ALASKA'S NEWSPAPER

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| Updated: 2:56 AM

Our view: Gas line realities

It's big and complex -- but that doesn't mean it's a pipe dream

On Tuesday, Sen. Lisa Murkowski asked Larry Persily, the president's nominee to be federal coordinator of the Alaska gas line project, how he would apply his knowledge of oil and gas through a "federal lens." "I just deal in reality," Persily said. "I don't do vision statements very well."

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Full disclosure: Persily was editorial page editor at the Daily News for about a year and a half. We can testify to his realism.

In his testimony before the Senate Energy Committee, Persily outlined the enormous size of the undertaking and its complexity. He didn't skip over any of the realities -- like the fact that a gas line from the North Slope to Alberta will require five times the steel used to build the trans-Alaska oil pipeline, or that the producers must commit to ship gas on such a line for 20 to 25 years, and that U.S. state and federal and Canadian provincial and federal permits must be satisfied and coordinated.

That complexity, and increasing estimates for the total cost of construction, means the companies involved have to do their homework in agonizing detail -- and at a pace Alaskans find glacial.

It's understandable that Alaskans wonder if the gas line will ever be built. Will shale gas and other competing projects keep our gas in the ground?

Persily, a longtime Alaskan who has spent much of the last 10 years immersed in oil and gas issues, offered some realistic encouragement along with his review of the daunting nature of the project.

When Sen. Jeff Bingaman of New Mexico asked if Alaska gas can be competitive, Persily said yes -- provided there's soon a project approved and under way. If markets know Alaska gas is coming, we should be able to sell it. And demand is expected to keep rising, both in the U.S. and abroad.

He pointed out that while transportation costs are higher for Alaska gas than for shale gas projects in the Lower 48, our production costs are lower.

And that production already is happening on the North Slope, where the natural gas is now reinjected back into the ground to increase oil production.

Persily also was realistic in saying that the separate gas line projects now in play -- the partnership of TransCanada and Exxon and the BP-Conoco Denali project -- will eventually become one project.

The gas line is no lock. Plenty of variables are in play. But Alaska has a vast store of clean-burning fuel, and four world-class companies operating here that know how to produce it and get it to market.

The realist told the senators, "I believe we're closer." That's encouraging.

BOTTOM LINE: Gas line challenge now is to cover the distance between dream and reality.

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