Petition filed for Valdez pipeline

Posted: Tuesday, August 07, 2001

JUNEAU -- They don't have the money or the gas, but a grass-roots group has begun a drive to build a natural gas pipeline from the North Slope to Valdez.

Citizens for the All-Alaskan Gasline Initiative is attempting to get an initiative on the 2002 General Election ballot creating a governmental body that would oversee the 800-mile pipeline to Valdez, estimated to cost $7.3 billion.

''I believe it is economically viable,'' said Scott Heyworth, who chairs the group.

If approved by voters, the newly created Alaska Natural Gas Development Authority would search for markets to sell liquid natural gas in Asia and the United States at the same time that it searches for funding to construct the pipeline, Heyworth said.

One scenario would see the state invest about $912 million along with other investors and that would be combined with bonds to build the pipeline, Heyworth said. The group also would have to negotiate with the three major oil companies in Alaska for the sale of the gas, he said.

The proposal is similar to a bill filed in the state Senate late last session by Sen. Robin Taylor, R-Wrangell. However, SB 221 would give the state power of eminent domain should oil companies refuse to negotiate with the state on a sale of natural gas.

Curtis Thayer, spokesman for a consortium of oil companies studying a pipeline route to the Lower 48, said the idea of a Valdez route has been considered by other groups in years past.

''For 20 years, the economics haven't worked out. I don't know what a state-created agency will do to create a market,'' said Thayer, of the Alaska Natural Gas Pipeline Team representing Phillips, BP Exploration (Alaska) Inc. and ExxonMobil Corp.

That group is currently considering only two routes to get natural gas from Prudhoe Bay to existing pipelines to the Lower 48, Thayer said.

One proposal calls for a 2,000-mile pipeline to Alberta which generally follows the Alaska Highway. The other would carry gas through an offshore pipeline to Canada's Mackenzie Delta where the pipeline would head south to Alberta.

The pipeline is estimated to cost between $15 billion and $20 billion, Thayer said.

Though less expensive, Thayer said he doubts the Valdez route would be able to sell natural gas to American companies since there is no processing plant on the East Coast that could receive the gas.

Lt. Gov. Fran Ulmer must approve the content of the initiative before the group attempts to gather the 28,782 necessary signatures on a petition. The group must submit the petition before Jan. 14 to get it on the Nov. 2002 General Election ballot.

Gov. Tony Knowles supports the ''Alaska Highway'' route and signed into law a bill barring leases across state land for a gas line to follow the so-called ''over-the-top'' route to the Mackenzie Delta.

Bob King, Knowles' press secretary, said the governor does not oppose a Valdez route. But initial funding and questions about whether the Valdez route can get natural gas to outside markets cheaply remain unanswered, King said.

''The people of Alaska have a big stake in it and are going to want to ask a bunch of very tough questions before voting to limit their options on how to develop this resource,'' King said.

Heyworth said that will be the job of the development authority.

''Sure those are tough questions that need to be answered. But that would be the charge of this authority, to get those answers,'' Heyworth said.

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On the Net:

The All-Alaska Gasline Initiative: http://www.alaskagaspipeline.org/



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