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Governor Tells Utility Commissioners They Can Help Alaska Gas Line
State regulatory commissions should consider benefits
of long-term gas contracts


July 15, 2004

Salt Lake City, Utah - The proposed Alaska natural gas pipeline needs the security of long-term sales contracts before developers can take the multibillion-dollar risk of starting construction, Alaska Governor Frank H. Murkowski told the National Association of Regulatory Utility Commissioners Wednesday.

State utility commissions can play a key role in making the project happen as local distribution companies and gas and electrical utilities look to develop those long-term deals for Alaska gas, the governor said.

"State regulatory commissions are critical to advancement of the Alaska gas line," Murkowski told the group's summer meeting today in Salt Lake City. "We need long-term sales contracts to make the project work, we need state utility commissions to assist in developing those contracts, and the nation needs Alaska gas sooner rather than later."

The governor acknowledged that state rate-setting commissions might be uneasy with utilities committing to long-term gas contracts. "I realize this is an uncomfortable concept for many of you because of past events in the energy trading business, but we can't let past mistakes hurt our future.

"I believe that after careful analysis, you will find that stable and affordable long-term supply contracts will be of significant benefit to your ratepayers," Murkowski said.

The governor's Salt Lake City presentation was his third in five days - the other speeches were in Calgary, Alberta, and Victoria, British Columbia - as he works to promote the Alaska gas line project.

"For decades, our economy lived under the protective shield of a natural gas bubble - gas was cheap and plentiful," Murkowski told utility commissioners. "To say the least, things have changed."

With natural gas prices almost three times higher on the New York Mercantile Exchange than they were three years ago, "the nation faces an uncertain future as to where businesses, industries and homeowners are going to get gas and what they will have to pay for it," the governor said.

"I am not suggesting that Alaska can fill the entire gap between demand and production over the coming decades. Nor is Alaska gas the total answer for all our energy problems, but I would suggest it is one heck of a big step in the right direction."

In addition to needing their cooperation in helping utilities to develop long-term sales contracts to help bring Alaska gas to market, Murkowski told the state commissioners he also needs their help in pushing Congress to approve stalled energy legislation.

"It is no secret that the nation's energy legislation is foundering. It has been taken hostage by unrelated issues and political posturing," the governor said. "The stalled energy bill contains a number of provisions critical to the construction of the Alaska gas pipeline, including expedited judicial review to prevent costly delays to the project, federal loan guarantees and reasonable tax benefits for those willing to risk real money on the line.

"Any assistance you can provide in moving these provisions will be a great deal of help for Alaska and the consumers you are charged with looking out for."

While waiting for federal enabling legislation to pass, the governor and his staff are negotiating with the major North Slope oil and gas producers and other companies interested in building the gas line from Alaska's North Slope to Alberta, where the gas would feed into the North American pipeline system.

"The state may have the opportunity to review two proposals for building the line," the governor said. "One producer-owned line and one independently owned project, with possible state equity participation in either proposal."


Source of News Release:

Office of the Governor
Web Site



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