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Alaska Legislation Would Combine Energy Agencies

April 13, 2009
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As Alaska wrangles with declining in-state natural gas supplies and pursues a long-haul pipeline to commercialize its North Slope gas reserves, lawmakers have proposed that the state's Energy Authority and Natural Gas Authority be folded into the Alaska Department of Energy.

Among the tasks of the expanded department would be to "develop and administer a comprehensive energy plan for the state, addressing energy production, distribution, conservation and consumption statewide..." and "lead the implementation of statewide energy strategies to ensure reliable, stable supplies of electricity, heating fuels, renewable and alternative energy...," according to HB 218, which was read for the first time last Monday in the House Energy Committee.

Earlier this month U.S. Sen. Lisa Murkowski (R-AK) introduced federal legislation that would potentially streamline development of an in-state gasline to meet the needs of the state's Southcentral region, which is facing a gas shortfall due to declining supplies from the Cook Inlet (see NGI, April 6; Jan. 12). ENSTAR Natural Gas and Chugach Electric Association, the state's largest electric utility, have not been able to agree with gas producers on long-term contract terms. Producers, such as Marathon Oil Co., have said they need more clarity on the market for their production before they step up drilling efforts.

Last month Marathon's Alaska manager told the Alaska Support Industry Alliance that the company has reduced drilling of new Alaska gas wells by 50% this year, as reported by the Alaska Journal of Commerce.

Recently a study found the prospects for a long-haul pipeline to carry North Slope gas to be in jeopardy, in part do to growing production from established and emerging unconventional gas plays in the Lower 48 (see NGI, Feb. 9).

The legislation also would place the state's home energy and weatherization program under the Department of Energy.

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