Thursday, May 04, 2006

DOA: The All-Alaskan Gas Pipeline

Top 10 reasons for an Alaska gas line

• Sun. Dec. 14, 2003

By Representative Eric Croft

December 14, 2003

10. LET'S MAKE DECISIONS FOR OURSELVES FOR A CHANGE. I was born in Anchorage in 1964. For all of my life, we have waited for Outsiders to make decisions for us. We waited for Congress to act: on statehood, on the oil pipeline, on ANILCA and, most recently, on the gas line. We constantly wait for the courts to rule on lawsuits affecting our environment, or jobs, our future. Now we are waiting for corporate boards in Texas or London to decide when to develop our gas. It is time we decided our own future.

9. DO YOU OWN OR RENT YOUR HOUSE? Even if you rent now, do you want to own a house someday? Why? I believe Alaska should not be a tenant. We should build our equity, investing in ourselves. Wally Hickel has it right: We need to be an owner state.

8. BOB BARTLETT WAS RIGHT. Former U.S. Sen. Bob Bartlett, a miner and strong supporter of resource development, warned the Alaska Constitutional Convention that there were two risks to letting Outside corporations control our natural resources: One, they might develop irresponsibly, giving us none of the profits and all the mess and, two, they might warehouse our resources because they want to develop their other global resources first. Both hurt Alaska and Alaskans.

7. THE HIGHWAY ROUTE IS DEAD. It has been dead ever since the Bush administration announced its opposition to the price floor guarantee paid for by U.S. taxpayers. The congressional subcommittee vote, with all six Democrats in favor and all seven Republicans opposed, merely sealed the coffin.

6. ECONOMIC DEVELOPMENT. When we try to attract new businesses to this state, they all ask the same questions. Do we have a good, educated work force; a cheap, reliable source of power; and a stable, reasonable tax structure? When we tell them that our workers are great but we are running out of gas with no plans to fill the void and no fiscal plan to pay for state services, they say "sayonara." Who can blame them? Nobody would move a business to a state that may run out of power and where the entire tax burden may suddenly fall on your business when politicians realize they are out of money.

5. NO NEW TAXES. Which brings me to the best-kept secret in politics today. Building and owning a gas line provides hundreds of millions of dollars to fill the fiscal gap. It brings in more than either an income or a sales tax and, under very reasonable estimates of future natural gas prices, can bring in more than both combined. Why would anyone want to pay taxes before developing our resources?

4. GROW THE PERMANENT FUND. All politicians say they will protect the dividend, but you and I both know most are itching to get their hands on it. I have tried to protect the dividend, but there is little chance the Legislature will allow a vote. Building the gas line would put new money in the Permanent Fund instead of taking money out of it.

3. JOBS, JOBS, JOBS. Give me just one more boom. I promise I won't blow it. Building a gas line will create an economic boom fueled by high-paying construction jobs. More importantly, the operation of the line will provide good jobs for years to come.

2. PATRIOTISM. Let's take a one-question, multiple-choice test. "The United States is currently too reliant on foreign sources of oil and gas. In the coming decades, Americans will need a large amount of natural gas to heat their homes and run their businesses. Would it be best for the United States to buy it from (a) the Middle East (b) Indonesia (c) Russia (d) Alaska?"

1. IT IS A COLD, LONG WINTER. Southcentral Alaska is running out of natural gas, with current reserves to be exhausted in about 10 years. We will look globally, monumentally, completely stupid if we don't have the natural gas to heat our homes when we own one of the largest natural gas supplies in the world.

Representative Eric Croft

Today in the Anchorage Daily News.......................

Bad news for LNG


Although many Alaskans believe in a liquefied natural gas project -- the so-called all-Alaska line from the North Slope to Valdez -- their dream is in trouble.

At least so says a consultant to the state Department of Revenue.

The consultant says it's unlikely any of the proposed U.S. or Canadian West Coast LNG receiving terminals will be built, contrary to reports from advocates of the Alaska project. The consultants, in their study released last month, rated the likelihood of construction of any of the terminals in the next decade at poor to negligible, based on environmental, community, permitting, financing and market issues.

And even if there is a terminal to accept Alaska LNG, moving the gas by an expensive combination of tankers and pipelines to limited markets would greatly reduce the value of the gas to the producers and the state for tax and royalty payments.

The state hired PFC Energy, an international oil and gas consultant to governments and companies worldwide, to assess the Alaska Gasline Port Authority's proposed LNG project. The port authority, a municipal entity led by the Fairbanks North Star Borough and the city of Valdez, wants to build a pipeline to Valdez, where the gas would be supercooled and liquefied, then loaded aboard tankers bound for West Coast terminals.

The LNG would be warmed and turned back into gas at the terminals, then shipped by pipe to market, primarily on the West Coast.

That's a lot more processing than simply sending the gas by pipe directly from the North Slope to Lower 48 consumers, the consultants noted. In addition, the expensive U.S.-built and -operated tankers, required by the protectionist Jones Act, would add a lot to the bill, PFC Energy says.


What will Eric Croft's response be? What will Mike Doogan's response be? What will the Democrat's response be?

The spur to Anchorage is still in play as it is viable, but it will not be the main project.

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