The development venture will unlock the natural gas potential in Alaska through the synergy that exists among ENSTAR, ANGDA, and the State, the Governor said. ENSTAR is a proven operator; ANGDA can provide public financing; and the State of Alaska has the ability to expedite the project and potentially to ensure lower transportation rates (or tariffs) on an in-state pipeline.
"While we have publicly been focusing our efforts on AGIA and our overland gas route to Canada and the Lower 48, we have also been working on an in-state gasline that can swiftly address the needs of Interior and Southcentral Alaskans while we continue our progress on AGIA," Palin said.
"It is time to bring together the tremendous resources we have in this state to build an in-state gasline that delivers an affordable and reliable supply of natural gas to Southcentral and Interior Alaskans, targeting delivery within the next five years. This project will also be designed to spur exploration and development of new natural gas resources within the Cook Inlet and Copper River basins, and provide a long-term supply of natural gas for Southcentral and Interior Alaska."
The in-state gas pipeline project could move approximately 460 million cubic feet of gas per day (mmcf/d), about twice Alaskans' current daily gas use, and could see gas flowing as early as 2013 to residential and commercial customers.
"This development venture is about moving forward with the energy and spirit of Alaskans to provide energy relief for Alaskans," said Palin. "There is no greater priority for me at this moment than the energy crisis now going on in homes and businesses throughout our state. We have been working diligently on implementing a statewide energy plan to put Alaskans first, and this development project is a critical component of that plan."
The governor's multi-phase statewide energy plan contains three major components:
Immediate short-term relief, through energy rebates and state gas tax suspension plans which will be given to the Legislature later this week;
Intermediate steps, including development of reliable energy alternatives, conservation efforts and, now, the pursuit of an in-state gasline that will comply with and compliment AGIA. As part of his work to develop an alternative energy plan, State Energy Coordinator Steve Haagenson has been traveling the state discussing what alternative energy projects will work best in different regions;
Long-term plans, centering on AGIA and its goal of a large gas pipeline moving North Slope gas through Alberta's AECO Hub to North American markets. This project will maximize jobs for Alaskans, provide affordable gas for Alaskans, and maximize revenue for Alaska for generations.
Construction of this gasline project would start in the south and progress north. In the plan being considered, the first phase would leave Cook Inlet and reach Fairbanks and Interior Alaska by 2013. Over the next five years, the state hopes to see new discoveries of natural gas within the Cook Inlet basin and along the in-state pipeline's corridor. If not, the project's second phase could continue building the line north to access gas supplies in the North Slope Foothills or beyond, making them available to Interior and Southcentral Alaska by 2014. If phase two is not needed, the in-state line could be connected to the main North Slope line when it is completed around 2018 to 2020.
Natural gas sources
As a resource-owner state, Alaska has focused on unlocking stranded North Slope natural gas and getting it to market. However, Cook Inlet natural gas is similarly stranded, with this significant resource potential stifled by the relatively small potential for market expansion in Southcentral Alaska. With this venture, the state will link Cook Inlet gas resources to an expanding market, creating incentives for explorers to invest in finding more natural gas in Cook Inlet.
This development venture is in the initial stages and the details will take the next few months to develop. The goal is to roll-out the recommended structure and more details this fall, then seek any necessary enabling legislation and/or appropriations during the next regular legislative session starting in January 2009.
Coordinated field work should begin next spring, according to the plan. Engineering and permitting work would then begin in the next two years, with the goal of starting construction in 2011, and starting gas flowing by 2013.
Created by the Alaska voters six years ago, ANGDA has actively participated throughout the AGIA process. While a large mainline project is necessary to move Alaska's large volumes of natural gas to market, the state must also focus on providing gas as quickly and economically as possible for Alaskans' use. ANGDA's role with this in-state development is an important part of the public-private partnership. ANGDA is committed to working as a partner with ENSTAR and the state in this effort.
ENSTAR is also prepared to partner with ANGDA and the state to evaluate the project and the route believed to be the best for the state - the Richardson Highway route. The State of Alaska has a public interest in reaching the populations, communities, and military and industrial facilities along the Richardson Highway. As a resource owner in the Copper River Valley, the State also has a significant interest in promoting the exploration and development of natural gas in that basin. ENSTAR envisions its role in this partnership as engineering, constructing, operating, and maintaining the pipeline.
"I am confident that through partnerships like this, many Alaskans will soon find energy relief, with much of it coming from energy sources within their own regions," Palin concluded. "With this partnership, we are increasing the probability that a bullet line can be built, we are increasing the speed at which it will be built, and we are ensuring that the route taken will maximize benefits to Alaskans."
"I look forward to working with the Legislature as we move quickly to fulfill Alaskans' opportunity for affordable energy," she said.