AGIA ideas

Frontiersman

PALMER — Gov. Sarah Palin is sending her gasline team on the road, and Monday it made its first stop at the Palmer Train Depot.

In two and a half hours, including a presentation and a question-and-answer period, six team members spoke to a full house of mostly Mat-Su Valley residents. They came to hear details about the Alaska Gasline Inducement Act — AGIA — and Trans-Canada Alaska Co. LLC’s proposal to build a natural gas pipeline from the North Slope into Canada.

“We had a very good turnout,” said staff assistant Joe Balash, a member of the gasline team. “People are clearly paying attention. I think it’s fair to say Alaskans know more about gas pipelines than we did four, five, six years ago.”

The biggest applause during the question-and-answer period came for two audience members who made statements in favor of the AGIA.

“God bless you,” a man in the front row said. “You’ve brought something out of Juneau we can be proud of.”

Another attendee near the back of the room elicited applause later for commending the Palin administration for keeping AGIA and the public process behind it in statewide newspapers and fresh in people’s minds.

“It’s been a drain on your personal lives. Thank you,” he said.

AGIA, passed by the Legislature last May, is, as state Revenue Commissioner Pat Galvin explained it, a means by which the state has worked with pipeline companies through a competitive process to push them through the initial stages of building a pipeline. Only one company, TransCanada, submitted a bid judged to be complete. Trans-Canada would build a line running from the North Slope to Alberta, Canada, with gas to begin flowing in 2017.

Galvin stressed the state is only obligated to pay $500 million in matching funds if TransCanada agrees to move ahead with a feasible gasline.

AGIA, he said, aims to get the pipeline company to a stage called “open season,” wherein natural gas producers are invited to make commitments for gas to be sent through the line. Some audience members wondered what would happen if Trans-Canada solicited offers and received none and the open season failed.

“We’ll have to find out why, why didn’t they put their gas in the line,” Galvin said.

At that point in the process, the state would better understand the economics at play and be able to figure out where the stumbling block is, Galvin said.

Kurt Gibson, deputy director of the state Division of Oil and Gas, said the state could take a hard look at the producers’ reticence. Maybe they don’t jump on board because the project isn’t economically viable to them.

“Is there something the state can do to put them over the lip on the funnel, or is it simply a game of chicken?” Gibson said, wherein producers are waiting for the state to fold.

A number of audience members expressed concern about the gas going into Canada. One resident asked about security in Canada near pipeline equipment and “stuff you’ve got to watch where somebody might want to blow it up.”

Balash said Homeland Security is one of the organizations from which the state is seeking input and pointed out the line will run underground and be a less-tempting target for terrorism than an above-ground pipe.

Another asked about the possibility that two-thirds of the pipeline will run through Canada, where labor laws put limits on how many Americans can work and in what capacity.

“Two-thirds of the jobs now and forever are going to be Canadian jobs,” he said.

Balash said there are plans for a spur line to run hundreds of miles off the mainline that will produce jobs for Alaska residents

Natural Resources Commissioner Tom Irwin said natural gas reserves are huge and their development will spark the state’s economy. If the government doesn’t get a gasline project moving, “We won’t get that developed in the order we want it,” Irwin said.

Balash said after the meeting that, from here, the team will split into three groups. His will go to Kotzebue and Nome, then take the weekend off and hit the Interior next week. Other teams will visit other areas of the state.

Contact Andrew Wellner at andrew.wellner@frontiersman.com or 352-2270.