By Tim Bradner
Alaska Journal of Commerce

U.S. Sen. Lisa Murkowski warned Alaska legislators March 18 that delays in getting an Alaska gas pipeline underway will open U.S. gas markets to competitors and would undermine the big project.

In her annual address to a joint session of the Legislature, Murkowski cited liquefied natural gas import projects that are rapidly advancing and new gas development in the continental U.S.

Murkowski did not criticize Gov. Sarah Palin's move last year to block efforts by North Slope producers to build a pipeline and to instead push for an independent pipeline company-owned project, but she urged the Legislature and the governor to come together on an agreement.

“Sempra's LNG receiving terminal on Mexico's Baja Peninsula is scheduled to open later this year to accept 1 billion cubic feet of gas daily,” she said. “The company has already applied for a permit to double its capacity. Cheniere Energy put together two LNG projects on the gulf coast in Texas totaling 4 billion cubic feet per day. LNG tankers are expected to start docking at the berths later this year. Canaport LNG at Saint John, New Brunswick, is also expected to start taking gas deliveries later this year, importing an additional 1 billion cubic feet per day for East Coast markets.”

Expansions of domestic pipelines will make it easier to move gas from new producing areas, too, she said.

“The $4 billion, 1,600-mile Rockies Express pipeline will start moving 1.8 billion cubic feet of gas from the Rockies to the Midwest starting next year. El Paso and Pacific Gas and Electric are also working on a new pipeline from the Rockies to the California-Oregon border. They hope to start construction in 2010, with initial capacity of 1.2 billion cubic feet per day,” Murkowski said.

The senator said federal agencies still see an Alaska pipeline as a strategic solution to the nation's long-term natural gas needs, but the expected delivery time for Alaska gas is being pushed out into the future. The U.S. Energy Information Agency now estimates that Alaska gas could be delivered in 2020. Two years ago the EIA estimated its arrival in U.S. markets in 2015, the senator said.

“We are slipping and cannot afford to slip further. Our competitors are moving ahead. Steel and construction costs climb higher every year,” Murkowski said. “There is nothing stopping us from getting a gas line built but possibly ourselves.”

Palin is considering a proposal put forth by TransCanada Corp. and may soon recommend the company to the Legislature for a special state license that would entitle the Canadian pipeline company to a $500 million state subsidy and exclusive access to streamlined permitting. The Legislature must approve the license.

Palin has also rejected a plea by ConocoPhillips for an agreement on gas production taxes that would help the company develop its own pipeline project.

Tim Bradner can be reached at tim.bradner@alaskajournal.com.