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Federal action key to gas policy council recommendations Gas pipeline should be built with private financing, say recommendations; new or supplemental EIS required; council members worried about federal influence if Natural Gas Act rather than Alaska Natura Kristen Nelson PNA Editor-in-Chief
The Governor's Alaska Highway Natural Gas Policy Council has spent eight months and hundreds of hours developing recommendations to promote an Alaska Highway natural gas pipeline to the Lower 48 that also creates a natural gas business in Alaska.
The policy council unanimously adopted the recommendations of its committees Oct. 31, recommendations which will be finalized for the governor by the end of November. But much of what the council recommends depends on federal action.
The council concluded that federal law needs to be changed to modernize the Alaska Natural Gas Transportation Act: the state is at the mercy of Congress for those changes.
The Alaska Highway route, selected by the president and ratified by Congress in 1977, is based on ANGTA. If the Federal Energy Regulatory Commission receives a pipeline application based on the Natural Gas Act, routing and in-state access to gas specified in ANGTA do not apply.
And even if an Alaska Highway project based on ANGTA moves forward, the council said that a new environmental impact statement — or a substantial revision of the 25-year old EIS done for the Alaska Highway route — needs to be done. Another federal action.
Reports adopted unanimously The gas policy council, reviewed and approved — with some amendments — recommendations from its five committees at its Oct. 31 meeting.
The Alaska hire-buy-build committee recommended Alaska hire language similar to that used in the BP-ARCO merger “charter commitment”, including a quarterly report to the Department of Labor. The committee noted that the record in Alaska on local hire litigation is not encouraging. “We believe it will be difficult to construct local hire legislation that will withstand challenges under the U.S. and Alaska Constitutions…” But the biggest problem, said committee chair Mike Navarre, is that the size and scope of the project is large enough that an already taxed work force will be further taxed.
The environmental considerations committee recommendations, presented by Brian Davies for committee chair Peg Tileston, included a recommendation for study of “lessons learned” from the design, construction and operation of the trans-Alaska oil pipeline and a “rigorous environmental review” — either a supplemental EIS building on the EISs done for ANGTS or a full EIS using information from the original work.
Anchorage Mayor George Wuerch objected, saying that two very comprehensive studies were done in the 1970s. Davies said the committee had discussed this at length, and concluded it was very hard to make the case credibly to just use a 25-year old EIS.
State ownership not recommended The state pipeline ownership and tax structure committee concluded the pipeline is economically feasible for certain investors and recommended that it be undertaken with private financing, said committee chair Bill Corbus. The committee is also recommending that while state tax policy could play a role in pipeline development, but believes it is premature to decide how to use that tool until the project and its ownership are more defined.
Corbus said the committee believes the private sector can build a gas pipeline without state help. If the producers don't built it, he said, the state should look at other options.
The federal-international action committee recommended modernizing the Alaska Natural Gas Transportation Act. Committee chair Charlie Cole noted that the policy council voted agreement to 10 policy goals for federal legislation at its Sept. 25 meeting.
In-state use, access The access for in-state gas use and future opportunities committee, chaired by Ken Thompson, submitted 17 pages of recommendations and conclusions, covering a range of issues from in-state gas access to royalty in kind to netback pricing valuation.
The committee recommended that the state establish a natural gas group within the Department of Natural Resources, and Thompson told the council that the state would benefit from expert advice on a whole range of natural gas issues, starting with the open season for a gas pipeline.
The committee also recommended a joint state-federal board at the FERC to advise that commission on tariff and access issues for the Alaska portion of a gas pipeline.
Federal legislation concerns Council member Jack Roderick said that three of the committees made recommendations which required joint state-federal agreement, with changes in law such as a joint state-federal board to make recommendations for the Alaska portion of the line to the Federal Energy Regulatory Commission.
“My guess,” he said, “is that it will be hard to get through Congress.” He suggested that the attorneys check on the state's options if FERC receives an application in January under the Natural Gas Act.
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