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Alaska Highway gasline tops Knowles’ session agenda Multiple bills introduced to promote gas pipeline; governor also asks money to jump start permitting, right-of-way work Kristen Nelson PNA News Editor
A gasline to the Lower 48 has been the focus of the Knowles’ administration since the governor said in August that he believed Alaskans could “be on the working end of a shovel breaking ground on a natural gas project” within about two years.
Gov. Tony Knowles said then that he was dedicating “myself and my administration to ramping up our efforts to do all that needs to be done to accomplish this task.”
Jan. 10 the governor said he was proposing legislation to facilitate development of a natural gas pipeline. He also said he had signed an administrative order to establish one-stop state gasline permitting and oversight, and was seeking a $4 million appropriation from the Legislature “to jump start construction of a pipeline that follows the Alaska Highway by beginning work on needed permits and rights-of-way.” “My way IS the highway” “For nearly 20 years now, many Alaskans have worked long and hard to sell North Slope gas to markets in Asia,” Knowles said in August. “But,” he said, “those efforts have been frustrated by a single factor — the market simply hasn’t been there for Alaska. Try as many of us have, we can’t force that market. Right now, six countries already are supplying Asia with all the gas it needs. These six — Qatar, Abu Dhabi, Malaysia, Indonesia, Brunei and Australia — have proven reserves of natural gas totaling 640 trillion cubic feet. That’s enough to meet the Far East’s energy needs for 170 years.”
But, he said, the need for gas in the Lower 48 provided an opportunity for Alaska gas to go to market by pipeline. Two routes were being considered — across the top of Alaska and down through Canada and down the trans-Alaska pipeline right-of-way to Delta Junction and then along the Alaska Highway through Canada.
In November Knowles said the Alaska Highway route was clearly best for Alaska. “My way IS the highway,” he said, noting that the goals of jobs for Alaskans, gas for instate use and revenues to the state were all best served by the Alaska Highway route. Coordinator, statutory change In bills introduced in both houses of the Legislature in early January, Knowles proposed statutory changes to the “stranded gas” act to broaden that legislation to include any natural gas project and extend the deadline for applications under the act from June 30, 2001, to Dec. 31, 2001.
The stranded gas legislation as passed in 1998 allowed the state to negotiate fiscal terms for a liquefied natural gas project. The governor’s proposal would allow fiscal terms to be negotiated for any gas development project which met the statutory requirement of producing at least 500 billion cubic feet of natural gas within 20 years of the beginning of commercial operations.
A bill to amend the stranded gas act to include other gas development has also been introduced in the House by Rep. Joe Green while Representatives Brian Porter and Eldon Mulder have introduced a bill specifying that the highway route is in the best interest of the state of Alaska.
Knowles’ administrative order created a natural gas policy cabinet and a state pipeline coordinator to coordinate state permits and authorizations and to oversee construction of a pipeline to transport Alaska North Slope natural gas to market.
The natural gas policy cabinet includes the commissioners of the departments of Natural Resources, Environmental Conservation, Fish and Game, Revenue, Transportation and Public Facilities, Labor and Workforce Development, Community and Economic Development, and the director of the Division of Governmental Coordination, the director of the governor’s office in Washington, D.C., and the Attorney General.
Each agency involved in pipeline permitting and authorization will appoint a liaison officer to the pipeline coordinator’s office to represent the agency. These liaison officers will process gasline permits and authorizations for their agency, assist with authorizations by other agencies and manage and perform work necessary to oversee construction of a gasline.
“The order establishes a fully integrated state organization that utilizes existing government structure and processes to the maximum extent possible, minimizes impacts to existing agency functions and promotes internal alignment of state agencies,” Knowles said. Natural Gas Policy Council yet to be named In November, Knowles said he planned to name a Natural Gas Policy Council and ask it to consider and recommend to Alaskans, the Legislature and the administration the answers to a number of questions: what should Alaska do with its 12.5 percent gas royalty? How should gas be provided to communities along the pipeline route and to other areas, like Southcentral, that may need it in the future? How can the state plan for future projects, such as liquefied natural gas and gas-to-liquids, and what should be done with gas liquids? Should Alaska participate in the projects?
This council has not yet been named, but Knowles said Jan. 10 in his state-of-the-state address that he planned to appoint the council soon “to ensure Alaskans realize the maximum benefits from this project. This includes feedstock for new industries, community access to gas and future gas projects.”
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