Posted on 03/15/2007 9:59:30 AM PDT by thackney
Encouraging natural gas exploration on the North Slope is vital to ensuring the success of any gas line project the state adopts, Gov. Sarah Palin's administration told lawmakers Wednesday.
Currently some 35 trillion cubic feet of natural gas is known to be on the North Slope. But geological estimates predict there could be as much as 200 trillion cubic feet more, creating a potential for further revenues for the state if that gas can get to market.
But getting to that undiscovered gas is expensive, and lawmakers are now debating how big a role the state should play in providing financial incentives for energy companies to continue exploration.
Palin's gas line legislation, known as the Alaska Gasline Inducement Act, or AGIA, proposes several financial incentives for pipeline builders and gas producers, including provisions for pipeline expansion and exploration.
"Expansion and exploration are a big part of AGIA because they are the future of the North Slope," Kevin Banks, the acting director of the Division of Oil and Gas, told a Senate Resources Committee hearing Wednesday on the bill's second day of hearings since the governor introduced it on March 2.
"Without expansion provisions, exploration will be threatened."
Experts estimate it will take 30 years before a pipeline project becomes economically viable. Alaska's current 35 trillion cubic feet of gas, if moved at a capacity of 4.5 billion cubic feet a day, will run out in 21 years. Getting the estimated 200 trillion cubic feet of undiscovered gas on line is the only way to assure the line's ultimate profitability, Banks said.
If awarded the license to build Alaska's gas line under the AGIA bill, the pipeline builder must agree to create a reasonable transportation fee for gas producers who use the pipeline. A low fee would encourage gas producers to...
(Excerpt) Read more at adn.com ...
A BILL FOR AN ACT ENTITLED
"An Act relating to the Alaska Gasline Inducements Act; establishing the Alaska Gasline Inducements Act matching contribution fund; providing for an Alaska Gasline Inducements Act coordinator; making conforming amendments; and providing for an effective date."
http://www.adn.com/static/images/pdf/palin_gaslinebill_senateversion.pdf
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