State readies to take applications for gas construction

July 6, 2007

By Hannah Guillaume

Frontiersman

ANCHORAGE - Oil companies looking to build Alaska's gasline can apply now.

Gov. Sarah Palin spoke with her gasline team leaders Tuesday in Anchorage about releasing the Request for Applications as authorized by the 2007 Alaska Gasline Inducement Act.

&#8220We want to make sure that Alaskans know where we are, and we are on time,” she said.

The Request for Applications is the first step of the Inducement Act's six primary goals, including getting Alaskans job training related to the natural gas pipeline, making those jobs available to residents, making gas available to Alaskans and ensuring the North Slope basin is open to long-term gas exploration.

Other steps include ensuring quick construction and reasonable tariff rates to transport the natural gas to market, according to the Inducement Act.

Marty Rutherford, Alaska deputy commissioner for the Department of Natural Resources, said she spent several months in a windowless room in Prudhoe Bay with her colleagues preparing for the application request release.

She said the competitive process starts with publication of theRequest for Application. &#8220We feel very good about the document,” she said.

Rutherford said gasline construction applicants not responsive to the 20 must-haves of the Inducement Act will be rejected. Applicants can propose to continue building the pipeline through Canada or Alaska.

Whether the current big three Alaska oil producers - Exxon Mobile, BP and ConocoPhillips - will apply remains unclear.

Palin said there are multiple other companies that could build the gasline and said she wants the construction process to be transparent and competitive.

The state reached out to advise several new parties, including Spectrum and Energy Transfer Partners, in the U.S. about the Inducement Act's application process and thinks it created a buzz in the marketplace, Rutherford said.

&#8220I believe they, too, know how important it is for our nation,” she said. &#8220We are a good place to do business.”

The application process provides for a single company to put in more than one proposal, she said, adding that one good proposal is all that's needed to license construction. Any proposals approved by the commissioners of the Department of Natural Resources and the Department of Revenue will need legislative approval within 30 days.

Patrick Galvin, commissioner for the Department of Revenue, said even if all proposals ask for negotiations to the Inducement Act, the Legislature cannot be asked to consider it.

&#8220At this time, we remain absolutely committed to the (Inducement Act) process,” he said.

Rutherford said before issuing a written determination, commissioners will release completed applications, excluding trade secrets and proprietary information, to the public and take comments for 60 days. Applicants must respond to the request by Oct. 1. Applications will remain sealed until after the deadline, may be withdrawn and will be opened simultaneously.

Rutherford said if a change is required to the process it could result in the deadline's extension.

Galvin said a special session shouldn't be needed to approve a candidate. Oil tax and gasline construction are seen as a potential conflict, but his department is paying attention.

Contact Hannah Guillaume at 352-2284 or hannahguillaume@yahoo.com.