August 23: Fairbanks Daily News-Miner on gas pipeline economics:

Posted: Monday, August 28, 2000

The economics look best, we're told by the industry, for developing North Slope natural gas by means of an Arctic pipeline extending offshore from the Arctic National Wildlife Refuge to the MacKenzie River Delta.

That approach holds greater profit-making potential for the private gas owners involved because the Delta's considerable gas deposits could also be marketed through the resulting pipeline to the Lower 48, yielding greater bang for each dollar invested in the project.

If such decisions were solely left to industry, an offshore gas line is surely what Alaska would get, following years of predictable legal hassles over the permits.

Lost for all time would be the Alaska employment and energy benefits flowing from construction of an Interior gas pipeline.

Fortunately, state officials in Washington, D.C., and now, Juneau are rising to place the interests of Alaskans first.

''As long as I am in the Senate I will oppose taking Alaska's gas out of Alaska following the Arctic Alaska route,'' Sen. Ted Stevens declared last week. ''That route would deny Alaskans access to the largest deposit of natural gas ... on the continent. It should come down the oil pipeline right of way and follow the Alaska Highway into Canada.''

Sen. Frank Murkowski offered a similar assessment here Monday.

''I think it has to come down through Alaska,'' said Murkowski, observing that the Interior route makes sense given the presence of the existing oil pipeline corridor, required permits and a ready market for gas in the Midwest. ''That's probably the most important factor,'' the senator said of developing Lower 48 market for clean-burning natural gas.

Gov. Tony Knowles took a similar stand Tuesday as he briefed Fairbanks business leaders on the three principles his administration will apply seeking development of North Slope gas.

--Alaska hire;

--Alaska access to gas, and

--A fair Alaska share in the profits.

While Knowles left room for several alternative approaches toward gas commercialization, he signaled that simply exporting the resource isn't acceptable. ''Any gas project must benefit Alaska communities by providing gas for affordable, in-state energy needs,'' the governor said.

''It's unacceptable for us to fuel America, or the world, while Alaskans freeze in the dark,'' he added, only slightly exaggerating the stakes.

The state has waited decades for the opportunity created by surging natural gas prices in the Lower 48.

It may not pencil out as industry's favorite, but a natural gas pipeline routed through the Interior, and built and operated by Fairbanks-based workers, is the obvious choice for all Alaskans interested in collecting reasonable return from this nonrenewable resource.


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