Saturday, February 28, 2009

Palin files two bills aimed at natural gas development

Sarah is looking for long-term solutions to help Alaska regarding their natural gas consumption, as well as short-term solutions to help with the current cost to consumers. She signed two bills yesterday that call for natural gas to be obtained in-state. The bills come as Alaskans expressed concern over the current high cost of natural gas. These bills will work hand in hand with the energy plan she proposed last year, which was a long-term solution.

Palin files two bills aimed at natural gas development
Fairbanks Daily Newsminer

By Rena Delbridge
Published Saturday, February 28, 2009

JUNEAU — Gov. Sarah Palin filed two bills late Friday that she said are the first steps in a plan to develop in-state natural gas for Alaskans.

The bills won’t be available to the public until the House receives them in a floor session, which could happen Monday.

Many Alaska leaders are calling for in-state natural gas development in advance of a large-diameter, transcontinental line, such as the state licensed TransCanada to pursue under the Alaska Gasline Inducement Act last year. Denali, a joint effort of producers BP and ConocoPhillips, also is planning a large line.

But lawmakers and others say the mega-project timelines are too far in the future to help Alaskans suffering high energy costs now. Natural gas also is being looked to as a way to replenish a state treasury somewhat drained by declining oil revenues and production.

Joe Balash, special assistant to the governor, confirmed that the bills address what some in-state gas project developers have said are regulatory and permitting stumbling blocks, and that the bills could rekindle a public-private partnership such as Palin announced last summer.

She said her administration, the Alaska Natural Gas Development Authority and Southcentral gas utility Enstar would be working together. Although Enstar and the administration have met since then, Enstar and ANGDA had not jointly pursued a partnership.

Details on Palin’s gas plan will be revealed at a briefing Tuesday, Palin press secretary Bill McAllister said.

“There is going to be a roll-out,” Balash said. “These two bills are part of an overall effort that the Palin administration is making to get an in-state pipeline going.”

He reiterated what Palin said when signing the Alaska Gasline Inducement Act license to TransCanada last summer. “She said we are confident that AGIA is the right way to go. But if for some reason a big project isn’t going to happen, we have to make sure Alaskans still get access to their gas,” he said. “It’s not that any decision has been made on how that is going to happen. It’s just that we’ve never lost sight of that.”

The bill addressing the Right of Way Leasing Act will lay out conditions a company receiving state leases must meet, including commitments to Alaska hiring and contracting; negotiating labor agreements; committing to future expansion; and providing distance-sensitive tariffs that could make gas more economical for in-state use, Balash said.

The first bill expands ANGDA’s role beyond its legislative mission of advancing a pipeline carrying North Slope gas to export.

The second bill alters statutory language so an in-state developer leasing state right-of-way could serve not only as a common carrier, but as a contract carrier. That means a company shipping gas could make “firm service” commitments to customers, instead of facing state rules to allow all new gas shippers in on line capacity.

The bill allows the Regulatory Commission of Alaska to issue a conditional certificate to a pipeline builder.

“This allows a pipeline developer to go to the RCA before they have their gas commitments or their financing in place,” Balash explained. “It helps create a little more certainty and predictability.”

That could cut down lengthy lead-time for projects.

Few legislators in Juneau have actually seen the bills.

Rep. Jay Ramras, R-Fairbanks, based his re-election campaign on a call for natural gas for Alaskans. He said he was briefed by people in Palin’s administration on the bills.

“I’m elated that all the choirs seem to be singing off the same sheet of music,” he said. “I’m very happy with the signals we’re getting from Governor Palin.”

He lauded natural gas as a way to change Alaska’s economy.

However, he said he doesn’t anticipate Palin’s bills will accomplish much, at least until the “stakeholders that are part of the demand and supply chain are all joined up.”

A common criticism of current natural gas development proposals is that few projects have suppliers and markets lined up.

Enstar spokesman Curtis Thayer said he’ll be anxious to see the legislation next week.

“We had some positive meetings with the governor’s office when we started this process,” he said. “But, we haven’t been a participant in the bill she has introduced. We would hope that it would not be controversial, that it would be a step forward.”

He said government has a role in moving along the processes in Enstar’s proposal to build a $4 billion in-state gas bullet line between the North Slope and Southcentral.

“What the governor envisions, I’m not sure,” he acknowledged. “We’re a private company. We know how to build pipelines. Permitting and regulating are a function of government. Hopefully, the two can work together.”

Ramras said he was glad to see Palin following the lead set by the House recently when lawmakers passed four resolutions he sponsored advocating Palin’s active participation advancing in-state gas development.

“We’re seeing a common direction between the legislative branch and the executive branch, which is precisely the intent of the four resolutions,” he said.

The resolutions were approved by the House and on Friday passed through the Senate Energy Committee.

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