The availability of affordable and dependable energy is foremost among the complex issues facing our state and casting uncertainty on our future.
From the individual level, to communities, to small business and big industry, Alaskans need reasonably priced, secure, clean energy not only to survive, but to thrive. This Legislature took a momentous leap forward by passing House Bill 4 creating an independent state corporation to develop pipelines getting gas to Alaskans.
The Alaska Gasline Development Corporation (AGDC) is already working diligently on an instate gas line that, with private sector support, would move North Slope gas into the hands of Alaskans in Fairbanks and Southcentral, and other communities where possible. HB 4 gives AGDC the tools to make a project happen, providing there is sufficient private sector support to underpin financing of roughly $8 billion.
Alaskans know another pipeline project is out there as well -- that being considered by TransCanada, the state's Alaska Gasline Inducement Act licensee, with Exxon Mobil, Conoco and BP. The large-volume export pipeline would bring significant benefits to Alaska beyond instate energy -- but its outlook is mired in uncertainty and relies on those companies' willingness to risk tens of billions of dollars.
What we know is Alaskans can't wait forever, and we need to be ready to take gas development into our own hands.
This Legislature listened to a majority of Alaskans who say an instate gas line is a priority. That's been a dream for decades - along with associated jobs, lower home heating costs, cleaner air, economic opportunity for individuals, communities and industry. We encourage Alaskans to support AGDC as their gas line development company.
AGDC has critical tools to advance an instate gas pipeline and work with the group pursuing an export pipeline. AGDC's crew is talking with state departments to initiate the corporation's transition from a subsidiary of Alaska Housing Finance Corporation to a stand-alone entity. Contracts are in place with experts who will fine-tune engineering and design to strengthen the project going into an open season -- and increase its appeal to serious shippers.
Now that HB 4 has become law:
• AGDC has access to $330 million to support contracts for engineering and design, permitting, commercial models and negotiations and more. Ultimately, the money will carry AGDC through the point of sanction, currently scheduled for 2016. That's when the pipeline developer makes the final "go" or "no go" decision on whether to build the project.
• AGDC can sign confidentiality agreements enabling conversations with potential private sector partners - co-owners, financiers, shippers. To date, few of these sophisticated companies have been willing to share information or plans without guarantees that the sensitive information won't be disclosed to the public.
• The clock starts on transitioning AGDC into its new role as a stand-alone state corporation. Gov. Parnell has 90 days to appoint five public members and two commissioners to the AGDC board. The public members should have expertise in relevant areas - pipeline development, finance and large project management. That experience will help steer AGDC to the project most likely to succeed.
• AGDC can prepare for the filings and hearings that will be part of the Regulatory Commission of Alaska's oversight of an instate natural gas pipeline operating as a contract carrier. The RCA will monitor an open season; make sure rules are followed so the process is fair and open to all interested shippers; evaluate shipping agreements; and issue a certificate allowing the pipeline to be built.
AGDC works for Alaskans - not for industry, not for profit, not for politicians. We ask Alaskans to stand behind the corporation working hard to put Alaska gas to work in our communities. It will take an open season for us to know for sure whether an instate gas pipeline is viable, or if Alaska's hands are truly tied until big industry is ready to build an export pipeline. AGDC will take us through that important open season, so Alaskans can have some certainty about their energy and economic futures.
Speaker of the House Mike Chenault, R-Nikiski, has served in the state House of Representatives since 2001. Mike Hawker, R-Anchorage, has served since 2003. More about the Alaska Gasline Development Corporation is available at www.agdc.us.