Alaska Would Kick in $500M for Pipeline

AP via Houston Chronicle ^ | Feb. 28, 2007 | STEVE QUINN

[thackney]

JUNEAU, Alaska — The state of Alaska is sweetening the pot to get a multibillion dollar natural gas pipeline built.

Gov. Sarah Palin on Wednesday announced Alaska would kick in as much as $500 million from the state's treasury to offset startup costs, like permitting fees.

"We need to progress this project. There are hungry markets for Alaska's natural gas," she said.

This perk will be part Palin's Alaska Gasline Inducement Act, also known as AGIA, which she plans to introduce Friday to the Alaska Legislature. Palin's bill would set project criteria which energy companies must meet in exchange for inducement incentives from the state to build a pipeline.

Palin and Department of Natural Resources Deputy Commissioner Marty Rutherford said the half billion dollar incentive illustrates the state's commitment to take on risk associated with a project that could take North Slope natural gas to Midwestern markets in the Lower 48.

It does not reflect any state ownership in a pipeline intended to ship 35 trillion cubic feet of natural gas from the North Slope; simply, it's a gift intended to get the process moving as quickly as possible.

And for some, that's enough measurable progress for now. Palin and Rutherford spent a week in Washington trying to ease the fears of nervous federal regulators and lawmakers about the pace of project.

Palin said she asked for no favors from federal officials. Instead, she and Rutherford simply presented the state's plan to get a gas line built.

"She explained the state's position; we are behind her and we hope it works," U.S. Sen. Ted Stevens, R-Alaska, told The Associated Press after Palin's news conference. Stevens last week said he also was concerned with the pace of the project.

U.S. Sen. Lisa Murkowski, R-Alaska, also said the progress looked good.

"They've had a three-month turn around and with all they've had on their plate, I'm pleased with where we are now," she said.

"They have given good thought to the parameters they have chosen to outline," Murkowski told the AP. "We are very hopeful the inducements will be adequate and the must-haves from the state's perspective will be acceptable."

Palin also met with Federal Energy Regulatory Commission Chairman Joseph T. Kelliher, whose agency also has been critical of the pipeline's progress in its report to Congress.

Kelliher, however, said in a statement this week he was pleased with Palin's report.

"We talked about her efforts on the Alaska natural gas pipeline, which I believe represent the best hope for building a pipeline to bring Alaska's vast natural gas resources to the energy-consuming Lower 48 states," Kelliher said.

Palin has repeatedly said Alaska's natural gas is a vital component of the nation's energy plan.

"It makes no sense to sit on clean, safe energy supply while the country imports energy from foreign sources," Palin said Wednesday during a telephone news conference in Washington. "Alaska is willing and able to do the supplying."

Last year, Palin's predecessor _ former Gov. Frank Murkowski _ and three oil and natural gas producers had a contract proposal on the table, but it never reached the state Legislature for a vote.

That proposal _ criticized by many because much of it was done behind closed doors _ set the tax and royalty terms on the natural gas if a pipeline were to be built, however, lawmakers felt that deal gave the companies too much.

Even a contract under the terms negotiated by Murkowski with Exxon Mobil Corp., ConocoPhillips and BP PLC did not guarantee a pipeline would have been built.

That commitment would have come about four years later after planning and permitting were completed.

[Jet Jaguar]

BTTT

[John 6.66=Mark of the Beast?]

I'm from Kansas and we have one of the largest gas fields in the US. 8.7 Trillion cubic feet. yet I get my gas from Oklahoma. Why?
Kansas

Kansas has a lot of natural gas reserves. They are located in the center and southwest corner of the state. We have about 8.7 trillion cubic feet of gas reserves, the 10th largest in the United States. In 1994, about 32% of Kansas' total fuel consumption was natural gas, and of the total fuel that the state produced, natural gas was 73%. According to Lynn Whatney, University of Kansas Energy Research Center, 42% of the state's natural gas is exported and only 6% of the natural gas is used for power production in the state. Natural gas supplies 13% of the energy used in transportation in the state.

Annual production of natural gas in Kansas increased steadily in the past until 1996. Then, energy prices took a sharp decline and many gas producers stopped operating their wells until the prices increased. Most production occurs in the Hugoton Gas Area, one of the largest gas fields in the northern hemisphere. It is found in southwestern Kansas, Oklahoma and Texas. Kansas ranks 6th in the nation for natural gas production. The export of natural gas adds many dollars to the Kansas economy each year.

[thackney]

[ASOC]

Didn't the Canadian venture capital guys ask for $500M up frnt? Kinda fuzzy on this.

[thackney]

I don't recall.

[ASOC]

Ya, well, it will come up again if the Legislature has to put out 500M and does get to line any local pockets.

I did find this
http://www.financialsense.com/editorials/powers/2004/0901.html

very interesting, somewhat dated, read.