Federal coordinator says Alaska's gas line plan must keep momentum

Posted: Tuesday, January 29, 2008

JUNEAU - Federal gas pipeline coordinator Drue Pearce said Monday she believes Gov. Sarah Palin's gas line plan is working - so far.

Pearce also told the Senate Resources Committee that the momentum must continue or Congress could intervene.

Pearce, a former Alaska state Senate president, said there is no specific federal government action planned, but progress must continue.

"Each time I go to the Hill and meet with members, whether it's in a committee setting or whether it's one-on-one when I meet with staff, there is a lot of interest in why don't we see a pipeline, why isn't there a pipe in the ground?" Pearce said.

"It is likely, under frankly any administration, that Congress might move forward and more proactively to push getting a pipeline built, particularly if we don't license and see more (liquefied natural gas) plants get built in the Lower 48," she said.

For now, Palin's Alaska Gasline Inducement Act has produced a conforming bid from independent Canadian pipeline company TransCanada.

But Houston-based ConocoPhillips says its alternative plan warrants consideration, and it would like further discussion with Palin's energy team.

Both companies want to tap into the energy rich North Slope, where 35 trillion cubic feet of natural gas reserves lie and both want to take it to Midwest markets through Canada.

The Legislature has begun the debate over whether TransCanada's emergence as the only compliant applicant out of five is cause for concern. Pearce laid that to rest.

"Every point on the time line from your passage of AGIA (last May) has moved the ball forward a little bit," Pearce said. "I certainly see that as progress. In terms of how many, the governor has said we only need one good proposal, and frankly that is correct.

"There aren't a huge number of companies that have experience to build huge pipelines in North America, particularly in the north, so I don't think it's a detriment if there is one (applicant) moving forward, particularly if it's a good one."

The gas line debate comes at a time when natural gas has become an increasingly valuable source of energy with U.S. natural gas demand growing about 1.5 percent a year for two decades since 1986.

As the demand grows, so too will the federal government's interest for progress on an Alaska gas pipeline, Pearce said.

"There is a lot of gas left to be found; there's a lot of gas in the Gulf (of Mexico) and the Lower 48, but the demand in the United States is going to rise," Pearce said. "I would expect you would see them look seriously whether or not the federal government should step in."

With so many regions in the continental U.S. off limits to oil and gas development, Alaska's gas line could help met American demand by shipping trillions of cubic feet of gas to market.

A gas line, discussed since Alaska began shipping oil in the 800-mile, trans-Alaska pipeline 31 years ago, has major long-term implications toward powering North American homes and business.

President George W. Bush nominated Pearce to be federal coordinator of an Alaska natural gas pipeline project in 2006.

Congress ordered the creation of the job in 2004 as part of legislation designed to speed federal review of the proposed pipeline.

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