Session: State Capitol, Room 427 Juneau, AK 99801-1182 Phone: (907) 465-2828 Fax: (907) 465-4779 Interim: 35477 Kenai Spur Highway, Suite 101 B Soldotna, AK 99669 Phone: (907) 260-3041 Fax: (907) 260-3044 345 W. Sterling Highway, Suite 102 Homer, AK 99603 Phone: (907) 235-0690 Fax: (907) 235-4008

Peninsula Clarion Article

As many of you know, I am the Chair of the Joint Committee on Natural Gas Pipelines. That has been a primary focus since I was appointed as the chair in May 2001. I want to maximize the benefit Alaskans receive from our natural gas resources.

Most recently, we hired a Washington, D.C. law firm to provide expertise on federal regulatory issues critical to eventual construction of a pipeline to bring North Slope natural gas to market.

The firm, the oldest and largest major law firm based in the nation's capital, will provide legal council on FERC issues relating to a natural gas pipeline. The contract runs through the end of the current legislative session.

Most of the decisions on an Alaska natural gas pipeline will be made in Washington, D.C., by Congress and the Federal Energy Regulatory Commission (FERC). If we want to have a seat at the table, we need to develop a level of expertise on FERC issues and Congressional legislation.

I have been traveling to both Washington, D.C. and to Canada to keep this issue in the forefront.

In D.C., I proposed a package of amendments to the Alaska Natural Gas Transportation Act (ANGTA) of 1977, which would explicitly ban an "over-the-top" route; allow access to the pipeline by future gas producers; set pipeline tariffs to encourage future in-state gas exploration and development; ensure in-state access to gas for consumer use and economic development; establish financial incentives pertaining to accelerated depreciation schedules; and encourage the use of Alaska workers and businesses on the job.

To bolster that support, I introduced SB 168 - No Gas Pipeline Over Beaufort Sea. That bill clearly states that it is the intent of the Alaska Legislature that the commissioner may not grant a right-of-way across state lands in and adjacent to the Beaufort Sea for an over the top route until a southern route is built. Basically, the bill recognizes that an "over the top" route is not in the state's best interests.

I am committed to seeing expeditious construction of a pipeline that will not only get Alaska gas to southern markets, but also bring new jobs, a diversified economy, and reliable in-state access to gas and other benefits to the state.

My contacts with various Canadian officials have been both singly and with members of the Joint Committee. I have been to Whitehorse, YT, Yellowknife, N.W.T., Calgary, Albt., Edmonton, Albt., and Vancouver, B.C. to meet with officials responsible for pipelines, energy, economic development, mining, Native affairs, and international trade.

I was encouraged by the friendly reception we received, and by the opportunity to meet face-to-face with Canadian leaders to hear first-hand each government's view of the political, legal and economic aspects of gas development.

Alaska and Canada are working to encourage construction of pipelines to bring their respective Arctic gas deposits to market. Three major oil and gas producers are studying the relative merits of the "highway route" south along the Alaska Highway through the Yukon, and the so-called "over-the-top" route east along the Arctic coast before turning south through the NWT's Mackenzie River delta.

We all recognized that there was a great need for increased discussions and interactions by all parties. I explained the reasons for Alaska's position against the over-the-top route to the Mackenzie River, and engaged in a frank discussion of corresponding needs and concerns from the other areas.

The high stakes and strong feelings on this issue for the provinces and Alaska are obvious, and I will continue to work toward an understanding between the parties.

Finally, I have been directly engaged in reviewing the economics of the situation. Every morning I meet with an oil and gas economist who is a specialist in the field and a faculty member of the University of Alaska.

We review numerous "models" that include multiple variables for analysis and comparison.

Alaska's natural gas is the energy of the future, and finding a way to get this gas to market is one of the most important development prospects on Alaska's economic horizon. The people want it, the Legislature wants it and the industry wants it. I have every confidence that we can all work together for a gasline project that will benefit everyone.

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