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Knowles signs bill to encourage gasline project Tariff on gasline would be determine under state utilities act; gasline would be common carrier only with respect to intrastate transportation Petroleum News Alaska
Gov. Tony Knowles signed House Bill 290 May 12, calling the bill the state’s latest action to boost the feasibility of a pipeline to market North Slope natural gas, creating jobs and generating revenues in the process.
HB 290, the stranded gas pipeline carriers bill, was sponsored by the House Resources Committee and passed both House and Senate without opposition.
“Trillions of cubic feet of natural gas are available on the North Slope, but it requires the state’s help to get it to market,” Knowles said. “This bill is another step in that direction, making technical changes in state law to create a more certain playing field that is needed to encourage gasline development.”
The bill modifies the Alaska Right-of-Way Leasing Act, Alaska Pipeline Act, and Alaska Public Utilities Regulatory Act to clarify that, except in terms of rate-making, a North Slope natural gas pipeline is subject only to the Alaska Pipeline Act and not the Alaska Public Utilities Regulatory Act.
Pipeline tariff under utilities act For rate-making purposes, the pipeline will be subject to the Utilities Regulatory Act, which requires that a North Slope gas pipeline be a common carrier only with respect to intrastate shipments, but not subject to the common carrier requirement for exports.
Common carrier requirement means if the pipeline has insufficient capacity to accept all gas tendered, it must pro-rate the gas, accepting for shipment an equal percentage of the tendered gas from each shipper.
The pipeline is not likely to be built unless marketers can commit to ship large fixed volumes of gas to foreign markets for a lengthy period of time. A common carrier requirement could interfere with such export commitments.
The bill preserves the authority of the Department of Natural Resources to oversee the pipeline and related facilities and extends the jurisdiction of the Regulatory Commission of Alaska to the intrastate transportation of natural gas.
The legislation is the state’s latest effort to encourage the commercialization of the estimated 35 trillion cubic feet of natural gas on the North Slope. Shortly after taking office in 1994, Knowles charged his resource cabinet to examine ways to commercialize Alaska’s natural gas and brought in outside experts to assist in the effort.
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