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Begich Frustrated Over Lack of Gas Line Project Progress

By | November 7, 2011

Senator Mark Begich cited his frustration at the lack of progress on getting an Alaska Natural Gas Pipeline built as he introduced legislation on Monday in Washington.  His bill would boost prospects of a so-called “stub to hub” line – that is, a shorter pipeline “stub” that could be built from the North Slope to a hub like Fairbanks, with the plan of eventually extending the line from there.  As it is, there are federal benefits such as loan guarantees and expedited permitting timelines – but only for a gas line that reaches the Canadian border.

Senator Begich’s bill would give those same incentives to a gas line that only goes part-way… with the eventual plan of getting gas to outside markets.

“The idea here is to ensure that as the state kind of reconsiders how it’s focused on a gasline we still put into place some opportunities that the federal government will have to have in this process.  One is to expedite the regulatory process, to streamline the regulatory process, to kind of cut the red tape, so whatever gas line they decide to move forward on, that the federal government won’t be blocking it or the stumbling block to getting it to market,” Begich said.

Senator Begich’s bill would also give the Federal Pipeline Coordinator’s office a role in working on a smaller gas project. Right now that DC and Anchorage-based office can only help with a gas line headed to Canada.  Federal Coordinator Larry Persily says as long as FERC, the Federal Energy Regulatory Commission, sees a smaller stub project inside Alaska as leading to an eventual bigger project, his office could have a role.

“It gives us more options, it says if you’re only going to build part of it, but the federal commission says eventually it will be part of the entire project you can get the benefits, even if it’s a smaller project, even if it’s only half a project,” Persily said.

Persily says he doesn’t see this as a signal that hopes of a gas pipeline through Canada to the Lower 48 are dimming.  He says that’s still the goal, but Persily says he is sensing that Alaskans and its political leaders are grasping at whatever they can to move things forward.

“I guess what this signals is increasing frustration, you might even call it desperation, on the part of Alaskans who are saying, give me a pipe, any pipe, anywhere, any size, give me a piece of steel that holds gas, get something done,” Persily said.

Last week, some members of Senator Begich’s Democratic Party called for a halt to federal subsidies for oil and gas companies as a way to save money – and told APRN that they would not support more financial incentives for an Alaska gasline project.  But Senator Begich says the loan guarantees aren’t the highest priorities in his bill.  He says expediting the process and having regulatory certainty is more important.

“That’s the ultimate at the end of the day.  If we can knock down these regulations, get focused on bringing product to market, that’s what I’m focused on.  So if they have heartburn over 1 piece, we’ll deal with it.  But at the end of the day I hope these people as they get into their big SUVs and head home tonight or flip on their power switch to light up their house that they think about where that’s all coming from,” Begich said.

Senator Begich isn’t confining his focus to what Washington can do to get a gas line moving… in September he wrote to Governor Sean Parnell encouraging the state look at creating its own loan guarantee to give some incentives to the project.  That might get more attention if Congress balks at expanding the federal loan guarantees.

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