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Governor Palin Unveils the Alaska Gasline Inducement Act


April 03, 2008

Governor Sarah Palin on Wednesday unveiled the Alaska Gasline Inducement Act (AGIA). The Governor's gasline bill heads first to the Legislature to begin the public review process.

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Questions & Answers Audio
Governor Sarah Palin, Revenue Commissioner Patrick Galvin, Natural Resources Commissioner Tom Irwin and Special Assistant Joe Balash



Jim Bowles, ConocoPhillips
Doug Suttles, BP
Craig Haymes, Exxon
Cam Toohey, Shell
Mark Hanley, Anadarko
Kirk Morgan, Kern River / MidAmerican
Tony Palmer, TransCanada
Harold Heinze, ANGDA
Bill Walker and Jim Whittaker, Port Authority
David Gottstein, Backbone 2 Paul Laird, The Alliance
Jason Brune, Resource Development Council
Mark Kroloff, ASRC
Marilyn Leland, Alaska Power Association
Curtis Thayer, ENSTAR John Zager, Chevron

"We must move a gasline forward as expeditiously as possible. We need low tariffs to maximize the returns to Alaskans. We envision an open access line so new fields will be explored and new reserves developed and shipped through the line for decades to come," said Governor Palin. "I am confident that this vehicle, the AGIA, gets us there and gets us there quickly, but ALWAYS with the best interests of Alaskans in mind."

The AGIA accomplishes six primary goals:

  • Initiates an application process open to any project sponsor
  • Takes all possible steps to promote the construction of a gas pipeline as quickly as possible
  • Ensures the North Slope basin is open to long-term exploration and production
  • Ensures reasonable natural gas tariffs
  • Ensures North Slope natural gas is made directly available to Alaskans
  • Creates natural gas pipeline jobs for Alaskans

"Our plan focuses on what's best for Alaskans: beginning with an open and transparent process, followed through with absolute "must-haves" for Alaskans and a strong commitment to low tariffs, while maintaining focus on becoming a viable and significant player in the nation's energy plan," said Governor Palin.

The bill contains specific mandates from any entity or coalition of entities interested in constructing the gas pipeline, which will protect Alaska's best interests:

  • Applicants must commit to expanding the pipeline project when justified by enough new gas
  • Applicants must commit to propose and support tariff rates that would produce the lowest reasonable costs to produce the highest price at the wellhead
  • Applicants must offer "distance-sensitive rates" to delivery points in Alaska
  • Applicants must provide a minimum of five off-take points in Alaska
  • Applicants must commit to establishing a local project headquarters, and local hiring offices in Alaska and to hire qualified Alaskans, as allowed by law

In return, Alaska will provide a matching state capital contribution on the cost of obtaining the initial regulatory certificate. The state is willing to contribute up to $500 million during this high-risk phase to induce an applicant or group of applicants that become the state's AGIA licensee, to move toward FERC or RCA certification.

"It is my intention to use the $300 million that has already been set aside by the Legislature. This predictable amount will induce construction of a gasline on our terms," said Governor Palin. "I am confident that we will see the state's half billion dollar commitment returned to us over and over again throughout the years in the form of lower tariffs which will result in high royalties from production. In addition, by committing state dollars to get this project going, we can avoid the loss of billions each year the project slips. Simply moving forward is in everyone's best interest."

The bill also sets the "evaluative criteria" which will be used during the selection process. The criteria the state will use to determine the best project include: the proposed project timeline, the proposed method to manage cost overruns, the proposed tariff rates, the ability of the project design to accommodate expansion, the percentage of the state matching fund that will be used, whether the project is feasible, and the applicant's ability to perform.

Based, in part, upon public input and the evaluative criteria, the commissioners would express their intent to issue a natural gas pipeline project license and forward the notice of intent to the Legislature. The Legislature would have 30 days to disapprove the commissioners' proposed action.

The goal of AGIA is to prepare our licensee to begin fieldwork by the summer of 2008.

Members of the Governor's gasline team will also host AGIA Town Hall Meetings next Monday in Anchorage and Fairbanks from 7:00 p.m. to 9:00 p.m.

The Anchorage Town Hall Meeting, with Commissioner Patrick Galvin and Deputy Commissioner Marty Rutherford, will take place at the Wilda Marston Theater inside the Loussac Library.

The Fairbanks Town Hall Meeting, with Commissioner Tom Irwin and Special Assistant to the Governor Joe Balash, will be held at the Lathrop High School library.


Source of News & Audio:

Office of the Governor



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Stories In The News
Ketchikan, Alaska