Features

U.S. Senate votes for southern route for Alaska gas pipeline

By H. Josef Hebert The Associated Press
Thursday March 07, 2002

WASHINGTON — The Senate voted Wednesday to require any pipeline that would carry natural gas from Alaska’s North Slope to pass along a southern route through Alaska instead of an alternative route mainly through Canada. 

The proposal, part of a sweeping energy bill expected to be debated for at least a week, also would provide $10 billion in loan guarantees in an attempt to spur construction of the pipeline. 

Although lawmakers have called an Alaska natural gas pipeline key to meeting the nation’s energy needs, there has been no rush by industry to begin construction at current, relatively low, gas prices. 

One industry report concluded that the pipeline, which would cost $15 billion to $20 billion to build, was not economical. 

Still, the energy bill seeks to provide incentive for building the line. Alaska’s Republican Sens. Frank Murkowski and Ted Stevens wanted to make certain if it is built it takes the southern route through Alaska. A consortium has proposed taking the line under the Beaufort Sea and south across Canada through the Mackenzie Delta, contending that route is cheaper and would bring more Canadian gas into the lower 48 states. 

After a call from Alaska Gov. Tony Knowles, a Democrat, Senate Majority Leader Tom Daschle offered an amendment directing the southern route. Murkowski added provisions that would assure Alaska’s industry would have access to some of the gas should the line be built. 

The provision was approved 93-5. 

“If this gas goes east (along the northern route) Alaskans will never enjoy a single benefit,” said Stevens. “I told the industry that line will go east over my dead body, and I’m not quite ready to leave this world.” 

Sen. Jeff Bingaman, D-N.M., said the government needs to act to persuade industry to build the pipeline so that the vast gas reserves along the North Slope can be brought south. Energy experts predict U.S. demand for natural gas will grow 40 percent over the next two decades. 

The gas line, which would take seven years to build and produce tens of thousands of jobs, also has been used to counter those who argue that jobs are key in opening the Arctic National Wildlife Refuge to oil drilling. 

In addition to the loan guarantees, Daschle also has proposed that the government provide tax credits on the Alaska gas if the price falls below a certain level. 

A number of Western GOP senators from gas-producing states have balked at such subsidies, arguing it would put gas producers in the lower 48 states at a disadvantage. The tax subsidies were expected to be taken up later when senators consider energy tax issues. 

Sen. Don Nickels, R-Okla., voted against restricting the route and said he also questioned the $10 billion in proposed loan guarantees.  

He said neither provision had been studied adequately. 

A House-passed energy bill has a similar provision requiring the southern route, which would take the line along the path of the existing oil pipeline, then along the Alaska Highway and into Canada, and finally into the lower 48 states. 

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On the Net: 

North Slope page from Idaho National Engineering and Environmental Laboratory: 

http://www.inel.gov/energy/fossil/environ/northslope-util-study.shtm l