Investing in ourselves: Securing energy for Alaska

Posted: Tuesday, March 23, 2010

In a speech on March 12, former U.S. Sen. Ted Stevens offered his assessment on the prospects for the Alaska Gasline Inducement Act, or AGIA. His verdict: AGIA will fail to produce a large natural gas pipeline to the Lower 48 because a market for Alaska gas no longer exists. At the same time, Sen. Stevens advanced a course of action that mirrors a key platform in my campaign for governor: build a natural gas bullet line from the North Slope to Fairbanks and Southcentral to deliver affordable, reliable natural gas to Alaskans.

We all know the history. For nearly 30 years, Alaskans have been discussing North Slope natural gas and how we can tap it, both as an energy resource and a revenue source, to offset declining oil production.

The path we are now on under AGIA is based on the notion that government can dictate the terms of construction, shipment, and economics of a gas pipeline through Canada to Lower 48 markets. The current governor says AGIA is the answer. I believe it is a dead end.

As the House Majority Leader, I voted against AGIA in 2007 because I felt - and still believe - that AGIA ignores the fundamental economics of building a $40 billion gas pipeline and moving Alaska's gas to market.

Now, three years after that vote, we find ourselves in a starkly different energy world. Technology has vastly improved the opportunity to develop shale gas. There are large shale gas formations across the United States, Europe, and China. The world is now awash in gas and prices have fallen dramatically.

This is bad news for Alaska. Shale gas is a direct competitor with our natural gas. Much of this resource is near large markets that don't need long pipelines.

So where does this leave Alaska? We still have huge gas resources, but the prospects of a major gas sale, and the project's $40 billion price tag to get the gas to market, are definitely not as bright as they were a few years ago.

But Alaska can do something. Invest in ourselves.

Alaska can build a natural gas bullet line from the North Slope to Fairbanks and Southcentral that will energize local economies and keep Alaska families warm. It can provide energy for job-sustaining opportunities such as the Donlin Creek Mine, value-added industry like the Kenai LNG plant, and provide abundant energy to grow Alaska's economy.

Is investing in a bullet line wise? A bullet line is like a highway. Roads are considered a sound infrastructure investment because they promote economic development, create jobs, and spur private sector investment. A bullet line is the same type of infrastructure; it will provide direct benefits and new opportunities for Alaskans.

The natural gas bullet line is our energy highway to the future.

Affordable energy for Alaskan families shouldn't be "Plan B," to be decided after the success or failure of AGIA or after the global marketplace has decided the role of shale gas. If shale gas continues to play the role that many global energy experts predict it will, Alaska will be without a gas pipeline for decades. Alaskans will be no better off in the future than we are today, still paying some of the highest energy costs in the nation.

We don't need more studies, graphs, charts or speeches. We need a bullet line that provides energy to Alaskans. This should be the No. 1 priority. Economic growth, jobs, private sector investment and opportunity for our children and grandchildren will all flow from the affordable, reliable energy the bullet line will provide.

We can build the bullet line now. All it takes is leadership.

• Ralph Samuels is a Republican candidate for governor of Alaska and served in the Alaska Legislature from 2003-2008.

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