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Palin set to announce gas pipeline plan

Posted: Friday, March 02, 2007

JUNEAU - Lawmakers are eager to see Gov. Sarah Palin's plan, which she hopes will spur the construction of a multibillion dollar natural gas pipeline.

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As her third month in office comes to a close, Palin planned to present the Alaska Gasline Inducement Act, also known as AGIA, today. The plan establishes criteria which energy companies must meet in exchange for inducement incentives from the state to build the pipeline

Palin spent the week assuring federal lawmakers and energy regulators - some of whom were critical of the state's apparent stalled progress - that her plan is moving forward.

That seemed to placate officials in Washington, D.C., but now she must convince state lawmakers.

Rep. Ralph Sam-uels, R-Anchorage, among the more well-versed lawmakers on the state's energy issues, said he would liked have seen parts of the plan earlier, but said the timing won't hurt the finished product.

"It's going to get well-vetted," Samuels said. "Whether we have our input now or in the next couple of months, it's going to have a lot of legislative input."

Still, the sense of urgency persists.

On Thursday, U.S. Sen. Lisa Murkowski identified concerns about an updated long-term outlook by the federal Energy Information Administration, released this week.

The report projected U.S. natural gas imports going from 16 percent in 2005 to almost 21 percent by 2030.

"We have seen the impacts in this country of our overdependence on foreign sources of oil," Murkowski said. "We must not make the same mistake with natural gas."

"With 35 trillion cubic feet of proven reserves of natural gas awaiting development in Alaska's North Slope, it is imperative that the state of Alaska and producers reach agreement on a contract to construct a natural gas pipeline."

Last year, Palin's predecessor - former Gov. Frank Murkowski - and three oil and natural gas producers had a contract proposal on the table, but it never reached the state Legislature for a vote.

That proposal - criticized by many because much of it was done behind closed doors - set the tax and royalty terms on the natural gas if a pipeline were to be built. However, lawmakers felt that deal gave the companies too much.

The hope was for a pipeline to be built from the North Slope through Canada and into the Midwest to deliver 4.5 billion cubic feet of natural gas a day, which is about 7 percent of the current U.S. demand.

But even a contract under the terms negotiated by Murkowski with Exxon Mobil Corp., ConocoPhillips and BP did not guarantee a pipeline would have been built.

Palin is not committing to any single plan, route or company; rather, she wants the competitive arena to produce a winner.

Once she took office, she embarked on a new path, one that fosters competition. She has since met with resource producers and pipeline companies which will vie for the right to build the pipeline.

Much of the process has been more transparent than last year's negotiations, many members of the Legislature have said. While they find the approach refreshing, they still await their chance for a critical look at the details.

"What we are hoping for is that AGIA gives us an open process rather than a closed process," said Sen. Hollis French, D-Anchorage, who filed a lawsuit to get Murkowski's plan made public last year.

"That was probably the chief error last year, swaddling the plans in secrecy until the point where we had to take them to court."



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