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Anchorage Chamber Calls Gas Pipeline Top Priority for Alaska

The Anchorage Chamber of Commerce said last week in a new report building a natural gas pipeline from the North Slope to either the Lower 48 or the state's southern coast, should be the top priority of the state's oil and natural gas industry.

The 22-page report, the second volume of three by the chamber's National Affairs Committee, attempts to frame the issues surrounding the possible pipeline projects for the state's citizens. A proposed pipeline has been on the drawing board in the Alaska Legislature and the governor's office since the 1970s, but up to now, the price of gas would not support the cost to build, estimated at $20 billion in 2001 dollars.

"It should be obvious, but it bears repeating: if there isn't a gas pipeline, all of the other goals and priorities for it are moot," the chamber report noted.

Earlier this month, the Federal Energy Regulatory Commission reported costs to construct the gas pipeline will continue to rise as long as negotiations drag on (see NGI, Feb. 6).

Several pipeline proposals are on the table. However, privately, Gov. Frank Murkowski's office is negotiating with the three largest North Slope producers -- ConocoPhillips, BP plc and ExxonMobil Corp. -- on terms and tax rates if the companies together build a gas pipeline (see NGI, Jan. 16). The three producers hold development rights to most of the North Slope's 35 Tcf of gas, but negotiations have stalled on the terms of an agreement and tax rates. Murkowski had hoped to complete an agreement by the end of 2005, but his office said negotiations are continuing.

In the chamber report, the economic development group outlined the legal problems in trying to reserve pipeline jobs for the state's workers and contractors. Pipeline priorities for the state to pursue also are detailed. In general, the report urges the state to construct a pipe now, but said waiting a few more years could mean the pipeline might carry more gas, creating even more jobs, opportunities and revenue. The chamber also wants North Slope gas to first be directed to Alaska residents and to support new manufacturing in the state.

To download the full report, visit the chamber's website at www.anchoragechamber.org.

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