Alaska Gasline Caucus Hears Fauske's Plan

Alaska Gasline Caucus Hears Fauske’s Plan

Alaska Gasline Development Corporation’s Alaska Stand Alone Gas Pipeline Project 7-1-11 Report to the Legislature As Required Under Enabling Legislation, HB 369

Report and observations: Yesterday the Alaska Gasline Development Corporation (AGDC) President and CEO, Dan Fauske (NGP Photo), told legislators that the Alaska Stand Alone Gas Pipeline (ASAP) project would be good for, "…all of Alaska, not just the urban areas," and predicted that with timely legislative funding natural gas could be flowing from Prudhoe Bay through Interior Alaska to the Cook Inlet area by 2019.

AGDC is a public corporation organized as a subsidiary of the Alaska Housing Finance Corporation (AHFC), of which Fauske also serves as Executive Director and CEO. AGDC’s Project Manager, Dave Haugen (NGP Photo) emphasized that in spite of government funding, "This is a market driven project just like the Denali and TransCanada gas pipeline projects." He said the upcoming phase of work would include an "open season", as the two larger projects have conducted, and that to be successful and finally sanctioned the $7.52 billion ASAP project would have to achieve firm gas transportation commitments during the open season.

During the course of his presentation, Fauske revealed his intimate knowledge of the project, supplemented with testimony of his staff experts and augmented with a touch of professional salesmanship. "This is a significant project going forward for the state, Fauske said." He said pipeline construction would employ 8,000 directly though the University of Alaska’s Institute of Social and Economic Research produced a study projecting direct and indirect employment of 14,000. He called the project the "best training ground possible," referring to the significant employment opportunities to be created for University of Alaska graduates specifically all Alaskans, generally.

"I believe we are farther ahead now than where we thought we’d be last year," Fauske said. He expressed a personal opinion that Alaska is "blessed", that no other state (with possible exceptions of states like North Dakota and Wyoming) has the ability during a time of general economic downturn to create such opportunity.

He cautioned lawmakers from his real estate vantage point as CEO of the Alaska Housing Finance Corporation that with the shortage of natural gas in Southcentral Alaska, "You can’t let the lights go out," in the largest population centers. He said that in his travels around the state, he finds that, "…people are fired up about the project." In Eagle River recently, he recalled, someone said, "We hope the big gas pipeline is built but, if not, at least we have this one to count on."

Other meeting vignettes:

Senator Fred Dyson (NGP Photo) wondered if a government sponsored project to bring Alaska North Slope (ANS) gas to Southcentral Alaska would interfere with other players in the private market: Cook Inlet gas explorers, coal and alternate energy investors, for example.

Caucus Co-chair, Senator Lesil McGuire (NGP Photo) agreed with the need to be concerned about this project’s effect on other investor activity but expressed continuing support for the ASAP concept which she and her staff had created in preparation for passage of the 2010 enabling legislation. She also thanked Fauske and his staff for their patience in working within a legislative process that she described as ‘non-lineal’.

Legislators all expressed appreciation for Fauske’s effort though several also acknowledged some apprehension about supporting a government owned gas pipeline.

Senator Cathy Giessel (NGP Photo) thanked Fauske for his diligence and for his determination that the ASAP project will not replicate failed, publicly funded projects of the past.

See related ADN story here. See other meeting photos below. (Note: our lack of coverage of these an other Legislator and witness remarks does not reflect our opinion of the importance of other matters covered or opinions given; but, rather the fact that the author was only present for a portion of the meeting.) -dh

Representative Mark Neuman, Caucus Co-Chair