Don’t take Gov. Sarah Palin’s announcement of a new initiative to “jump-start” the spur pipeline from Southcentral as an indication that something will actually happen. There are some dicey, unanswered questions, such as whether there is enough gas available from Cook Inlet to ship north through the pipeline given the declining production in gas fields in the region. The governor’s plan is to build the pipeline to Fairbanks by 2013 and supply Cook Inlet gas to Interior Alaska until a North Slope pipeline is built in 2018 or 2020. There is also the question of who would pay for the pipeline. There seems little doubt that the state will basically have to underwrite the project (costs could be $2 billion – $3 billion) because the amount of gas used in the Interior – maybe 50 million cubic feet/day at maximum ¬ cannot amortize this investment.  If the state decides to pay cash for the project it could happen, however. Given the huge revenues now being anticipated there will be plenty of money. The question is up to the Legislature. That aside, Palin felt she had to make a grand gesture in response to real pain people in the Interior are feeling from high energy prices, and this does that.

However, the governor does accomplish three things with the initiative. First, for better or worse she has short-circuited the proposal by Enstar Natural Gas for a private “bullet line” to the slope up the Parks Highway, and has also forced Enstar into a shotgun marriage with the state’s Alaska Natural Gas Development Authority (the private-public partnership the governor described.) Enstar previously pursued its own plans and seemed reluctant to work with ANGDA. The two are now together in a single team. Second, Palin has opted for ANGDA’s preferred route via the Glenn and Richardson highways to Delta via Glennallen rather than Enstar’s preferred route up the Parks Highway. There are pluses and minuses to both routes but the governor argues the route via Glennallen opens up access to any gas in the Copper River basin and also preserves the option for a spur line to Valdez. Third, Palin has basically endorsed ANGDA executive director Harold Heinze’s idea for the spur line to be built before the big pipeline so that the crunch on materials and labor will be avoided, and the project will be done by the time gas flows from the slope. Without some initiative like Palin’s it would be tough to get the political buy-in to build the spur line first. Now it could happen.

Bradners’ Legislative Digest is a private subscription service publishing reports on the Alaska Legislature and state government. This briefing is a special service, and is provided in cooperation with the Alaska Journal of Commerce. 

Bradners’ Legislative Digest is a private subscription service publishing reports on the Alaska Legislature and state government. This briefing is a special service, and is provided in cooperation with the Alaska Journal of Commerce.