Murkowski touts Asia as market for North Slope natural gas

Shale production sours market in Lower 48, senator contends.

Associated PressAugust 15, 2012 

Alaska for years has envisioned a multi-billion dollar pipeline that could carry North Slope natural gas through Canada to Lower 48 customers, but the best hope for a market may be Japan or other Asian countries, U.S. Sen. Lisa Murkowski said Wednesday, joining a chorus of officials who have been urging the same idea.

"I believe this is where our opportunity is," the Alaska Republican told Commonwealth North, a non-partisan public policy forum.

Legislation promoting a pipeline that would hook into the Canada pipeline network, which included a provision to award an incentive of up to $500 million to a company advancing the project, was a hallmark of the administration of former Gov. Sarah Palin. TransCanada Corp. in 2008 was awarded an exclusive contract to advance a pipeline.

The explosion of shale gas production, however, likely closes off that opportunity, Murkowski said.

"Ladies and gentlemen, I think that day is gone," she said.

Alaska should instead look to its past, she said. Companies in the state for 40 years have captured Cook Inlet natural gas and shipped it in liquid form to Japan from a plant at Nikiski.

"It's actually the longest-term export contract in the country," Murkowski said.

Japan, she said, is looking to Australia and Lower 48 states for natural gas supplies and Alaska could fill a void created when the country took nuclear power offline in the aftermath of the 2011 tsunami, she said. Having an established relationship could help, she said.

One hurdle, she said, could be political opposition.

"We're going to have a fight this coming year in the Senate about whether or not we should have provisions that restrict the export of America's natural gas," Murkowski said.

There's concern that exporting Alaska natural gas would boost prices elsewhere in the country. Murkowski will make the pitch that Alaska's natural gas is different than Lower 48 gas.

"It's a different market. It is different entirely and it needs to be viewed as such," she said.

Lining up a customer, whether it's Japan, South Korea or another Asia market, is important for energy needs within Alaska, where prices are high and natural gas is not available to much of the state.

"It allows us the opportunity to develop and build out the infrastructure, the assets, that we need, that will not only help with the export but will help us as Alaskans meeting our own energy needs," she said. "That has to be part of the equation as well. We just can't provide for everyone else without taking care of our own energy needs here."

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