Senate panel sets Alaska gas pipeline hearing, puts energy bill on hold

The Senate Committee on Energy and Natural Resources Thursday scheduled a hearing Oct. 2 on pending proposals to ship natural gas from Alaska to the Lower 48 states. Other energy legislation is still on hold as Congress focuses on pressing national security issues related to the Sept. 11 terrorist attacks in the US.

Sept. 21, 2001

2 min read

By the OGJ Online Staff

WASHINGTON, DC, Sept. 21 -- The Senate Committee on Energy and Natural Resources Thursday scheduled a hearing Oct. 2 on pending proposals to build a pipeline to move natural gas from Alaska to the Lower 48 states.

Interested stakeholders will be asked to discuss what role the federal government should play in expediting the pipeline.

Alaska Gov. Tony Knowles (D) says the federal government needs to mandate the Alaska Highway route and offer tax incentives to help the project's economics (OGJ Online, Aug. 31, 2001). If built, the project could cost $20 billion and be one of the largest construction projects in American history.

Oil companies have resisted committing support for the project, saying it is too expensive. The project is even less attractive now that the short-term outlook for natural gas prices has softened because of slumping demand and higher inventory levels.

Further complicating the issue are the views of the Canadian government. It does not want the US to subsidize a route following the Trans-Alaska Pipeline System to Fairbanks and then the Alaska Highway to Canada. Some Canadian officials prefer an "over-the-top" route through the Beaufort Sea and down through the Mackenzie Valley because it could also collect gas from sizeable, undeveloped Mackenzie Delta fields.

Meanwhile, comprehensive energy legislation is still on hold. The House of Representatives has passed a measure but the Senate energy panel has yet to mark up its bill, which includes many of the energy policy proposals in the White House blueprint released this spring.

Congressional staff and lobbyists say chances that a large energy bill will pass this session are very small. Instead, some energy issues might be addressed in the context of budget bills provided they are related to national security.

Lawmakers have signaled to industry lobbyists they do not, for the time being, want to address highly controversial issues like expanded public land leasing and tighter fuel efficiency standards. Capitol Hill instead is expected to focus on working with the White House on a strategy to prevent terrorist attacks against the US and its allies.