DNR staff tout AGIA process

Administration says progress being made toward gas pipeline

Posted: Wednesday, February 27, 2008

Representatives from the Department of Natural Resources came to the central peninsula to give residents an idea of the progress the state is making toward the construction of a natural gas pipeline from the North Slope to Alberta, Canada, under the Alaska Gasline Inducement Act (AGIA).

What they came away with was a positive dialogue between members of an educated community that, for the most part, was as eager to see AGIA move forward as the speakers.

"I think AGIA is good for Alaska," said Jim Kauffman, a former Agrium employee. "It should mean gas for Alaskans at reasonable prices."

DNR Deputy Commissioner Marty Rutherford and Kurtis Gibson, deputy director and petroleum investment manager for the Division of Oil and Gas, provided an outlook on the AGIA application and evaluation process, illustrated why an application submitted by the TransCanada Alaska Company was considered more acceptable than the other four applicants, and compared AGIA with ConocoPhillips' alternative gas line project at a town hall meeting held at Kenai Peninsula College Monday. Soldotna was the AGIA team's latest stop in a statewide campaign to convince the public that AGIA is best for Alaska. Monday's meeting also came toward the end of a 60-day public comment period. Community members have until March 6 to comment on the TransCanada application.

At the start of the public meeting, Gibson made it clear that it didn't take the place of a formal public hearing. Because the public comment period doesn't end until March 6, he said he couldn't delve into specifics about the evaluation process with regard to TransCanada's application, but he could focus on the AGIA application and evaluation process in general. He said if the Legislature approves TransCanada's application, the public will be given another opportunity to comment.

According to proponents, one of the fundamental aspects of AGIA is that it protects Alaska's long term interests by providing an open and competitive process. Rutherford said approximately 35 trillion cubic feet of gas was discovered as a result of oil exploration on the North Slope. The suspected existence of hundreds of trillions of cubic feet of undiscovered gas reserves presents a solid opportunity for new players to invest money, she said.

Rutherford also touted the project's transparency and encouraged the public to go to AGIA's Web site, where they can find everything from a copy of the Stranded Gas Development Act to Gov. Palin's letter to ConocoPhillips in response to their alternative project. Rutherford said the major difference between the Stranded Gas Development Act of former Gov. Frank Murkowski's administration and AGIA is that there are no negotiations behind closed doors.

"(AGIA) allows any qualified project proponent to bid at a competitive basis," she said. "TransCanada is the remaining applicant, but just because only one applicant (exists) does not mean that license will be issued."

The TransCanada plan would build a 48-inch pipe stretching across 750 miles in Alaska. It includes six compressor stations in the state and would have an initial average daily capacity of 4.5 billion cubic feet per day with the capability to expand to 5.9 billion cubic feet per day. The pipeline would stretch an additional 1,000 miles between the Alaska-Canada border and a hub in Alberta. From there, gas would go to various markets in Canada and the Lower 48. Rutherford said TransCanada is also considering a Liquified Natural Gas alternative should obstacles within Canada block an overland pipe. In that case, instead of traveling directly to Alberta via a pipeline, the gas would reach its destination by way of Valdez.

Members of the public wanted to know what AGIA would do to create jobs in Alaska. They also asked why a tidewater port in Cook Inlet wasn't considered if the state decided to utilize the LNG alternative.

"The applications received were all Prudhoe to Valdez," Rutherford said. "We didn't have an application (that included) Cook Inlet."

Commenting at the meeting, Bill Warren said he likes AGIA, but he doesn't want a gas pipeline going through Canada. He said he supports a plan put forth by the Alaska Natural Gas Development Authority (ANGDA) which would build a pipeline solely in Alaska. He compared the TransCanada plan and ANGDA plan to footwear.

"AK has a size eight foot," he said, "and ANGDA fits the shoe. (TransCanada) is a mega job, it's too big."

Cody Rice, a petroleum economist with the Division of Oil and Gas, said the team's next stop is Dillingham. People have asked tough questions during the team's travels, he said, but also have shown overwhelming support and trust.

"It's refreshing and rewarding to have," he said.

Public comments on TransCanada's application can be submitted online at www.dog.dnr.state.ak.us/agiacomments or mailed to AGIA License Office, State of Alaska Department of Revenue, 550 West 7th Avenue, Suite 1820, Anchorage, Alaska 99501. Comments also can be faxed to Chris Rutz or Lana Steinert at 907-771-3930.

Jessica Cejnar can be reached at jessica.cejnar@peninsulaclarion.com.

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