Persily Gets Senate Hearing

By Libby Casey

President Obama’s choice to lead the Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects faced a handful of Senators in Washington today and assured them an Alaska gas line has a future. 

Larry Persily said at his confirmation hearing before the Senate Energy Committee that an Alaska gas line is viable – despite competition from Lower 48 supplies.

I pledge to devote my energy, my knowledge, and ingenuity to the prospect of a very large and very long steel pipe to bring North Slope natural gas to America’s consumers.

Only a few Senators were on hand for the hearing, including the committee’s top Republican, Senator Lisa Murkowski.  Alaska’s other Senator, Democrat Mark Begich, had recommended Persily to the White House and introduced him to the committee.

Persily started his career in Alaska 30 years ago as a newspaper publisher and reporter, and worked for the Knowles Administration in the Revenue Department and in Governor Palin’s Washington D-C office.  He became an outspoken critic of Palin when she ran for Vice President in 2008.  Persily currently works as an oil and gas aide to Republican Representative Mike Hawker.  Murkowski praised his ability to straddle the aisle.

He’s not one to let partisan pressures stand in the way of building the project.  Larry it’s fair to say will bring some refreshing candor.  We laugh at that, a little politically correct there, But condor is necessary when you have something of this significance and import we’re looking at with this gas line.

Murkowski asked Persily how to tackle the hurdles that have kept a gas line from getting built – despite the fact that it’s been talked about for decades.

Senator I guess what I would bring to it is, I just deal in reality.  I’m not much on process, I don’t do vision statements very well.

MURK: We know what the vision is here.

Right, getting to the end of the line.

We have to look at realities of numbers, the risk the problems involved in this.  Just because we want it won’t make it happen.  So hopefully working with the parties: the state, the Canadian government, and certainly the producers and TransCanada, the ones who will be putting the companies’ value on the line.  And seeing what can be done, where we can indentify road blocks, what can be done to remove them.  See which parties are willing to take risk.  And then with risk comes reward.

The office Persily would lead coordinates all aspects of building a gas line, which would be the largest private sector project ever built in North America.  Last week TransCanada, which hopes to build the line, estimated the project would cost in the range of 32 to 41 billion dollars.  Murkowski pointed out that’s far higher than the 18 billion dollars estimated just six years ago.  She and Democratic Committee Chairman Jeff Bingaman of New Mexico questioned Persily about the risk that Alaska’s gas won’t be needed because of Lower 48 shale deposits.  But Persily says the nation’s need for natural gas is expected to rise, and he pointed out that while transportation costs are higher for Alaska’s gas, the actual production costs will be lower than shale.  He says project developers know they have to be competitive on price.

That’s one of the hurdles they’re working on.  They know a consumer wants natural gas at the burner to, unlike wild salmon where we know people will pay more for wild Alaska salmon, gas is a commodity.  We just have to be competitive in the market on price.

Persily says he believes the two projects currently competing for priority – one by TransCanada and Exxon Mobil and the other by B-P and Conoco Phillips – will eventually merge, creating a deal that will involve all the companies.

The Senate Energy Committee anticipates voting on his nomination next week.  If his name successfully passes out of committee, which it is expected to do, the full Senate still has to confirm him.  Right now Republicans in the Senate are holding-up many of the President’s appointees by refusing to take confirmation votes.


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