Alaskans are apprehensive about getting a natural gas pipeline built from the North Slope.

They should be, but we also should remain hopeful.

Huge new deposits of shale gas are being discovered in the Lower 48 that could take our market. The outlook isn't much better for liquefied natural gas, or LNG, which is seen as an alternative to an all-land Alaska pipeline. The world is awash in LNG, with large new plants coming on line in Asia and the Middle East.

Meanwhile, two Alaska-pipeline consortiums are hard at work on engineering and cost estimates for "open seasons" both groups plan next year. Open seasons are when pipeline developers solicit customers for their projects. The customers have to be ready to sign checks, so this is where the rubber meets the road.

One pipeline group is led by TransCanada Corp., with Exxon Mobil Corp. as a partner in the engineering but not yet in the project. The second group is the Denali consortium of BP and Conoco Phillips.

Both TransCanada and Denali, who are competitors, are optimistic they can overcome obstacles and make this project work. So are Gov. Sean Parnell and other state officials.

But for everyone else, it seems, pessimism prevails mainly because of the Lower 48 shale-gas boom.

Mark Myers, former director of the U.S. Geological Survey who now works with the state, said he believes the threat from shale gas is overstated. Myers is a geologist, and he believes shale gas has technical issues that will limit its growth. He also sees future land- and water-use conflicts -- to keep up the gas flow, shale-gas needs lots of drilling and lots of water to fracture the rock underground.

The big unknown is whether Alaska gas can be delivered at a competitive cost. That's why the engineering and cost estimating under way is so important.

North Slope gas producers face huge decisions when next year's open seasons come: They will have to make guarantees of well over $100 billion in binding commitments.

Companies like Exxon, BP, Conoco and Chevron, which all own substantial amounts of North Slope gas, make gutsy long-term decisions regularly, but this one is a whopper. Once the checks are written, there's no turning back.

All parties now are saying "conditional" bids for pipeline capacity can be expected next year, which means the pipeline project won't have enough capacity subscribed to move ahead immediately.

Alaska has a lot riding on this. First, the perception that the big project is progressing, or not, will affect business confidence.

That's because people know the flow through the trans-Alaska oil pipeline is falling and by 2018 it might be difficult to keep the oil pipeline going. The gas pipeline would stimulate exploration for gas and oil. It would help sustain our petroleum industry for decades.

We should all wish Shell Oil luck in exploring the Arctic offshore because discoveries there could also help sustain our oil pipeline.

Meanwhile, Alaskans can do some things to help the gas pipeline. First is to recognize that the pipeline companies and the producers are our partners. The time for adversarial politics is past.

Second, everyone agrees an agreement on state gas tax and other financial terms is needed. The project doesn't need a tax break but rather agreement that taxes won't change for a period, the duration of which has to be negotiated.

Third, if the goal is also to bring TransCanada, Exxon, BP and Conoco together into one consortium, tweaks to the state's Alaska Gasline Inducement Act of 2007 are needed. AGIA now covers only TransCanada because the pipeline company agreed to accept the state's terms in that law in return for a $500 million state subsidy.

Exxon says it needs changes to AGIA as well as the fiscal agreement before it comes fully on board.

Gov. Sean Parnell says any changes need to be justified. The governor is being prudent. It's proper to wait until we have pipeline cost estimates so we can judge the project's economics. But let's get prepared for the discussion. The Legislature should hold hearings next spring to reacquaint lawmakers, and the public, on AGIA and tax issues. What we don't need now is political grandstanding and industry-bashing from one side or bashing of the state's AGIA strategy from the other.

We need to move on. There's too little time and too much at stake.

Tim Bradner writes for an Alaska economic reporting service. He also consults for private clients and writes for business publications. His opinion column appears every fourth Sunday.

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