Alaska editorial: Doubts remain about in-state gas pipeline

Posted: Friday, July 18, 2008

Alaskans need to see a rational business plan before the state goes any farther with the undefined "partnership" on an in-state gas pipeline.

The news conference announcing the "partnership" recently was premature, at best. The confusing mix of contradictory claims and perceptions needs to be dealt with immediately by Gov. Sarah Palin's administration to present a clearer picture to the public.

The state and the parties should have worked out some of the key details before announcing a partnership that so far seems to exist in name only.

Enstar is studying a pipeline along the Parks Highway from Anchorage north to Fairbanks and to the North Slope. The Alaska Natural Gas Development Authority wants to build a spur line from Delta to Anchorage via the Richardson and Glenn highways.

At the news conference, the Palin administration said the Richardson and Glenn route is the preferred alternative. But Enstar and ANGDA do not appear to be in sync on this.

ANGDA wants $25 million of state money to study building a line from Delta to Southcentral. It is talking about building a plastic pipe from Delta to Fairbanks - that line would possibly carry gas from Cook Inlet to Fairbanks.

We need to see a stronger case for the Richardson-Glenn route other than ANGDA's continual promotion of that option.

Likewise, we need to learn if the Parks Highway route might be less expensive and therefore require less of a state subsidy.

It's not right to risk state resources based on a series of "ifs" and "maybes."

For starters, the proponents need to reach consensus on where the gas for this pipeline would be coming from, who would pay for it and how much of a subsidy will be required.

We need a much broader discussion.

The big motivation is how to get lower-priced energy in the Interior. There are many ways to do this. At a time when we have a temporary abundance of cash, we cannot abandon the normal restrictions that reduce the chance of entering into agreements that are not the best use of our resources.

We need to consider whether subsidizing a multi-billion dollar pipeline is superior to, say, building the Susitna hydroelectric project or selling royalty oil at a lower price.

As to whether the gas for this pipeline would come from Cook Inlet or the North Slope foothills, that should be nailed down before anyone starts building a pipeline.

It's not enough for the state to speculate that building a pipeline from Anchorage to Fairbanks will somehow unleash an immediate and successful exploratory boom that will allow new supplies of Cook Inlet gas to be flowing into Fairbanks in 2013.

It's also not enough to say we can build a pipeline from Anchorage to Fairbanks and if, by 2013, new Cook Inlet reserves are not on line, then we'll spend more billions to go to the North Slope.

That doesn't strike us as a business plan. It strikes us as a concept that needs more work.

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