Gov. Knowles Discusses Tapping and Piping North Slope Gas
In the first meeting of the newly-formed Alaska Highway Natural Gas Policy
Council (AHNGPC) last week, Alaska Gov. Tony Knowles charged the 28-member
panel of community, business and labor leaders with the task of looking
into public policy questions surrounding the development and transportation
of natural gas in the North Slope.
"I created this council for one important reason: to ensure that
the interests of Alaskans are protected as we develop our North Slope natural
gas," Knowles said. "This means making sure that Alaskans are
hired to build and operate the gas pipeline and that Alaska businesses and
products are used. It means making sure that Alaska communities have access
to gas. And it means ensuring that Alaskans receive a fair share of the
revenues generated on this resource which belongs to all of us."
One of the reasons Knowles created the council is to figure out the best
way to move the estimated 100 Tcf of gas that is believed to be held beneath
the North Slope (see NGI, Jan.15). The governor
said he thinks the best way to develop Alaska's gas is via a pipeline along
the Alaska highway, which would deliver gas to domestic energy markets and
the lower 48 states.
"This is based on three facts: first, the consensus of the energy
world is that the only market today for financing a pipeline and the best
economic return to Alaska is in the United States," Knowles said. "Second,
Alaska must act with a high sense of urgency in supplying this market. The
energy gap created by this opportunity will be filled, and should be filled
by Alaska gas. Third, a project of this size and scope must have national
and Canadian support.
"There's a single hard, cold reality when it comes to our gas development:
it won't happen unless it's commercially viable," Knowles added. "As
many of you know, we've been dreaming and scheming about Alaska gas development
for a generation. Yet it hasn't happened because it hasn't met the key market
test. An Alaska Highway gasline does not exclude other projects. In fact,
the consensus of experts is that it makes other types of gas projects, including
a future LNG line, more economic."
Knowles said the Alaska Highway route also brings gas far closer to markets
in the South central region should Cook Inlet reserves ever prove inadequate
to meet demand. He said that the highway route even complements development
of Canadian gas in the Mackenzie Valley.
"Our mission is to promote the Alaska Highway Natural Gas Pipeline
project to North America that enables creation of a natural gas industry
in Alaska," Knowles concluded. "My charge to you is to help synthesize
the views and suggestions of Alaskans and help resolve the many policy issues
tied to gas development."
Of the new council, Knowles appointed former ARCO Alaska executive Frank
Brown and former Fairbanks Mayor Jim Sampson as co-chairs. Members of the
governor's Natural Gas Cabinet will serve as ex-officio members of the council,
along with Lt. Gov. Fran Ulmer.
Last week, the National Governor's Association (NGA) unanimously passed
a resolution to support the responsible development of Alaska natural gas.
The resolution also supported the development of the Alaska Highway pipeline
"This is the first national forum that is bi-partisan and represents
all 50 states, that is solidly behind not just the transportation of Alaska
natural gas but selecting the route that's in the national interest,"
said Knowles, who sponsored the resolution. "This is an important step
forward and will answer questions about the broad base of support that we
have, particularly in that it designated the Alaska Highway as the preferred
The projected route would run parallel to the existing Alcan Highway,
and would not cross any national conservation system units. Knowles said
that key rights-of-way and regulatory approvals for the project are still
valid from an agreement made in the 1970's with Canada for just such a project.
"Alaskans understand that if we are to meet the American market
demand, where the need is the greatest and it is economically in our advantage,
then the Alaska Highway is the right route," Knowles said. "Construction
of the Alaska Highway natural gas pipeline also opens other opportunities
for the use of our gas, whether gas-to-liquids or liquefied natural gas.
This pipeline does not oppose other alternatives, but in fact helps them."
The governor said that it is likely that more issues will rise between
now and the Nov. 30 deadline he set for the AHNGPC to have its report ready.