Study questions need for gas development authority

The report from legislative auditors suggests lawmakers evaluate the continued need for the Alaska Natural Gas Development Authority and end it, if it serves no public-interest purpose.

Alaska voters approved forming the gas authority in a 2002 ballot initiative.

The agency’s legal purpose is to acquire and condition North Slope natural gas; design, build and operate a gas pipeline from the North Slope; and get some of that gas to Southcentral Alaskans.

But ANGDA has veered from that purpose as others have taken the lead in pushing for a North Slope gas pipeline, the auditors said in their 97-page report.

At various times since its creation, the gas authority has focused on a spur pipeline project to Southcentral from a main North Slope pipeline, an idea to pull propane from North Slope gas for distribution to Alaskans, an idea to build a pipeline to ship gas north from Cook Inlet to Fairbanks, and bidding for room in the multibillion-dollar gas pipelines now being pursued by TransCanada Corp., BP and Conoco Phillips, the auditors said.

On these four ideas, ANGDA issued:

• 39 contracts totaling $2.3 million to consultants and others for a Glennallen-to-Palmer spur line.

• 16 contracts totaling $676,000 for the propane idea.

• 25 contracts totaling $3.6 million for a Cook Inlet-to-Fairbanks pipeline.

• Eight contracts totaling $452,000 for bidding, with five Alaska electric companies, for space in the proposed big North Slope pipelines during those projects’ open seasons this year.

In all, the Legislature has given ANGDA $17.9 million for capital projects since 2003, plus $2.1 million for the agency’s office operations, the auditors said.

ANGDA is now “a support agency rather than a lead agency in the development of an in-state pipeline,” the auditors said.

“Public entities should not outlast their public purpose. Sunset laws enacted throughout the nation ensure public entities do not continue in perpetuity,” they said.

“ANGDA is not subject to sunset provisions. Consequently, it is at risk of outlasting its public purpose,” the auditors said. If the gas authority no longer has a significant or unique role after the open seasons conclude, the Legislature should consider shutting it down.

“ANGDA’s continued existence without a significant role is a waste of state resources and dilutes crucial decisionmaking in the State’s effort to bring NS gas to market,” the auditors said.

In response to seeing a draft of the audit, ANGDA chairman Scott Heyworth wrote to the auditors last month.

“ANGDA has and continues to play multiple roles in helping get North Slope gas to market to assure that Alaskans receive the maximum benefit from the State’s efforts to provide energy security,” Heyworth wrote.

“ANGDA remains the only organization that consistently measures alternative opportunities in terms of the consumer’s monthly energy bill.”