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Governor calls for federal legislation to make highway gasline economic Knowles sends 10 proposals to Senate Energy Committee in Sept. 10 letter, says Alaska Highway route not jingoistic but realistic Kristen Nelson PNA Editor-in-Chief
Gov. Tony Knowles told the Resource Development Council Aug. 30 that Alaskans need to make a consolidated presentation to Congress for National Interest Gasline Legislation.
He told the Anchorage Chamber of Commerce Sept. 10 that he has put 10 proposals into a letter to the U.S. Senate Energy Committee.
This Alaska initiative, Knowles said, will make the Alaska Highway natural gas project economic and in the interest of Alaska and the nation.
The Sept. 10 letter, to Senate Energy Committee Chairman Senator Jeff Bingaman of New Mexico and Senator Frank Murkowski of Alaska, the ranking minority member of the Senate Energy Committee, listed economic benefits for Alaska and for the nation — from jobs to an increased supply of natural gas — and detailed the proposals that Knowles believes should be part of federal gasline legislation.
Highway needs to be mandated Knowles said the Alaska Highway route needs to be mandated in federal legislation. He said that much of the route is already permitted, is the subject of an international treaty between the United States and Canada, is the only route that could be built in a timely fashion and provides the most benefits for Alaskans.
Knowles told the Anchorage Chamber of Commerce that he was “amazed to hear reports that our national administration says it is ‘route neutral.’ Mandating an Alaska Highway route is not some jingoistic appeal — it’s just based on facts. The over-the-top route isn’t going to happen. It’s the responsibility, I believe, of producers, the federal government and Alaskans to do everything they can to make the Alaska Highway route commercially viable.”
The over-the-top or northern route is one of the alternatives being studied by the North Slope producers group. The over-the-top route would go offshore from Prudhoe Bay, then east under the Beaufort Sea to the Mackenzie Delta and south through Canada. A route along the trans-Alaska oil pipeline to the Fairbanks area and then into Canada along the Alaska Highway, much of which was permitted in the 1970s, would make natural gas available for use in Alaska along the pipeline right of way.
The first of the governor’s proposals to the Senate Energy Committee is to mandate the Alaska Highway route.
“Any legislation,” the governor said, “should reiterate that the Alaska Highway route — the route approved by the President and Congress in 1977 — remains the chosen route. That route can be completed quickly,” the governor said, “and, given the existing infrastructure, can be done with minimal additional impact on the environment.”
Expedited approval requested The governor has also asked that any federal legislation “include an expedited approval process for the Alaska portion of the Alaska Highway pipeline corridor that parallels and builds on the process set forth in the 1976 Alaska Natural Gas Transportation System legislation.”
Tax benefits should be included “to ensure that this project, which is so important to national interest, is actually built.” The governor asked for accelerated depreciation and investment tax credits on the pipeline assets, and a provision to “reduce financial risk resulting from widely fluctuating gas prices” such as a tax or royalty credit when prices fall below a specified floor.
U.S. and Canadian steel should be given preference and there should be a project labor agreement.
Future natural gas discoveries should have mandated access to the pipeline. The governor said that estimated undiscovered gas reserves may be on the order of 100 trillion cubic feet or more and asked that legislation “give the Federal Energy Regulatory Commission clear authority to require the owners of the Alaska portion of the Alaska Highway project to expand the capacity of the pipeline in order to accommodate all new discoveries.”
Without such a provision, the governor said, “new gas discoveries could be left at the back of a long queue of gas awaiting shipment or, words, indefinitely stranded in place because, unlike in most areas of the Lower 48 states, one pipeline will be the sole source of available transportation.”
The legislation should also encourage equity participation by “all interested and financially viable energy companies, including North Slope producers and gas pipeline companies.”
Alaska and Alaska Native hire should be encouraged by requiring that the companies constructing the Alaska portion have programs to train and employ Alaskans to the extent permitted by law, with special emphasis on recruitment, training and employment of Alaska Natives.
The legislation should also encourage use of Alaska businesses to the extent permitted by law.
The governor’s last proposal is that legislation ensure that owners of the Alaska portion of the pipeline make provision for instate access to the gas.
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