Gov. Knowles eases way for Alaska gas pipeline

Through an administrative order, Alaska Gov. Tony Knowles Monday created a �pipeline cabinet� and coordination office to centralize permitting and oversight procedures among state agencies for construction of a pipeline to move Alaskan natural gas to markets in the Lower 48 US states.

Jan 9th, 2001


Through an administrative order, Alaska Gov. Tony Knowles Monday created a �pipeline cabinet� and coordination office to centralize permitting and oversight procedures among state agencies for construction of a pipeline to move Alaskan natural gas to markets in the Lower 48 US states.

At the opening of Alaska�s legislature, Knowles also introduced an amendment to include both gas pipeline and gas-to-liquids (GTL) proposals in the state�s 1998 Stranded Gas Development Act, which originally targeted only a possible liquefied natural gas (LNG) project.

Knowles also is seeking a $4 million appropriation to jump start construction of a pipeline that would follow the Alaska Highway from Prudhoe Bay into Canada�s Alberta province, where it would connect with existing pipeline infrastructure to move gas into Midwest US markets. That money would help fund initial work on permits and rights-of-way.

The administrative order �establishes a fully integrated state organization that utilizes existing government structure and processes to the maximum extent possible, minimizes impacts to existing agency functions, and promotes internal alignment of state agencies,� the governor said.

The objective is a streamlined, one-stop state permitting facility that will be in place if a company decides to build a pipeline to move Alaskan gas to markets in the contiguous US.

�Alaska�s natural gas can be the foundation of a 21st century economy of high-tech resource development, high-tech manufacturing, and new business growth and quality of life based on affordable clean energy. With known and estimated (Alaskan) reserves of up to 100 tcf, natural gas can fuel our economy for the next 50 to 70 years, but to start this mammoth project, we need a single point of contact,� said Knowles.

Commissioners from each state agency involved in development of a gas pipeline are to serve on the new natural gas policy cabinet. That includes the Departments of Natural Resources, Environmental Conservation, Fish and Game, Revenue, Transportation and Public Facilities, Labor and Workforce Development, and Community and Economic Development. Directors of the Division of Governmental Coordination and of the governor�s office in Washington, DC, also would serve, along with the attorney general.

Liaison officers from each agency involved in pipeline permitting and authorization also would be appointed to the pipeline coordinator�s office to assist in processing and in the oversight of the proposed project.

The order is for administrative purposes only and does not modify the statutory and regulatory authorities of the designated agencies, said state officials.

The official pipeline coordinator will submit periodic progress reports to the governor and members of his gas pipeline cabinet, summarizing goals, objectives, and accomplishments in building the proposed pipeline.

Proven recoverable natural gas reserves on Alaska�s North Slope total more than 35 tcf, and potential reserves may be 10 times that, officials said. With natural gas prices projected to average $5/Mcf or better this year, industry sources say the economics for bringing Alaska�s stranded gas to market never looked better (OGJ Online, Sep. 15, 2000).

BP, a major producer of Alaskan oil, is looking at a number of pipeline options to move Alaskan gas to market. At a conference late last year, BP officials said an optimistic timeline for such a project would include a regulatory filing in the second half of this year, followed by 6-7 years of regulatory process and construction with Alaskan gas finally reaching markets by 2010 (OGJ Online, Oct. 18, 2000).

Other industry sources estimate it would take about a year to order materials for the proposed pipeline and 3 years to build it.

Knowles favors building the pipeline along a route that parallels the Trans-Alaska oil pipeline and the Alaska Highway. �My way is the highway,� he said.

The 1,800-mile line would be the largest private project in US history.

A shorter competing route from Prudhoe Bay across the Beaufort Sea and down the Mackenzie River Delta to Alberta also has been suggested. But that route poses formidable technical, environmental and logistical challenges, including �under-ocean (arctic) pipelines at untested pressure over never-achieved length of 400 miles,� Knowles said (OGJ, Nov. 27, 2000, p. 31).

On the other hand, the 1976 federal act for the Trans-Alaska oil pipeline cleared much of the permitting, international agreements, and environmental considerations for a similar natural gas pipeline along the Alaska Highway, he said.

Industry officials claim there�s enough recoverable gas on Alaska�s North Slope to support multiple projects, including a GTL facility and a pipeline, if market conditions remain strong.

Building the massive pipeline would generate billions of dollars for the Alaskan economy, provide access to more gas for use in that state, and create spin-off industries involving the use of gas liquids, say state officials.

Knowles has pledged to spend the rest of his office term pushing to launch construction of a natural gas pipeline. He is on record in support of lowering state tax barriers to encourage such a project.

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