Major setbacks don't deter Alaska Gasline Port Authority.(From the Publisher)

The Alaska Gasline Port Authority has guts; you've got to give them that. In the face of a couple of recent horrendous setbacks, they insist they are still upright and running. After attracting a world-class partner, Sempra Energy of San Diego, the authority launched an aggressive public relations effort to help educate Alaskans on the vital aspects of their program, and to convince Slope producers to sell them some of Alaska's gas. The educational part was quite impressive, but as for persuading the producers to let them buy gas, it backfired viciously. A producer powerhouse personality took them into camp and tore their PR campaign limb from limb.

On May 18, Joe Marushack, vice president for North Slope development for ConocoPhillips, stood before a giant blowup of an AGPA ad and before a packed crowd at an oil industry luncheon called into question nearly every point being made in the ad, many of which were characterized as outright lies.

Ten days later, on May 27, in a stunning blow to AGPA, Sempra withdrew its support for the all-Alaska gas pipeline because of "Alaska's political wrestling (that is) costly and time-consuming, (all the while the market for West Coast gas is) actively being pursued by others," including ConocoPhillips. The pull-out, according to AGPA general counsel Bill Walker, is not a lack of faith in the economics of the all-Alaska line, but rather that it needs the active support of the Murkowski administration in Juneau and that it must obtain gas from recalcitrant producers.

There also is another obstacle AGPA must overcome, according to Marushack: the 1920 Jones Act, mandating shipments between U.S. ports be made in American-built ships. In a copyrighted article in the Copper Valley Bi-Weekly, editor Mary Odden quotes Paul Fuhs of Backbone II, a non-partisan coalition of such luminaries as former governors Watter Hickel and Jay Hammond: "The major impediment to an all-Alaska gas line has never been the Jones Act, which could feasibly be solved in several ways, including the reflagging of American-made tankers. The big problem is the refusal of BP, ConocoPhillips and ExxonNobil to sell gas to AGPA. This refusal by the producers to sell gas may be illegal. The Murkowski administration also has stated that the gas producers leases require them to sell the gas if they have a willing buyer," Fuhs asserts.

Focusing on the difficulties of the all-Alaska line, the article says, has been a good way for the big three to distract the public from problems facing their 3,600-mile-long, $25 billion pipeline through Canada to Midwest America, fraught with regulatory problems and land claims disputes.

Further quoting the article, Fuhs says, "It is important to remember that the interests of Alaskans are not the same as the interests of the producers' shareholders. BP, ConocoPhillips and ExxonMobil have natural gas in Indonesia, Qatar and Russia. Most of their agreements in those regions require that they develop and market the gas within a certain time period or lose rights to the resource.

"Therefore it makes sense from the shareholders' standpoint for the producers to develop the gas assets they must develop now or lose, and sit on Alaska's North Slope gas, which has an expensive pipeline project attached and does not have a mandated timeframe for development."

Meanwhile, ConocoPhillips and BP are developing West Coast LNG terminals to receive gas from producer-owned wells in Indonesia and perhaps even Russia to provide gas for delivery to Southcentral Alaska.

What a crock!

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