing access to the pipeline for new discoveries. Existing natural gas, the governor said, could keep the pipeline full for 30 years, and the state wants to keep its oil and gas industry healthy through new leasing, exploration and production. The legislation should also expand opportunities for new pipeline participants, including existing producers, pipeline companies and major Alaska companies such as Arctic Slope Regional Corp., CIRI and Doyon, and possibly the state.

Alaska and Alaska Native hire provisions must be included, as well as a provision to use Alaska businesses and a project labor agreement for the construction, operation and maintenance of the pipeline, and provisions for worker training. There must be a priority for the use of American and Canadian steel.

The federal legislation must, Knowles said, find that the Alaska Highway gas pipeline is in the national interest and must include economic incentives such as accelerated depreciation, an investment tax credit and gas tax credit to give investors an additional level of confidence.

The end of September is the target for a federal legislation package, he said, with October hearings possible. Knowles said that in addition to the work of the gasline policy council, he is working with the producers to continue to flesh out the 10 points and will be meeting with five pipeline companies next week.

The goal, he said, is to go to Congress with a united front.

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