Ex-commissioner calls for Alaska energy mega-projects analysis, and ‘call bluff’ on North Slope gasline
November 18, 2013
By Alex DeMarban | The Alaska Dispatch: With Alaska’s government now in the red but still blowing hundreds of millions of dollars on multiple energy mega-projects, it’s time for a comprehensive analysis of those projects to help Alaska leaders prioritize the public’s money and stop wasting money on pipe dreams.
That was the take-home message from Harry Noah, a former Alaska Department of Natural Resources commissioner under Gov. Wally Hickel, who spoke at a Commonwealth North discussion Wednesday about the blizzard of state-subsidized efforts — including everything from dueling pipeline proposals to a power-producing dam that, if built, would be the second largest in the country.
First of all, Noah recommends the state cut to the chase on the biggest project of all: The $65-billion, industry-led pipeline proposal to tap North Slope natural gas for sale outside Alaska. The project has been studied for decades by the major oil producers who own the rights to the Arctic region’s vast natural-gas reserves. But time and again, the companies have pulled the plug on the huge effort, citing unfavorable market conditions.
The project would be a game-changer for the state’s economy, so Alaskans have endlessly waited. But the hope that it might one day happen has helped strangle other ideas, Noah said.
It’s time to offer a fiscal deal on natural gas taxes and royalties to the oil producers — ConocoPhillips, BP and Exxon Mobil Corp. — and give them a limited time to accept. The deal should include a second contract stating that if they don’t agree to the project, they’ll need to sell gas to the state at inexpensive, stranded-gas rates.
“My thought is you call their bluff,” he said.