Parnell funds two gaslines, vetoes third

Alaska Gov. Sean Parnell kept funding for two major prospective natural gas pipelines in his fiscal year 2012 capital budget unveiled on June 29, but vetoed a smaller third project.

Parnell kept $200 million for in-state gas pipeline development and $60 million to advance a large-diameter line under the Alaska Gasline Inducement Act, but vetoed $10 million for a project to bring natural gas to the Homer area from Anchor Point.

The decision came in a $400 million veto package that brought down the energy-laden capital budget to about $2.8 billion.

Parnell said the in-state funding should not be considered competition against a large diameter line whose economic viability many lawmakers are beginning to question.

“I think we have to pursue all options,” he said. “This $200 million is in a savings account. It’s not a check being written out. In fact there is about $21.5 million in the operating funds separate from that going to the Alaska Gasline Development Corp. to do their work next year. The bottom line is until we have a project that is ready to go, we are still going to pursue all options to commercialize that gas for Alaskans.”

House Speaker Mike Chenault and Alaska Gasline Development Corp. President Dan Fauske will present a plan on July 5 for development and financing of an in-state gas line.

“We’ll see what Dan lays on the table in terms of financing, permitting and potential,” Chenault said in a prepared statement. “We’ve all been waiting for a path forward on delivering our gas to Alaskans, and we’ll see (on July 5) how and if it’s feasible.”

The state fiscal year begins July 1.

—Steve Quinn