4-11-13

The Government Gas Pipeline

Commentary by

Dave Harbour

Late yesterday, we followed the Senate Finance Committee review of the Alaska Gasline Development Corporation’s answers to questions about the pending, HB4 that would expand AGDC’s powers and infuse it with operating capital.  (Watch the video.  Photo: House Speaker Mike Chenault.)

We have always supported the concept of this project as an insurance policy for Interior and South Central Alaska electric power and space heating consumers.  This is because Cook Inlet gas supplies are dangerously low, a fact exacerbated by a regulatory decision six years ago (i.e. which has likely cost ratepayers over $.5 billion in unnecessary natural gas expense since then.)

Enstar, the local gas distributor, has worked hard to safeguard its customers from gas shortages.  It has aggressively pursued more gas supply contracts, built a gas storage facility and investigated new gas supplies–from Prudhoe Bay to potential gas imports.  Still, during a cold winter the actual deliverability of supply could push available supplies beyond the breaking point.  Every year, the threat of a gas shortage grows.

The AGDC project involves a 737 mile pipeline from Prudhoe Bay to Southcentral Alaska, after winding its way by Fairbanks.

The lion’s share of its right of way work is done and its engineering work is moving steadily toward a potential ‘open season’ wherein those interested in the gas can bid on pipeline capacity to move purchased gas.

While a government owned pipeline concept is controversial, running out of natural gas is unacceptable.  If sufficient new gas reserves are proven to exist in Southcental Alaska, the AGDC project could be terminated.  But if there is no AGDC insurance policy and more gas is not found, the old cliché about, "freezing in the dark", comes to mind.

During the hearing yesterday, several witnesses distinguished themselves.  The HB 4 sponsors are House Speaker Mike Chenault (NGP Photo, above) and Representative Mike Hawker (NGP Photo with Rena Delbridge).  Hawker thanked Senators for their complete hearing of the issues while Chenault described the compelling need for the project to safeguard citizens.  Hawker’s staff executive, Rena Delbridge, artfully briefed the committee on all current issues related to the bill before them.  Frank Richards, representing AGDC, offered highly credible, technical briefings and responses to questions.

As our readers know, we have followed Arctic gas pipeline issues for many decades.   We have seen many projects come and go. 

We briefly worked with AGDC and continue to believe that the project is closer to becoming reality than any of its cousins for several reasons:

• The marketplace requires natural gas. 
• Supplies of natural gas are dangerously low; if adequate supplies are found, AGDC could be discontinued prior to construction.
• Leaders like Anchorage Mayor Dan Sullivan with support from City Manager George Vakalis and the Mayor’s Energy Task Force have educated the public about the energy crisis; and, Sullivan has coordinated messaging with other Southcentral mayors.
• Governor Sean Parnell, along with legislative leaders and highly competent staff have forwarded the AGDC vision of a gas pipeline link to the Arctic in lieu of any other viable option.
• The AGDC Staff, mostly on contract status, have professionally coordinated with stakeholders, other state agencies, legislators, producers and potential shippers in preparation for final pipeline capacity commitments, financing, engineering design and construction.

This is not a case of a heavy handed government saying, "We are going to create a gas pipeline bureaucracy come heck or high water".

Rather, this is a case of government exercising its proper role of protecting citizens.

Our hat is off to the dedicated public officials who have developed the vision, protected and remained focused on the mission and worked so hard to so successfully overcome political technical and financial obstacles.

At this writing, HB 4 hasn’t received final approval.  We expect it will.  When it is the law of the land, the citizens will have been well served.

To NGP Readers: 

Here are Consumer Energy Alliance’s earlier comments on the EIS, for your reference.  

CEA’s general concern is that  the proposed mitigation measures will limit OCS exploration activity without any significant benefits for the local marine mammals.

NMFS should focus on cooperative mitigation measures with companies – such as Shell’s efforts to suspend operations in the Beaufort during whaling season – as opposed to broadly limiting activity.

Note: this is the kind of comment opportunity that badly needs elected officials from throughout Alaska submitting comments for the record.  Otherwise, the record will not be balanced nor will it reflect the opinion of Alaska’s elected leaders.

-dh