Wagoner bill would fund ANGDA study

Posted: Wednesday, March 21, 2007

Sen. Tom Wagoner filed a bill Monday seeking nearly $4.53 million to fund a study of a draft in-state gas marketing plan proposed by the Alaska Natural Gas Development Authority.

The money, which would come out of the general fund and pass through the Department of Revenue, would be used to evaluate ANGDA’s Alaska Gas Market System project. The AGMS project envisions a pipeline capable of delivering 1.25 billion cubic feet of gas per day from Prudhoe Bay to in-state markets in Fairbanks, Cook Inlet, Valdez and the Yukon River.

According to Wagoner’s office, Senate Bill 129 would provide funding for the only North Slope gas commercialization effort focusing specifically on meeting Alaska’s growing energy needs with natural gas. It would also further the efforts of ANGDA, a corporation created by public mandate in 2002. Sixty-two percent of Alaska voters approved formation of ANGDA.

The effort would result in publicly available information that could prove key in comparing alternative proposals for getting Alaska’s gas to market.

ANGDA developed the AGMS in late 2006. According to a project summary provided by Wagoner’s office, the authority sees the marketing system as an important fallback alternative if the difficulties of other, larger projects outside Alaska encounter major delays. It targets three major markets: heating and electric power generation for utilities; propane for distribution at several points along the coastline, highways and rivers; and industrial and petrochemical plants in Alaska.

Soon after taking office, Gov. Sarah Palin challenged ANGDA to develop an Alaska-based project to bring North Slope gas to market. In a letter to ANGDA Board members in late January, Harold Heinz, the authority’s chief executive officer, presented the AGMS project proposal based on multiple studies conducted over several years.

He called the “conceptual proposal” a starting point for project development.

“ANGDA intends to work with any and all interested experienced parties in a cooperative, non-exclusive study effort leading to a project definition and open season within one to two years,” Heinz said. An open season is the process by which a pipeline company invites prospective shippers to bid for pipeline transportation capacity.

Heinz called the AGMS a “very doable project” that could be built with an Alaska workforce to provide a timely solution to Alaska’s energy crisis. It also overcomes key public and legislative concerns highlighted during public review of the Stranded Gas Act gas line contract proposed by the former governor Frank Murkowski’s administration, Heinz said.

The ANGDA pipeline would follow the general alignment of the Trans-Alaska oil pipeline to Valdez. A connector would link Glennallen to existing natural gas facilities and the Beluga gas field at Cook Inlet. Other connections would be made at the Yukon River, Fairbanks, North Pole, Delta Junction, and Glennallen.

The AGMS proposal originally included construction of an LNG plant at Valdez, but Mary Jackson, aide to Sen. Wagoner, said reference to the LNG plant and funding for it are no longer part of the concept.

In a sponsor statement, Wagoner said ANGDA’s joint-work approach should attract companies with significant expertise.

“ANGDA was formed by the people to be involved in getting North Slope gas to market in a way that maximizes the benefits to Alaskans,” he said. “ANGDA is pursuing the people’s mandate.”

SB 129 has been referred to the Senate Finance Committee.

Hal Spence can be reached at harold.spence@peninsulaclarion.com.

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