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
"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
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