Bill outlawing northern gas pipeline route was fueled by good intentions, but its poor timing could have adverse affects

Dave Harbour, Special to PNA

Alaska Senate Bill 164 recently passed the Senate and could face House approval and the Governor’s signature any day. It is an act that could make construction of a northern gas pipeline route illegal.

In late March and early April it moved rapidly through Senate committees and passed with little controversy. The house has given it a VIP reception, as well.

While most of us favor maximum Alaska content, along the lines Gov. Knowles has suggested, this legislative action, its momentum fueled by passions of well-intended constituents, could have unintended results. It is an example of how the good intent of government, poorly timed and executed, could result in an negative outcome should the House pass SB 164 and the governor sign it.

For example, if the Alaska Highway route proves uneconomic in this time frame, the state would be stuck; Alaska’s fiscal ‘soft landing’ might turn into a ‘hard’ one. It would then regret having stopped engineering, environmental and economic studies for an alternative pipeline.

Second, potentially making offshore ANWR an illegal route plays into the hands of anti-ANWR political strategists.

Third, making study of the northern path impractical reduces industry’s leverage in pre-negotiating terms with Canadian provincial governments, aboriginal groups, and contractors. Reduced negotiating leverage could mean higher project costs and a lower return to the gas owners, including the state.

Fourth, one could conclude that if SB 164 is passed into law, some Alaska contractors now assisting industry with feasibility studies could have their work diminished, though producers say this may not be likely.

Fifth, when Alaska law acts to preclude free market decisions, will Canadians be tempted to respond in kind?

The only positive thing this legislation does is license well intended political leaders to tell constituents: “We intended well.”

Even proponents of the highway route, presumed beneficiaries of this action, have said it’s unnecessary.

Legislators and the administration would be better advised to confer with gas line planners cooperatively. The attitude should be “what can we do to help?”, not “here’s what we will do to help.”

Perhaps cooperation and unbiased objectivity should be offered to industry researchers and Canada, rather than roadblocks. A negative attitude can cost an employee her job, a contractor his client or a state a critical project at a critical time.