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Governor Details Gas Pipeline Benefits to Rural Alaska
Murkowski Speaks to AFN Leadership Forum in Anchorage


July 06, 2006

Alaska Governor Frank H. Murkowski today outlined potential benefits to rural Alaska from the proposed gas pipeline to members of the Alaska Federation of Natives Leadership Forum 2006 in Anchorage.

Speaking at the Hotel Captain Cook as part of the two-day conference on fostering innovation, economic growth and prosperity, the governor outlined four key ideas he believes are in the best interests of rural Alaskans as the public continues to weigh in on the proposed gas pipeline contract.




The governor highlighted shipping gas via the Yukon and Kuskokwim rivers to feed Western Alaska; filling the Power Cost Equalization endowment with the passage of new oil tax legislation; providing energy to run refrigeration and ice machines crucial to quality fish production in rural Alaska and creating a Permanent Fund Dividend "check-off" system for investing in the natural gas pipeline.

"Higher energy costs make traditional ways of earning money in rural Alaska more difficult," Murkowski said. "Imported diesel is so expensive that the ice made from diesel powered machines in Bristol Bay is hard for fishermen to afford, even with the higher price of fish.

"With this gas pipeline, there will be a potential off-take point at the Yukon River. That will allow for the potential shipping of propane and butane by river to Western Alaska and outlying areas. We can lower the costs of energy by supplying a cheaper alternative to imported diesel and other petro-fuels with what are known as mileage-sensitive rates, meaning only the cost of shipping the gas from the North Slope to the Yukon River."

Murkowski also spoke to delegates about the potential for personal investment in the natural gas pipeline with a "check-off" system on the Permanent Fund dividend. The system would allow individual Alaskans to invest a portion of their Permanent Fund dividend check in gas pipeline bonds that would receive the federally-mandated rate of return on the project set forth by the Federal Energy Regulatory Commission.

"Our team is working out a PFD 'check off' system in which Alaskans can invest in the state's share of the line," Murkowski said. "Alaskans would get the same rate of return on their investment that the state gets for its pipeline ownership.

"It is fair because all PFD recipients will have the same access to ownership. Just as the dividend was designed to give Alaskans a reason to be interested in Permanent Fund management, investment in the gas pipeline will give Alaskans a greater reason to be interested in how that pipeline is managed."

Commenting further on energy, the governor said it is increasingly important for lawmakers to pass the petroleum production tax when the special session of the Legislature convenes July 12 as it applies to the Power Cost Equalization endowment.

"Assuming the legislature gives me a reasonable PPT bill I can sign, the capital budget has an appropriation of sufficient monies ­ some $183 million ­ to fully endow the PCE," Murkowski said.

"The Rural Energy Action Council report released last year contains good proposals on which we are acting, such as fully funding PCE and continuing the very successful Bulk Fuel Loan program. And following their recomendations, we can help spin off $25 million per year from the endowment instead of the usual $15 million to help fight the rising energy costs across rural Alaska."

The 8-member REAC was created by Murkowski in February of 2005 to propose ways to bring down the high cost of energy in rural Alaska. Fully funding PCE varies with the price of fuel each year. To make up for the shortfall requires a general fund appropriation by the Legislature, which was included in the capital budget the governor signed last week.



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