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Pushback over in-state gas pipeline

Multi-billion dollar ASAP pipeline would bring more gas to Cook Inlet area

Posted: March 13, 2012 - 11:05pm  |  Updated: March 14, 2012 - 5:46am
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In-State Gasline Caucus Co-Chairman Rep. Mark Neuman, R-Mat-Su, left, questions House Bill 9 co-sponsor Speaker of the House Rep. Mike Chenault, R-Nikiski, as Sen. Charlie Huggins, R-Wasilla, listens, on their plan for an in-state natural gas pipeline at the Capitol on Tuesday.  Michael Penn/Juneau Empire
Michael Penn/Juneau Empire
In-State Gasline Caucus Co-Chairman Rep. Mark Neuman, R-Mat-Su, left, questions House Bill 9 co-sponsor Speaker of the House Rep. Mike Chenault, R-Nikiski, as Sen. Charlie Huggins, R-Wasilla, listens, on their plan for an in-state natural gas pipeline at the Capitol on Tuesday.

A small-diameter in-state natural gas pipeline got a push Tuesday from a top House leader, but got some pushback from skeptics as well.

House Speaker Mike Chenault, R-Nikiski, and Rep. Mike Hawker, R-Anchorage, pushed through a bill two years ago starting early work on a plan to build a 737-mile, 24-inch pipeline from the North Slope to Southcentral and provide a guaranteed supply of energy to the state’s biggest metro area.

Chenault attacked critics of his plan and warned that without the pipeline he was backing the Anchorage area’s natural gas system could collapse, especially on cold days.

That could leave the entire Anchorage area, the upper Kenai Peninsula, Wasilla and the Matanuska and Susitna valleys without power.

“I don’t think we can afford to allow that to happen for any reason,” he said.

The Alaska Gasline Development Corp., a subsidiary of the state’s Alaska Housing Finance Corp., has been working to develop a pipeline they call the “Alaska Stand Alone Pipeline, or ASAP.

Chenault said he was “frustrated” with some of the critics of the plan, who have questioned its route, cost to the state, cost to consumers, and other attributes of the multi-billion-dollar plan.

“Maybe it’s not the right color,” Chenault quipped at a meeting of in-state gasline supporters Tuesday evening.

Chenault said a state gasline was insurance against Southcentral running out of natural gas, but some critics said the pipeline could actually cause that to happen.

New drilling and gas discoveries in Cook Inlet have led to what Gov. Sean Parnell called a “renaissance” of the state’s oldest oil and gas field, but Sen. Joe Paskvan, D-Fairbanks, warned that a state-subsidized line bringing twice the volume of gas to Anchorage that the city uses would depress prices, and exploration.

“It’s important that we not destroy the incentive to explore Cook Inlet,” he said.

It would likely be cheaper to bring Cook Inlet gas to Fairbanks than from the North Slope with a small diameter pipeline, he said.

And Rep. Scott Kawaski, D-Fairbanks, didn’t like the pipeline’s route.

“The AGDC line misses Fairbanks by 37 miles,” he said. The additional cost to ship that gas east to Fairbanks and its military bases will increase the city’s costs.

“We have to have an in-state gasline that actually works,” he said.

What the state really needs, said Rep. Les Gara, D-Anchorage, was a high-volume export gasline that would bring much cheaper gas to residents and revenue to the state at the same time.

“A big export line, either to Asia or the Lower 48, provides substantial revenue to Alaska,” he said.

Locking in the high prices of a small line for decades won’t benefit anyone,” he said.

“The worst thing we can do is build a gasline that produces the most expensive gas, and then build a big line that goes right by them” that they can’t access,” Gara said.

The state is working to develop a big gasline under the Alaska Gasline Inducement Act that would bring Alaskan gas to export markets. It has options to go the Lower 48, or to a LNG export terminal, an option that Parnell said he now favors.

Hawker dismissed those concerns, and said the state needed to get moving on ASAP.

“The Alaska public is tired of us screwing around, the Alaska public wants an Alaskan gasline,” he said.

He said he doubted the ability of the big AGIA line to succeed.

“It would seem to me that the economic viability of that project in the face of the development of shale gas is somewhat compromised at this time,” he said.

AHFC Executive Director Dan Fauske, heading up the gasline efforts, said many of the criticisms he’d read of the ASAP plan in the newspaper were simply not true.

“Some of that stuff, I just get furious when I read,” he said.

Fauske voiced a version of the “If we build it, they will come” argument.

Suppliers and business and industrial consumes will come forward when they see “crazy Alaskans welding pipe together” and will want to make sure they’ve got a part of it, he said.

• Contact reporter Pat Forgey at 523-2250 or Patrick.forgey@juneauempire.com

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