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Knowles unveils final gas policy council report at RDC conference
Steve Sutherlin PNA Managing Editor
Gov. Tony Knowles released the final report of his Alaska Highway Natural Gas Policy Council at the annual conference of the Resource Development Council Nov. 30 in Anchorage. The 28-member council was tasked with examining how the state can promote a North Slope gas commercialization project that maximizes benefits to Alaska.
“I’m a paid optimist, so I believe the opportunity to commercialize Alaska’s North Slope gas is still very much before us,” Knowles told the conference, adding that the North Slope producers have projected return on investment from the line of about 10 percent to 13 percent, just shy of a stated 15 percent target. The governor said he has asked Congress to bridge the gap with federal incentives for private investment in the Alaska Highway route.
The report concluded that promotion of the gas pipeline is an important role for state government, but direct state investment in the pipeline was not recommended because a concentration of investment goes against the state policy of investment diversification. The council said that information about the line that might be afforded the state through direct investment could be obtained by other means.
Communities add input A series of gas policy council meetings held in communities around the state produced a list of benefits and concerns related to the gas pipeline.
The report said the Cook Inlet region would gain certainty of a long-term gas supply if gas were shipped to Southcentral Alaska.
Fairbanks residents, the council said, want gas for residential and commercial use, as well as the economic boost pipeline construction would bring to the region.
In Barrow, testimony was overwhelmingly opposed to a competing gas line proposal offshore in the Beaufort Sea to hook up with a gasline in the Mackenzie Delta because of environmental concerns.
Residents of Tok wanted jobs and more affordable energy but expressed concern about preserving the rural character of the area, the report said.
Among the report’s 61 recommendations, the council said the state should take its royalty gas in-kind because sales of royalty gas to companies other than producers will foster competition and produce a higher return for the state.
The report said the state must have a role in the review and approval of tariffs and other charges affecting transportation of gas from the North Slope to Alaska communities.
The council said state and federal agencies must be adequately funded to speed and assist in the permitting process and to perform the necessary oversight of pipeline construction and operation.
The report concluded that several gas hubs should be designed into the project to facilitate tapping the line for in-state gas use.
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