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Legislators consider Lower 48 gas exports

Canadian agency ready to help make 1,700-mile line a reality

Posted: March 26, 2012 - 11:14pm
Chrystia Chudczak, assistant commissioner for the Northern Pipeline Agency of Canada, speaks during a lunch-and-learn session at the Capitol on Monday on how Canada is preparing for the 1,700-mile pipeline to transport North Slope gas to markets in the Lower 48. Sen. Joe Paskvan, D-Fairbanks, is in the background. The speech was hosted by the Senate and House Resource committees.  Michael Penn/Juneau Empire
Michael Penn/Juneau Empire
Chrystia Chudczak, assistant commissioner for the Northern Pipeline Agency of Canada, speaks during a lunch-and-learn session at the Capitol on Monday on how Canada is preparing for the 1,700-mile pipeline to transport North Slope gas to markets in the Lower 48. Sen. Joe Paskvan, D-Fairbanks, is in the background. The speech was hosted by the Senate and House Resource committees.

With Alaska’s gas export plans now looking equally at a pipeline to Valdez that would export liquefied natural gas to Asia as they are to the state’s first choice, across Canada to the Lower 48, two Canadian officials told the Legislature on Monday they remain ready to assist with the Canada option.

“The government of Canada is ready to proceed in expediting this project in its planning and construction phase,” said Chrystia Chudczak, assistant commissioner at Canada’s federal Northern Pipeline Agency.

That agency intended to help maximize benefits of a pipeline to Canadians.

The Canadians said just as Interior Alaskans want to get access to natural gas to lower costs and promote development, so do residents of Canada’s Yukon Territory. Its capital of Whitehorse and new mining operations would all like access to the cheaper, clean-burning fuel.

In 2007, there was a competition to build a Lower 48 line, with two competing efforts underway. The Alaska Gasline Inducement Act , or AGIA, sponsored an effort by TransCanada Corp., later joined by Exxon Mobil Co. to advance a Lower 48 or Valdez LNG project.

At the same time, BP and ConocoPhillips Co. began working together to build their own line to the Lower 48.

Both ventures were looking at a 48-inch diameter, 1,700-mile line to the Alberta natural gas hub expected to cost between $32 and $41 billion dollars.

The BP-ConocoPhillips line did not include an LNG option and was abandoned following the boom in shale gas production in Canada and the Lower 48 drove down the project’s economic value.

At the same time, House Speaker Mike Chenault, R-Nikiski, is proposing a small-diameter line to from the North Slope to Southcentral.

Now, Gov. Sean Parnell is urging all parties to join together in a common project to bring LNG to “tidewater,” presumably Valdez. He said he’d like that to happen by the end of the current month.

Canada’s Northern Pipeline Agency is “ready, engaged and leading,” development of a line across the country with many key approvals and tribal agreements in place, the Canadians said.

Canada’s counsel in Alaska, Peter Taylor, said they were ready to help, but not encouraging a specific project.

“We are very much aware of the governor’s interest in alignment and the discussions that are going on in the Senate and House as to just exactly this would be done but those are your decisions not our decisions,” he said.

Chudczak said while there are many who want to see the project go forward, it isn’t the government that will make it happen.

“This project will go ahead if it is economically viable, if the markets want it,” she said.

Taylor also addressed questions from Sen. Bill Wielechowski, D-Anchorage, about whether Alaska’s natural gas would benefit Canada or the Lower 48.

“Do you need Alaska’s gas?” he asked.

Canada already produces surplus natural gas that goes to the United States, and that’s where any new gas would go as well, he said.

“Canada is exporting loads of gas into the United States right now,” he said.

That’s where the market is and that’s where any additional gas would go as well, he said.

“It’s not for Canadian consumption, it’s for U.S. consumption,” Taylor said.

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

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