A lesson in Stevens' change of heart on the gas line
| Mar 17, 2010Last week, former U.S. Sen. Ted Stevens weighed in on the ongoing debate over the future of Alaska's natural gas pipeline.
In a speech to Commonwealth North, Stevens said he's come to the realization in the last six months that the natural gas market in the Lower 48 is saturated and the best option for Alaska's vast amounts of natural gas is the markets in Asia.
Stevens has long supported the proposed gas line through Canada and worked hard to obtain economic incentives for the route in 2004. Over the last few years I've chronicled his frustration level at the state's inability to adopt a viable gas pipeline strategy.
Two years ago, Stevens made no secret of his dislike for AGIA. On Feb. 19, 2008, during his annual visit to Juneau, Stevens criticized AGIA as being unrealistic.
"This will be the largest project ever financed by private capital in the history of the United States. It's not going to be government money, it's financial market money," Stevens told lawmakers. "Financing terms won't be set by the Legislature, the governor or the Congress. They're going to be set by the people who manage the money."
Five months later, he suddenly embraced AGIA and encouraged lawmakers to approve the Palin/Parnell plan.
On July 11, 2008, Stevens said "I would hope they follow the governor's lead and get it done." Lawmakers ended up following Stevens' advice and the governor's lead and today Alaskans are stuck with AGIA.
The fact that Stevens' opinion has changed due to changes in global market supplies of natural gas provides an important lesson on why government has no business being in the oil and gas business: Markets determine commodity destinations, not politicians or populist rhetoric.
Meanwhile, two voices worthy of listening to in this debate have laid it out very clear and simple.
Larry Persily, recently confirmed by the U.S. Senate as the federal coordinator for the Alaska gas pipeline project, said the government can't dictate that Alaskan gas goes to Asia. "It's important to let the market have a vote," said Persily.
Steve Porter, former Deputy Director of Revenue and the publisher of the Alaskan Advocate blog, also put the latest rush to route judgment in perspective:
"The pipeline builders and the shippers have spent their entire careers on oil and gas issues and have substantial experience in modeling the economics of various pipeline scenarios and in building gas pipelines. They don't waste their time debating the politicians about which proposal is best."
The State of Alaska can't determine the market for Alaska's gas, but it can play a role in determining the marketability of Alaska's gas.
By adopting a competitive gas tax rate and corresponding measures to ensure fiscal certainty needed by the producers to help reduce the risk of the project, we will be much closer to our elusive dream of a natural gas pipeline.
Andrew Halcro is running against incumbent U.S. Rep. Don Young in the 2010 Republican primary. He is the publisher of AndrewHalcro.com, a blog devoted to Alaska issues and politics, where this column first appeared. He is president of Avis/Alaska Rent-A-Car, his family business. Halcro served in the Alaska House of Representatives from 1999 to 2003, and he ran for governor in 2006 as an independent. He and Democrat Tony Knowles lost to a woman named Sarah Palin.
Talk of the Tundra features commentary by Alaskans from across the state. The views expressed are the writers' own and are not endorsed by Alaska Dispatch.
This is ignoring the obvious. DOE approves the export permits.
The pipeline we mandated, the all-Alaska pipeline to Valdez, is permitted, and EIS for the LNG trains and LNG tanker impacts are up to date. There is nothing stopping Alaska from joining Canada in exporting gas to Japan and Korea.
I don't think Andrew really wants anything built.
If we want Alaska to avoid a smack in the face economically, we need to keep our gas liquids in state, keep the jobs here, and keep the infrastructure here, we need to elect Bill Walker.
Parnell and Samuels want the Canadians to have it all. No. Alaska first, not last this time.
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In the near-term we are better off placing a laser-beam focus on putting more oil in the pipeline we already have. If we are going to throw hundreds of millions of dollars at securing our economic future, let's reinvest ourselves in selling what we sell best: $80+/barrel stuff. Along the way, it wouldn't hurt to figure out how to harvest the more-than-adequate supplies of energy that are peripheral to southcentral Alaska, simultaneously dispensing with the bullet-line boondoggle and extending our infrastructure into some of Alaska's richest lands.
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“The fact that Stevens' opinion has changed due to changes in global market supplies of natural gas … .”
No. The was no market for Alaska’ s gas well before shale gas because there were ample supplies of gas in the S48; some of the gas was shut in as early as 2005. All shale gas did was slam the door shut so hard that even Halcrows and Stevens of the world could understand.
The same situation, a long tern world wide over supply of gas at tidewater, applies to crack pots who are under the delusion they can construct an 800 mile gasline to Tidewater and compete with those that already have the gas at tidewater. When a considerable number projects at tidewater are being delayed, postponed or abandoned, abandoned with hundreds millions already invested.
Halcrow also stated “The State of Alaska can't determine the market for Alaska's gas, but it can play a role in determining the marketability of Alaska's gas.” Halcrow, there you go again, you want to give the State Alaska away to the oil companies. Just what Alaska needs, another oil company shill in public office .