Permanent Fund trustees seek natural gas investment advice

Trustees of the Alaska Permanent Fund will seek the advice of a Virginia consulting firm to determine whether the oil-wealth savings account should invest in a possible natural gas pipeline from the North Slope.

The Fairfax, Va., company, PACE Global Energy Services, will advise trustees on pipeline investments in general and more specifically on whether Gov. Frank Murkowski’s proposal for Alaska to own as much as 20 percent of a gas line makes sense for the $34 billion fund.

“We’re educating ourselves. That’s what this is all about,” Bill Hudson, a trustee and former Republican state lawmaker from Juneau, said after a meeting April 13 in Anchorage.

The cost of constructing a gas line is estimated at $20 billion to $30 billion. The state’s share would be $4 billion to $6 billion. Hudson said the Permanent Fund has never invested in infrastructure projects, especially ones yet to be built. So trustees decided to follow the advice of state Revenue Commissioner William A. Corbus, who also is a trustee, and hire experts.

“If the state goes forward with a percentage interest in the pipeline, the state may or may not request the assistance of the Permanent Fund in the financing. And we want to understand very clearly what we would be involved with before doing it,” said Carl Brady, chairman of the board of trustees. Neither Corbus nor state Attorney General David W. Marquez attended the April 13 meeting.

Both are members of Murkowski’s team negotiating a contract with oil companies on the North Slope over taxes, royalties and other terms for a possible gas line.

Corbus and Marquez abstained from the meeting to avoid any appearance of trying to influence the trustees one way or the other, said Mike Burns, Permanent Fund chief executive.

How PACE will be paid depends on hours billed, but $550,000 is budgeted, said Burns.

—The Associated Press