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Sponsor of gasline initiative says governor shortchanging effort; Alliance disagrees
Petroleum News Anchorage staff
The main sponsor of the All-Alaska Gasline initiative says the $150,000 Alaska Gov. Frank Murkowski has decided put into the newly formed state-owned authority is $1.85 million short of what is needed. The head of the largest oil and gas industry association in the state disagrees, contending that $150,000 is “overly generous.” Heyworth: No to blind acceptance Scott Heyworth, an Anchorage longshoreman and architect of the ballot initiative 62 percent of the voters approved in November, says a natural gas pipeline from the North Slope to Valdez and a plant to produce liquefied natural gas offer greater economic benefits to the state than a gas pipeline to Lower 48 markets.
The authority will answer two questions, he said: Is an LNG project economic for Alaska and do we have buyers for it?
Heyworth does not want to “take the word” of North Slope producers, who say an LNG project is not economic but who have competitive LNG projects outside of Alaska.
Two million dollars, he says, is needed negotiate a wellhead purchase price with the North Slope gas producers, travel to California and Asia to meet with potential buyers to secure long-term contracts and negotiate with Yukon Pacific Corp. for the permits it holds for an LNG project.
“That is why we need $2 million. … You can't do anything with $150,000,” he says. Houle: authority concept “flawed” Larry Houle, general manager of the Alaska Support Industry Alliance, disagrees. In his opinion, “$150k in Monopoly Money would be overly generous.”
The concept of a state-owned gas pipeline authority “has been flawed from the beginning,” Houle says. “State participation does nothing to eliminate or lessen construction and market risks. People talk a lot about running government like a business, the truth is government is not a business. The state is governed by regulations for open meetings, public procurement codes and public access laws. In short, our public process does not allow for speed and decisiveness, elements essential to running a multi-billion dollar gasline project.”
Project and market risks belong in the private sector, Houle contends, pointing to the recent passage of House Bill 16, the reauthorization of Alaska's Stranded Gas Development Act, which he says is the appropriate way for government to promote the commercialization of North Slope gas.
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