February 15, 2008 --- Vol. 14, No. 20February 2008

Palin say ‘competition is working’ is working for gas line

Alaska Gov. Sarah Palin responded yesterday afternoon to a statement earlier in the day from ConocoPhillips that it planned to move ahead with plans for summer field work, even though the company said the governor isn’t interested in its proposal for an Alaska gas pipeline project.

ConocoPhillips also said “it is reassessing how best to advance the Alaska North Slope gas pipeline project as a result of the lack of engagement by the State of Alaska on the company’s proposal submitted Nov. 30, 2007.”

“Conoco is correct to a point — we are not willing to engage in an exclusive negotiation with them at this time. Keep in mind that we need two principle components to make a project happen: We need a pipeline and we need gas,” the governor said.

She said the application the administration is considering was submitted under the terms the state asked for to ensure “that Alaskans benefit from the project,” that there are milestones so progress can be measured and that the pipeline has open access. “In short, we need a pipeline that is good for Alaska,” Palin said.

The administration has “an obligation to conduct a good-faith evaluation of TransCanada’s application,” she said. “… In order to evaluate its application in good faith, we cannot permit a negotiation with ConocoPhillips to color the decision-making. We have relayed this to ConocoPhillips.”

Palin said “we are more than willing to engage in a discussion about the gas terms at the appropriate time.” The administration is open to changing the gas terms set out in the Alaska Gasline Inducement Act, she said, as long as changes “are fair, reasonable and based on data. Moving forward to an open season will give us the necessary data to make sound decisions on those gas terms.” And, she said, the Legislature would have to be involved in any such changes.

As for ConocoPhillips’ plans to go ahead with summer field work, Palin said the administration is relying on competition to advance the gas pipeline project. “Competition is what AGIA is all about.”

She said the administration doesn’t know if an AGIA license will be awarded, “but if ConocoPhillips is going to go out and spend tens of millions of dollars conducting field work, then I have to ask, ‘What’s the problem?’ Simply put, competition is working.”


The news bulletin we sent yesterday afternoon about Shell’s Beaufort Sea drilling program had a misleading headline: “Shell says no Beaufort drilling in 2008.” It should have said, “Shell says no Beaufort oil drilling in 2008, or “Shell says no to critical Beaufort drilling in 2008,” because Shell hopes to drill some shallow wells — “top-hole wells” — that would not go deep enough to penetrate hydrocarbon reservoirs (1,000-1,200 feet).

That brings me to an error in the article. We said “petroleum” reservoirs, which most people take to mean oil, not gas. “Hydrocarbon” was the actual word used by Susan Moore, Shell’s operations manager in Alaska.

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