Construction of Alaska Natural Gas Pipeline
Agreement Establishes Framework for Increasing Energy Security
June 29, 2006
The departments agreed that when operational, the Alaska Natural Gas Pipeline will substantially increase domestic natural gas supply and advance the Administration's energy security policy. The agreement signals the U.S. government's commitment to expedite the federal permitting processes for the Alaska Natural Gas Pipeline and establishes a project management framework for cooperation among participating agencies to reduce bureaucratic delays in construction of the pipeline and delivery of natural gas to consumers.
"We need to do all we can to increase our domestic supply of energy - including natural gas - and the Alaska Natural Gas Pipeline will help us do that," Secretary Bodman said. "Alaska's North Slope is a valuable natural resource that has tremendous potential to provide a significant portion of our nation's natural gas needs to help heat homes, and build industry. I appreciate the coordinated effort of all of the federal agencies who are working together to help make the pipeline a reality."
The pipeline is expected to supply about 10 percent of future U.S. natural gas demand. When the Alaska pipeline is fully operational, it will carry 4 billion cubic feet of natural gas each day. Natural gas serves six of every 10 American households, about 62 million homes, and is used to generate about 16 percent of the nation's electric power. Natural gas is also indispensable as a feedstock for fertilizer and chemical manufacturers. In recent years, rising demand and limited increases in supply have resulted in high natural gas prices that affected residential and industrial users across the economy.
Alaska Governor Frank H. Murkowski today praised the action taken by the Bush administration in signing a coordinated memorandum of understanding to expedite permitting for the Alaska Gas Pipeline Project.
"The President has rightly identified the effort to commercialize the vast natural gas reserves of Alaska's North Slope as crucial to the energy policy of the U.S.," Murkowski said. "The memorandum of understanding between the Department of Energy and 14 other federal departments and agencies underscores the commitment the Bush administration has made."
He said, "The gas pipeline is a serious project that will contribute a significant source of natural gas to the nation's homes and industries for decades. The support of the Congress was made clear in passage of gas pipeline incentives in 2004, and the MOU now signed by the Bush administration demonstrates continuing federal support."
"This is a tremendous step forward, and we are gratified to have the MOU. Now we need to move this project through the Legislature," said Governor Murkowski.
Governor Murkowski has called a second special session of the State Legislature to begin on July 12th to consider and pass a new oil and gas tax structure, amendments to the Stranded Gas Act, and the gas pipeline contract. Once the gas transportation contract and related legislation are passed by the Alaska State Legislature, the State of Alaska will join with industry to form a corporate entity that will build the pipeline.
The Alaska Natural Gas Pipeline Act, enacted on October 13, 2004, established the expedited federal review of a natural gas transportation project that would carry Alaska natural gas to the border of Alaska and Canada. In accordance with the Act, President Bush nominated former Alaska State Senator Drue Pearce as Federal Coordinator for Alaska Natural Gas Transportation Projects. Until her confirmation, the position's temporary authority is vested with the Secretary of Energy.
The Federal Interagency Memorandum of Understanding for the Alaska Natural Gas Transportation Project was signed by senior executives from fifteen federal organizations. It defines responsibilities related to the approval of the pipeline project and provides for streamlined regulatory and environmental processes and reviews/approvals for the giant undertaking.
The Memorandum of Understanding
was signed by the Departments of Energy, Agriculture, Commerce,
Defense, Homeland Security, Interior, Labor, State, Transportation,
Treasury, and the Advisory Council on Historic Preservation,
Council on Environmental Quality, Environmental Protection Agency,
Federal Inspector for Alaska Natural Gas Transportation Projects,
and the Federal Energy Regulatory Commission.
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