State Senate Looks at Long Term Railbelt, Southcentral Energy Development Plans

Monday, the Senate began taking a close look at the plans being developed for long term energy supplies along the Railbelt and in Southcentral Alaska. The Resources Committee opened three days of hearings on gaslines – focusing first on the Stand Alone project – or Bullet Line – that would bring gas from the North Slope, through Fairbanks, to Anchorage and the Kenai Peninsula.  However, some members are beginning to indicate there might be too much of a Southcentral focus.   At various levels of planning right now are two geothermal facilities, the Susitna hydro project and new exploration plans for Cook Inlet gas.  Finance Co-chair Bert Stedman, of Sitka, told Alaska Gas Development Corporation president Dan Fauske that the legislature must consider all the other options available – not just the Bullet Line.

Under the AGDC’s plan, the state’s investment could be limited to $400 million on initial permitting and project-related studies with the rest of the construction cost coming from private investors.  The state would have the option of participating in that part of the project.  Fauske agreed there are options – saying they are being incorporated into his plans.  He pointed to new information recently coming to light, such as huge, new gas reserves estimated in Cook Inlet.  However, he countered it with concerns among the public in Fairbanks and Southcentral – to the point of desperation in some places.  From a planning perspective, Fauske cautioned against what he called “analysis-paralysis.”

Fairbanks legislators questioned the AGDC’s estimates of the cost of gas for users of the Bullet Line.  The current proposal shows energy costs would decrease throughout the area, however, Fairbanks’s rates would be higher. Fauske said that a final structure of the project would be a policy call by the legislature – whether to put in place a one-size fits all pricing schedule or the economic model now being used.  The committee has TransCanada on its schedule Tuesday.  Legislators have said they’re hoping for an update on the status of the large volume gas line from the North Slope to Canadian and Lower 48 markets.

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