Alaska editorial: Gas pipeline could finally be on its way

Posted: Friday, April 11, 2008

Announcements like the one from BP and ConocoPhillips don't come about all that often. When they do, they stop you cold.

"Could this really, finally, be the big step toward the gas pipeline?" many people might have wondered Tuesday following the news.


ConocoPhillips and BP, two of the big three oil companies doing business in Alaska, announced a $600 million effort to advance the North Slope natural gas pipeline project throughout the next 36 months. Company executives say the plan includes the goal of finding enough gas-holding customers - almost certainly including BP and ConocoPhillips themselves - in the next 20 months to commit gas to the project to proceed to federal certification and construction. They say $30 million will go toward job training, the study of in-state gas needs and an infrastructure assessment.

The commitment of $600 million should be enough to prevent the appearance of naysayers who might otherwise shout that this is just another empty effort by the companies to get a pipeline and that the companies really don't want to build one.

The announcement means it's time to stop the bickering and the anti-oil industry chatter that is popular in some quarters around the state. It gets us nowhere, which is where we have been for quite a while.

We all know it is long past time that this project get off the ground. Alaska's political leaders have played with other approaches and ideas in the year and a half since the last agreement with the companies was scuttled by the Legislature. The most prominent of those other efforts, Gov. Sarah Palin's Alaska Gasline Inducement Act, hasn't yet produced a proposal that has a high probability of getting Alaska and the nation the much-needed gas line.

Simply put, a pipeline project isn't going to happen without the upfront involvement of the companies that hold the legal leases to the gas, which, when delivered through the pipeline, would account for 6 percent to 8 percent of the nation's daily gas consumption.

BP and ConocoPhillips on Tuesday reshaped the gas line debate. There's every reason to think that the announcement will now cause legislators to wonder the wisdom of giving TransCanada, if the governor does forward that company's application to the Legislature, the $500 million in state money that would go with the exclusive pipeline license. TransCanada, although a reputable pipeline builder, doesn't have any of its own gas. Even its executives see a basic need to work with the major oil companies to get gas.

There's a clear plan on the table now, one that should induce the governor and legislators to lend their full support.

But is this a guarantee that we'll at long last have a pipeline?

No, but nothing can be guaranteed at this point on such a large and complicated project - be it undertaken by the oil companies, TransCanada or others - which reportedly requires thousands of permits and an untold number of hearings and reviews.

What $600 million toward a $30 billion-plus project does get Alaska, however, is an obvious commitment to try to get one.

Major issues, like the contentious matter of taxes, will still need to be worked out between the state and the companies at some point in the years ahead. And a project of this scale surely has many details that could lead to debate, dissension and delay.

This could, at last, be the big step toward getting the pipeline that the state needs for its future economic vitality.

Let's make sure we don't lose it.

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