Gas spur may become reality

State lawmakers have broadened the scope of work for the Alaska Natural Gas Development Authority, currently charged with investigating the feasibility of a gas pipeline from the North Slope to Valdez.

House Bill 417, sponsored by Rep. Mike Chenault, R-Nikiski, which won legislative approval Saturday and is awaiting transmittal to Gov. Frank Murkowski, requires ANGDA to devote equal analysis to a more direct pipe route to Cook Inlet. Currently, ANGDA is focused only on a North Slope-to-Valdez pipeline project that might include a spur line to the gas-hungry Cook Inlet region.

Chenault and Sen. Tom Wagoner, R-Kenai, who had sponsored the companion bill SB 247, began the session urging their House and Senate colleagues to widen ANGDA's project description.

"Mike and I worked hard on these bills to help bring a natural gas pipeline to Cook Inlet basin," Wagoner said. "We (the Cook Inlet gas industry) already know how to ship LNG and obviously, we have a strong support for this type of economic development within our community."

HB 417 requires ANGDA to consider alternative routes and choose the one that proves most beneficial. Permitting, rights of way and environmental issues, as well as costs will be reviewed for both routes, the Kenai Peninsula lawmakers said in a joint press release Monday.

"Working together again, we have been able to bring the residents of the Cook Inlet area a step closer to realizing a natural gas pipeline," Chenault said. "I have confidence that the Cook Inlet route will be selected as the most beneficial."

Finding ways to bring natural gas to Southcentral Alaska has always been considered a part of the ANGDA's directive, said the authority's chief executive officer, Harold Heinze.

"Basically, to do the due diligence on this (the North Slope-Valdez project) we've got to look at alternatives," he said Monday. "The bill is helpful in making that OK. The other thing it does is put us in a little better position to at least go to some folks who have studied (alternative routes) in the past and see if they can make some information available."

Oil and gas companies, including Yukon Pacific, ConocoPhillips and others, Heinze said, have explored the direct-route pipeline idea in detail. ANGDA will seek access to that information, he said.

House Bill 417 itself does not increase funding to ANGDA, Heinze said. Initially funded with $150,000, the authority has since received an additional $200,000. Recent legislation gave the Department of Revenue money for work on gas-related issues, Heinze said, and some $650,000 of that is earmarked for ANGDA. The authority, Heinze added, has designated $100,000 for work related to getting gas to Cook Inlet.

Heinze said passage of HB 417 was "a good thing." Alaska, he said, must look at all its alternatives.

"Cook Inlet is an important part of this whole deal," he said. "But frankly, there are other big decisions that have to play out that will influence how to do all this."

Alternative routes for a pipeline will be studied until one idea surfaces as the obvious best choice, he said. The authority's job at this point is to "get into scoring position" to make a pipeline proposal, he said.

The development authority was created by voter initiative that resulted in the Natural Gas Development Authority Act of 2002. Beyond investigating pipeline feasibility, ANGDA also would build, own and operate the line. Supporters of the idea have said the authority would not require the same level of profitability nor face the tax environment that a private industry development would. That advantage might result in gas being brought to foreign and domestic markets more quickly, supporters said.