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Commonwealth North report warns against undermining gasline viability Says state should fully participate in ANS gas commercialization decisions, but should not damage commerciality of less favored routes or projects Kristen Nelson PNA Editor-in-Chief
A Commonwealth North study of policy principles for developing Alaska North Slope gas has left unresolved some major issues: the route, state of Alaska equity participation, regulatory streamlining and specifics of a Y-line or hub arrangement.
The report, released Sept. 25, recommends that the state “work to optimize its interests” in the commercialization of North Slope gas “without undermining the commercial viability of less preferred routes or projects.” It also recommends that the state ensure it is a full participant in the decision-making processes associated with gas commercialization. A proposal that the state establish a public resource management corporation to handle its natural resources is one which study co-chair Dick Barnes said the Commonwealth North board has been advocating for a number of years.
Interested parties in study group Duane Heyman, Commonwealth North executive director, said the study group of 58 met 25 times beginning last December to “find policy principles to answer the question: how can the best interests of the people of Alaska be realized in the commercialization of North Slope gas?”
Heyman said the group included people with an interest in the outcome, but affiliations were well known or identified relative to specific points being advocated.
“I think we did a good job of checking special interests at the door or identifying them as they were relevant,” he said. The group “looked at all the major potential delivery systems including the Highway or Alcan route following the Taps line, with spurs, Y-lines or hub concepts, the over-the top route, liquefied natural gas — LNG, and we also looked at tax-exempt financing, for example the Alaska Gasline Port Authority.”
Heyman said it was easy to identify Alaska’s goals for the project: “high income to the state treasury, economic benefits from construction activity, many long-term project maintenance jobs, in-state access to Alaska North Slope gas for homes, businesses, electric utilities and industrial plants, and in-state ownership and control of the project.”
But there are, he said, “unavoidable real-world constraints. … Market economics are primary.” A project must be economically viable, Heyman said.
Study-co chair Lee Gorsuch said industry feels the project “is technically doable. The big issue, really, has to do with economics. … One of the big challenges we have is that the solutions have to be acceptable to the major stakeholders — and there are a lot of stakeholders. And unfortunately the reality is, the stakeholders can stop the project, but they can’t make it go.”
The study group felt it did not have enough information to address specific routes, or state of Alaska equity participation, regulatory streamlining or hub or Y-line proposals. Barnes said this an interim report with much more information to be developed in a number of areas.
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