Possible Routes for the Bullet

15bullet       9/15/09 donaldson

The Parnell Administration gave legislators today (Tuesday) a comprehensive comparison of possible routes to get a long-lasting supply of natural gas to Anchorage, Fairbanks and points in between.  The forty-three pages of maps,  photos and cost charts was part of a complete analysis due next spring that will fuel debate and decisions on in-state use of the state’s North Slope reserves.   Dave Donaldson reports.

Harry Noah,  the administration’s in-state gas coordinator,  was appointed earlier this year to sort out the ideas and arguments coming from the various agencies and stakeholders in an in-state natural gas project to pipe natural gas to the Railbelt.  He’s put together a management and engineering team and kept legislators up-to-date on their findings.  The in-state project is only a back-up to be used if what’s called The Big Project –the gasline through Canada to North American markets — falls apart.

The latest study – sorting out the possible routes and alternatives that a gas line could take – is only a

small part of the information that policy-makers will have to consider if an affirmative step is taken.   He said the bottom line is getting a price that consumers will pay and shippers will sell for.  He said it’s a dance.

#15bullet1                           :25           So it comes down to the cost of the conveyance of this pipeline.  And there’s only two ways to drive that cost down.  Either you increase the volume or the state participates in it.  And those will all be your decisions.  We’re basically the mechanics trying to lay out a project and to see if we can tee up a project that’s economically viable and can work.  My sense is that we can.

The general driving force of the development – which would be turned over to a private owner/operator – is to have gas flowing in Anchorage and Fairbanks by 2015.   To get there the state has to start getting permits now – starting with the Army Corps of Engineers next month.  Noah’s team has to finish its feasibility study in June. The owner would be need to be chosen in early 2011.

Anchorage Democrat Les Gara said the Canadian line would be cheaper, but there’s a risk the state might not get it. He asked when the decision is due to proceed with the plan that Noah’s putting together.

#15bullet2                           :13           This whole thing is really a chicken and egg, right?  If we knew we had the big pipeline going we wouldn’t be doing this.  If we knew if we would be getting cheaper Cook Inlet gas we wouldn’t be doing this.  It’s obviously frustrating and complex.

Noah agrees.  There are too many factors at play that are not under the state’s control.  He says the best thing that lawmakers and the administration can do is put A project on a schedule.

#15bullet3                           :28           And every three months look over and say Are we drilling in Cook Inlet, is somebody actually finding some gas. Or is The Big Line, is anything changed or are we really on a schedule.  And be prepared to slow down.  But if the only thing you can do is this, put it on a schedule and constantly analyze what’s happening around you.  Cause everything else is out of your control.

The study of the in-state route favors using the Parks Highway as a reference rather than the Richardson Highway.  It’s ninety two miles shorter, nearly a half-Billion dollars less expensive.  And, with the military and utilities in the area, it would use more of the gas along the way.  Noah points out, though, that he will not make a decision, legislators and the governor will make the choice based on all the other studies that will come out between now and June.

Imdd

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