All-Alaska gas line goes for signatures

Port authority LNG project takes its case to the Alaska State Fair; Logsdon: leases give oil companies an advantage with the state

The Associated Press

Supporters of an all-Alaska gas pipeline are taking their case to the Alaska State Fair and may be headed to Juneau next year to oppose alternative projects.

That could be a problem for Gov. Frank Murkowski if he presents the Legislature with a gas pipeline contract with major oil companies, which are talking about a pipeline from the North Slope down through Canada to the Lower 48.

“I think at that point we would try to influence the Legislature in some way not to approve that and make it be an all-Alaska line,” said Mat-Su Borough Mayor Tim Anderson, president of the Alaska Conference of Mayors.

The Alaska Gasline Port Authority, led by the city of Valdez and the Fairbanks North Star Borough, has a proposal for a pipeline that would go from the North Slope to Valdez. The gas would then be chilled into a liquid and shipped south in tankers.

Supporters of the all-Alaska pipeline suffered a setback when Sempra Energy stopped funding their project. But they picked up some momentum in August when the mayors’ group and the Alaska Municipal League passed resolutions in support of their project.

The chairman of the gas line authority, Fairbanks North Star Borough Mayor Jim Whitaker, said the group’s talks with Murkowski aides are on hold. That’s because the Murkowski administration has put the emphasis on working with the oil companies, he said.

“We’re mystified that an organization that is valid and endorsed by people of the state through election — endorsed by the mayors and the municipal league — why that organization continues to be put on the shelf and the emphasis put on the producers,” he said.

New proposal submitted Aug. 22

Logsdon conceded that the oil companies have an advantage. BP, Exxon Mobil and Conoco Phillips hold leases to the North Slope gas reserves. The state could cancel the leases, as some have suggested, but that would be bitterly contested and delay getting a pipeline built, Logsdon said.

“They do come into any negotiations from a very strong position because of the fact they hold the leases,” Logsdon said.

The oil companies say they spent a lot of time and money looking at an all-Alaska route and it does not make enough money. They say a route along the Alaska Highway through the Interior and Canada to the Lower 48 provides the real chance for the multibillion-dollar project.

Judy Brady, executive director of the Alaska Oil and Gas Association, said the project with the best economics will get built, not the one that gets the most signatures at the fair.

She said her oil industry trade group does not have an official position, but she’s worried about the Mat-Su mayor’s talk of fighting a contract that goes through Canada.

“Self-sabotage is what Alaskans are really good at. We’ve done it before and probably will again,” Brady said.

Begich: Bottom line gas to Southcentral

Oil company representatives have said that, after a contract is reached with the state, the next step will be for the companies to spend a billion dollars on preparation work needed for regulatory applications to U.S. and Canadian energy boards.

Backes said she believes that Murkowski is liable to present the Legislature with a gas contract with the oil companies and not one for an all-Alaska pipeline. Her group is at the fair collecting signatures to present to the Legislature. The petition asks the Legislature to tell Murkowski that it wants an all-Alaska line.

Anchorage Mayor Mark Begich said the bottom line for him is getting gas to Southcentral Alaska, given forecasts of a looming shortage of the Cook Inlet natural gas that fuels the region.

Not all Alaska municipalities supported the all-Alaska Route. Bill Popp, oil and gas liaison for the Kenai Peninsula Borough, said his government is not supporting one project.

“There’s not enough information out there to say any project is viable yet,” Popp said.