Bodman to Alaska: Step It Up; LNG Is Coming

In a letter Wednesday to Alaska Gov. Frank Murkowski, U.S. Energy Secretary Samuel Bodman urged the governor to quickly push through the legislative and contractual work necessary to begin the Alaska Natural Gas Transportation Project.

That's preaching to the choir. Murkowski has staked his legacy on construction of a gas pipeline from his state's North Slope to Lower 48 markets.

Bodman's letter can be more aptly read as a warning to pipeline opponents and naysayers in the Alaska Legislature and elsewhere. "I strongly believe that the national interest is best served by a decision this summer on the critical legislative and contractual issues currently being considered by the state and its leaders," Bodman wrote.

A second special session of the Alaska Legislature to consider pipeline-related matters begins July 12. Then, lawmakers will again consider restructuring the state's tax on oil/gas production, amending its Stranded Gas Act, and potentially ratifying Murkowski's draft contract with BP, ConocoPhillips and Exxon Mobil to establish fiscal terms between the producers and the state (see Daily GPI, June 26), all with the aim of advancing the pipe project.

"Given the global constraints on personnel and other resources, energy companies may redeploy their resources, resulting in significant delays of an Alaska project," Bodman wrote. "In addition, the opportunity for Alaska natural gas to serve markets in the Lower 48 could be overtaken by LNG [liquefied natural gas] imports if Alaska gas is not perceived as a reality to meet demand."

On June 30 the Department of Energy (DOE) said it joined 14 other federal departments and agencies in signing an agreement to expedite the permitting and construction of the Alaska pipeline project (see Daily GPI, June 30). "We need to do all we can to increase our domestic supply of energy, including natural gas, and the Alaska Natural Gas Pipeline will help us do that," Bodman said at the time. "Alaska's North Slope is a valuable natural resource that has tremendous potential to provide a significant portion of our nation's natural gas needs to help heat homes and build industry."

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