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Heyworth, Houle argue merits of All-Alaska Gasline Initiative Proposition on November ballot would create Alaska Natural Gas Development Authority to study proposal for state to acquire North Slope gas, build pipeline to Valdez Jen Ransom PNA Staff Writer
With only a little more than a month to go until Alaskans go to the polls, the temperature is rising in discussions about Ballot Measure No. 3, the All-Alaska Gasline Initiative.
Scott Heyworth, the primary sponsor of the initiative, debated the proposition with Larry Houle of the Alaska Support Industry Alliance at the Anchorage Chamber of Commerce Make Sept. 23. Dave Harbour of Northern Gas Pipelines was the moderator.
The All-Alaska Gasline Initiative would create the Alaska Natural Gas Development Authority, which would be a public corporation of the state, explained Harbour, who told the chamber audience he hadn’t yet made up his mind on the proposition. The authority would acquire and condition North Slope gas, construct a gas pipeline to Valdez alongside the trans-Alaska oil pipeline and a spur line from Glennallen to the Southcentral gas distribution grid, be responsible for operating and maintaining the pipeline, shipping the gas and marketing the gas. Suggested sources of income to do the gasline project include railroad bonds, appropriations from the Alaska legislature and/or funding from the oil and gas industry companies.
In support of Ballot Measure No. 3 Heyworth, a lifelong Alaska resident and a longshoreman for the last 32 years, is the primary sponsor of the All-Alaska Gas line Initiative. He says the initiative offers no incentives, no loan guarantees and no handouts. While figures for the first year’s cost have been estimated as high as $250 million, Heyworth says that only $3 million to $5 million would be spent during the first two to five years. He says railroad bonds would be used to pay for the project, and that the authority would stand alone and not receive support from the permanent fund or the state revenue fund.
Markets for gas would have to be confirmed before the pipeline could be built, he said.
Heyworth’s big push is that Alaska would not attempt to sell the gas outright. Instead, Alaska could mimic the petrochemical success of Alberta and invest in producing products from the now-stranded gas.
“Everybody gets jobs out of the petrochemical plant,” said Heyworth. “One hundred and ninety-one products now come out of Alberta, why can’t we do the same?”
Heyworth says that other pluses include filling up southbound supply ships with Alaska products, which he says would actually bring down the cost of goods in Alaska, since we are now paying for both trips because the supply ships are normally empty when returning to from Alaska. Heyworth also mentioned the environmental impact of building the gas line alongside the trans-Alaska oil pipeline: the infrastructure is already in place, he said, meaning very few roads would have to be built to construct the gasline.
The opposition Larry Houle, of the Alaska Support Industry Alliance, opposes Ballot Measure No. 3. Houle, who says that he wants a gas pipeline just as much as the next Alaska resident, says that he opposes the measure because the state cannot finance the pipeline. Houle even went as far as to say that he sees the initiative as the biggest obstacle in getting a pipeline to transport the North Slope gas.
“This is a non-economical project,” said Houle. “The state of Alaska cannot afford it.”
Nor should it pay for it, according to Houle. The industry has looked at building a gas pipeline to Valdez for export of gas as liquefied natural gas and found it too risky, too expensive. Houle says the state should not take that commercial risk — that’s up to the private sector.
Houle says that energy companies have already spent over $20 million to determine the All-Alaska gas pipeline is not economical; Alaska gas is just not marketable as LNG to Japan and Korea, because the cost of getting it out is so high and there is already plenty of gas available in the Pacific Rim.
Houle is also worried about how the state would fund such a large project. He says that the Authority may attempt to take the money out of the general fund, which houses the permanent fund earnings. And in response to Heyworth’s talk of industry financing the project, Houle said that first, the industry has already found the project non-economical, and second, no industry would finance a project 100 percent. Even if Alaska got 70 percent of the funds needed, where would the other 30 percent come from, Houle asked?
After both sides made their arguments, Harbor concluded the debate by telling the chamber audience:
“You have the burden of proof. You have to do your homework, you have to figure out the facts before you cast your vote.”
Election day is Nov. 5. Information on Ballot Measure No. 3 is available at www.gov.state.ak.us/ltgov/elections/petitions/status.htm#01gsln.
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