Federal official to lawmakers: Relax on pipeline

Gov. Parnell committed to project, others remain skeptical

Posted: Friday, January 21, 2011

JUNEAU — A federal official has advice for Alaska lawmakers antsy about securing a gas pipeline: Relax.

Larry Persily, the federal coordinator for Alaska natural gas transportation projects, told The Associated Press Wednesday that there’s no reason to panic yet. One of the two projects vying to secure shipping agreements, Alberta, Canada-based TransCanada Corp., missed a self-imposed target for doing so at the end of last year. But Persily said that’s not a reason to lose faith.

He said that if there aren’t so-called precedent agreement by year’s end, then he’d worry.

Persily, who’s been meeting with lawmakers this week as a new legislative session gets under way, said the sense he’s getting from many of them is that they’re hopeful a line will get built, but skeptical.

As part of the Alaska Gasline Inducement Act, or AGIA, championed by former Gov. Sarah Palin, the state has an exclusive license with TransCanada, and has promised up to $500 million to help the company move a project forward.

The co-chairman of the powerful Senate Finance Committee, Bert Stedman, expressed deep reservations about the process.

“I think it’s quickly approaching the time that we need to look at cutting our losses, and freeing up the state from the shackles that are put on us under the AGIA agreement with TransCanada so we can move forward and try to open up our gas basins,” he said Wednesday night.

“If it looks like we have a chance of it being successful, we go forward. But if it looks like it’s not, we cut our losses and we move on,” he said. “I don’t want to be, as a state, tied up for another half a decade or longer on a project that’s not going to go forward.”

Gov. Sean Parnell and some House Democrats have remained committed to the process, seeing it as having brought Alaska closer than ever to realizing a long-hoped-for line. A major line is seen as a way to help shore up state revenues as oil production declines, create jobs and help provide more affordable, reliable energy instate.

Persily said he’s cautioning lawmakers against abandoning a big line for a smaller one, which would likely need heavy state subsidies to make it economic. A smaller instate line is being studied.

He said lawmakers might be better served looking at whether the money they’d put into a smaller line would help a major line get built.

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