Palin's signing of bill a step in right direction

Posted: Sunday, August 26, 2007

There's a light at the end of the tun-

nel for Agrium USA and its Blue Sky coal gasification project, and as it turns out, it's a train.

More specifically, it's the Alaska Railroad Corp. Gov. Sarah Palin paid a visit to Kenai on Saturday to sign House Bill 229, a measure sponsored by Rep. Mike Chenault, R-Nikiski, that permits the railroad corporation to participate in building facilities necessary to transport coal from Healy to the northern Kenai Peninsula. The bill also allows the railroad to financially back facilities and equipment for the coal gasification and power plant by issuing up to $2.9 billion in bonds.

Putting together a project on such a large scale requires a team approach and cooperation between government and industry. Homer Electric Association already is on board, lending its expertise in power generation. With the Usibelli Coal Mine in Healy the likely source of coal for the plant, the railroad corporation is a good player to add to the team.

The benefits of the coal gasification project extend well beyond Agrium's North Kenai plant. In addition to supplying power and feedstock gas for the facility's urea and ammonia operations for generations to come, Blue Sky means jobs for hundreds of Alaskans. Plant construction and, following that, plant operations, will employ hundreds of workers here on the Kenai Peninsula. Statewide, the project means jobs for coal miners in Healy, transportation industry workers to haul the coal, and additional construction workers to build a spur line and shipping facilities Port MacKenzie.

The power plant associated with the project means an additional source of energy and available at competitive prices for HEA and its members. The excess carbon dioxide from the coal gasification process could benefit Cook Inlet oil producers as a means to enhance oil recovery from wells.

This is not a small project. In fact, if undertaken as envisioned, it will be second only to the pipeline in scope.

Big projects require plenty of resources natural, human and financial.

Lisa Parker, corporate relations representative for Agrium, called the railroad corporation's participation "a cornerstone."

"It is one of the pieces that we need in this project," she said.

The bill does not compel the railroad corporation to participate in the project, but it gives Agrium options for proceeding with a project that has been on the drawing board for several years.

"At this point, it's an option, a viable option, that's out there if Agrium and those involved in the gasification project decide to move forward, it gives them a funding mechanism," Chenault said. "It also gives the railroad the contracts and the ability to haul coal from Healy to the peninsula."

A final decision on whether to proceed with Blue Sky is still a ways down the road. Parker said that while Agrium still is working toward it, the project still is in the planning phases. Though each phase of planning gets more detailed and costlier decisions still can be made that would halt the project.

Passage and signing of HB 229 keeps the project moving forward and is good news for the Kenai Peninsula. We hope Blue Sky continues to be a source of good news and energy in the future.

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