Press Release: Committee Holds Public Hearing In Kenai - Federal Activity, Pipeline Viability and Price Forecasts Discussed

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Sen. John Torgerson
State Capitol, Room 427
Juneau, AK 99801-1182
Phone: (907) 465-2828
Fax: (907) 465-4779

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Rep. Joe Green
State Capitol, Room 403
Juneau, AK 99801-1182
Phone: (907) 465-4931
Fax: (907) 465-4316

For Immediate Release:	November 7, 2001
Contact:	Senator John Torgerson at (907) 260-3041 Representative Joe Green at (907) 269-0123

(KENAI) -- The Joint Committee on Natural Gas Pipelines opened two days of public hearings in Kenai with testimony on the status of a natural gas pipeline from state and federal agencies.

John Katz, director of State/Federal Relations and special counsel to the Governor, and Duncan Smith and C.J. Zane, with Dyer, Ellis and Joseph, all testified before the committee via teleconference that U.S. Senate Majority Leader Tom Dashle is in support of bringing Alaska's natural gas to market via a southern route through Alaska and Yukon Territory. The three provided information on the attitude in Washington D.C. toward a gas pipeline, and said that U.S. Senator Frank Murkowski is working toward legislation that would protect Alaska's position.

Roger Marks, an economist with the Department of Revenue, showed the committee different models used by the Department to estimate the economical viability of a natural gas pipeline, LNG project, and Gas to Liquid project. The committee was able to compare the netback price, the rate of return, and the revenue to the State for the various projects. Marks was careful to note that the inputs to create the models are for explanation purposes only, to show the sensitivity and price variations using different applications.

Ed Small, with Cambridge Energy Research Associates, provided an updated forecast for natural gas prices and demand in the near future. Small predicted that the North American economy, currently weak, will recover next year and the price of natural gas will rise as high as $3.25/BDF by the end of 2002.

The Alaska Department of Revenue is working on a report mandated by Senate Bill 158, which will evaluate and make recommendations on whole or partial state ownership of a gas pipeline. Deputy Commissioner Larry Persily said that the department has conducted numerous interviews in and out of Alaska with oil companies, pipeline companies, bankers, business leaders and legislators, and hopes to complete the report before the Legislative session begins on Jan. 14.

John Larson, a geologist with U.S. Minerals Management Service, briefed the committee on proposed off-shore natural gas lease sales in the Cook Inlet, and estimated that approximately 2.9 trillion cubic feet (TRF) of gas, of which one TCF is economical recoverable gas, is undiscovered in Cook Inlet.

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