State should partner on natural gas line

By government estimates, Alaskans are sitting on trillions of feet of natural gas. Yet, on a recent local news broadcast local power companies warned that increased customer costs are just around the corner. Why? Because available gas is decreasing and it will become necessary to purchase LNG from outside sources to meet the demand.

Waiting for Trans Canada and other interested corporations to make more gas available to Alaskans has become the norm. However, with the implementation of increased fracking activities in the lower 48, natural gas has become abundant and the prices have correspondingly dropped while construction costs are continuing to rise. It seems that a tidewater gas line now seems to be the most profitable to the corporations in question. The governor apparently has similar feelings since he has made a couple of trips to the Pacific Rim countries attempting to set up future sales.

I wonder if any thought has been given to the state putting out a bid for an instate gas line with the state partnering with the company that gets the bid? Costs of construction could be shared between the two entities and percentages of the costs and subsequent profits could be identified in the bid. The state may have a slight increase in personnel to oversee the operation but the construction and operation would be the responsibility of its partner company.

At first blush, partnering appears to have several advantages: a commitment to a firm date the new line would be operational, service to larger areas of Alaska’s population, the recovery of invested state funds and continued income for the state after that period, the use of Alaskan labor, and, depending on the size of the pipeline, the sale of LNG to Pacific Rim countries.

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