NGI The Weekly Gas Market Report / NGI All News Access

Murkowski Bill Would Streamline In-State Gasline

Mindful of in-state natural gas needs, U.S. Sen. Lisa Murkowski (R-AK) last Thursday introduced legislation designed to streamline development of an in-state natural gas pipeline in Alaska by allowing its passage through a national park.

The Denali National Park and Preserve Natural Gas Pipeline Act would allow the National Park Service to, subject to a National Energy Policy Act review, authorize a right-of-way for construction of an in-state gas pipeline along the Parks Highway for the roughly seven miles the highway passes through Denali National Park. The legislation would remove a potential obstacle for proposals to construct a pipeline to deliver gas to Southcentral Alaska.

"Southcentral faces a serious gas shortage as early as 2014," Murkowski said. "We can't wait for construction of a larger gas line to the Lower 48 before we start addressing our own energy needs."

Gas production in Cook Inlet, which provides fuel for the bulk of the power generated for Railbelt communities, has been slowing significantly in recent years. In order to continue to provide gas to the Railbelt, ENSTAR Natural Gas has proposed construction of a natural gas bullet line capable of carrying up to 500 MMcf/d from the Brooks Range.

In late January Alaska Gov. Sarah Palin said her goal was to have an in-state 460 MMcf/d pipeline constructed in five years (see NGI, Jan. 26). A report prepared in early February pointed out that the state needs to focus on supplying its own people before worrying about supplying the Lower 48 via a pipeline to Canada (see NGI, Feb. 9).

The report noted that each of the in-state gas distribution proposals reviewed -- ENSTAR Natural Gas' bullet line, the Alaska Natural Gas Development Authority (ANGDA) spur line and Fairbanks Natural Gas' trucked North Slope liquefied natural gas (LNG) project -- faces challenges and do not, as stand-alone enterprises, appear to satisfy Alaskans' energy timeliness and affordability requirement. The report concludes that "each contains components that, if aggregated, could provide Alaskans with affordable energy and mitigate air quality issues in an acceptable time frame."

Palin recently introduced state legislation to advance an in-state pipeline (see NGI, March 9).

The alternative to Murkowski's proposal would be to build the pipeline around Denali National Park, through remote and currently undisturbed land. The granting of a permanent 20-foot easement, and possibly a 100-foot construction easement, would also solve maintenance and other environmental issues associated with the proposed alternative routes through the area, Murkowski said.

The intent of the legislation is not to determine which of the alternatives for an in-state gas line should be built. Instead, it's meant only to remove one potential obstacle to a successful project, she said. The ANGDA has proposed an alternative plan to build a pipeline down the Richardson and Glenn highways.

"It's not my desire to prejudge the outcome of which project or route should be selected, since that decision will be made by Alaska state regulators and financial markets," Murkowski said. "I'm proposing this bill simply to remove uncertainty about the cost of constructing a pipeline along the Parks Highway. Removing the uncertainty of permitting and regulatory delays will at least allow the Parks Highway route to compete on a level playing field with the Richardson and Glenn Highway routes."

ENSTAR and Anchorage-based Chugach Electric Association have been struggling to secure gas supplies for their operations as Cook Inlet supplies dwindle and contract negotiations with producers have been less than productive (see NGI, Jan. 12).

©Copyright 2009 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.