Lots of complicated issues face state's natural gas authority

Posted: Sunday, October 19, 2003

As the adage goes, "Nothing ventured, nothing gained."

Kenai Peninsula Borough officials are doing their jobs by suggesting a proposed natural gas pipeline from the North Slope should terminate at Cook Inlet.

There's a lot of logic behind the borough's suggestion:

There's a trained work force in place in Cook Inlet.

There is an existing liquefied natural gas infrastructure that can be expanded.

There's a substantial existing support industry infrastructure.

The borough also makes a good argument that bringing the pipeline to Cook Inlet will "maximize jobs for Alaskans, revenues for the Alaska treasury and access to gas for Alaskans."

Plus, it's worth remembering that with the discovery of the Swanson River Field in 1957, the Kenai Peninsula Borough became the birthplace of the oil and gas industry in Alaska. In the 46 years since then, the borough-based oil and gas industry has matured and lots of lessons have been learned.

It is a credit to how the oil and gas industry operates within the borough that delegations from all over most recently British Columbia and Russia visit here to find out how the industry operates. The visitors want to know how to develop their resources, how to protect their environment, how competing interests work together for the good of the community and how the oil and gas industry establishes itself as a good neighbor. It's no small thing that they look to the Kenai Peninsula Borough for that information.

Unfortunately, the borough's position that Cook Inlet would make a better terminus for the gas pipeline than Prince William Sound has a few flaws.

For one, the Alaska Natural Gas Development Authority is specifically charged with examining a Prudhoe Bay to Prince William Sound route with a Glennallen-to-Southcentral spur.

The authority on its own accord can't expand the scope of its mission. The Alaska Legislature would have to take action to broaden the authority's mandate.

For another, a 1988 U.S. Department of Interior environmental impact statement rejected what the borough is proposing. To have a Cook Inlet terminus, the process would have to start all over again. That's a process that some believe could delay a gas pipeline project for years, maybe even kill it.

And for another, Yukon Pacific Corp. currently holds all the major necessary permits for the Prudhoe-to-Prince William Sound route and has done engineering studies on the pipeline and liquefaction plant.

The borough, of course, has some ideas to overcome those hurdles.

The Legislature could take action to expand the authority's mandate. In order to address the many questions surrounding the pipeline, that's a sound suggestion one Kenai Peninsula legislators should follow through on when the session begins in January.

The borough also makes some thoughtful comments regarding the 1988 environmental impact statement.

"That 1988 EIS was developed for a specific project with specific parameters, not necessarily parameters in play for a project to be developed now," Bill Popp, the borough's liaison to the oil and gas industry, told the Clarion recently.

Does a 15-year-old EIS automatically apply, no questions asked? Not likely. Alaskans likely would want all options to be fully reviewed and discussed.

It seems prudent that all costs be on the table, including the cost of the spur line, so that the best decision can be made. One thing is for certain: The cost of such a massive project is not going to go down.

While the Kenai Peninsula Borough has raised important issues that deserve consideration, the gas pipeline is of such great importance to all of Alaska that it should not become mired in debates that could derail the project.

The primary question remains: What is the quickest, most cost-efficient, environmentally sound way to get North Slope gas to market in a way that provides the maximum benefits to Alaskans?

The Alaska Natural Gas Authority board of directors has its work cut out.

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