Valdez city officials hold natural gas summit

Posted: Sunday, June 29, 2003

VALDEZ (AP) In an effort to sort out his options in getting Alaska's natural gas to market, Gov. Frank Murkowski huddled with gas experts from Asia and the Lower 48 in a four-hour session in Valdez on Saturday.

The focus was on how to market North Slope natural gas in the face of competing interests, conflicting studies and differing points of view.

Hosted by the city of Valdez at a cost of $75,000 to bring the experts together, the meeting saw Japanese and Korean interests making their case for Alaska's gas along with experts from the California Energy Commission, Sempra Energy, the holding company for San Diego Power & Light.

California is now facing a genuine energy shortage after being battered by huge financial losses in a contrived energy crisis in the early 1990s, said Jim Boyd, the chairman of the California Energy Commission.

One point all the participants did agree on: the window of opportunity for marketing Alaska natural gas to South Korea, Japan, Taiwan and to California is now open. ''But that window will shut,'' if Alaska does not act with haste, warned Valdez city attorney Bill Walker at the close of the session.

Whichever way the gas gets to market, the stakes are high.

The U.S. Minerals Management Service estimates Alaska natural gas known reserves at 27 trillion cubic feet. That's about 16 percent of the U.S. reserves, equal to 4.6 billion barrels of oil and valued at $130 billion.

With Lower 48 and Pacific Rim nations predicting energy shortages ahead, the governor is being pummeled by competing interests. They include the oil majors that own the gas, gas supply companies and now, two competing public agencies that are in conflict over how to achieve the end goal.

On one hand is the Alaska Gas Port Authority, formed three years ago by Valdez, the Fairbanks North Star Borough and the North Slope Borough. On the other is the Alaska Gas Development Authority, approved by a statewide vote last fall.

The state authority is calling for a single line from the North Slope to Valdez where the gas would be converted to liquid natural gas for shipment overseas by tankers.

The Valdez-led group, on the other hand, is proposing a Y-line that would see the main gasline head into Canada where it would link up with existing Canadian lines for shipment to the northeastern United States. From that main line, a spur would come to Valdez.

U.S. Senators Ted Stevens and Lisa Murkowski attended Saturday's meeting.

''This has been a worthwhile session,'' the governor said after the meeting. ''We have two significant methodologies under way. Many complexities have been outlined here. We have our work cut out for us.''

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