Alaska gas is now national imperative.(From the Publisher)

Ever since February, when Gov. Frank Murkowski announced he had achieved a contract (an incomplete work in progress) with North Slope oil producers to build an Alaska gas pipeline, the project has been gradually drawing more and more national attention.

As the country focused on the price of gasoline, attention started to center on an impending worldwide-nationwide shortage of natural gas. Leading U.S. energy strategists took serious note of increasing dependence on foreign gas, just as the U.S. is now more than 62 percent dependent upon foreign oil.

The first phase of national interest culminated in passage of the Alaska Natural Gas Pipeline Act of October 2004, allowing for gas line builder-loan guarantees. That act should not to be confused with the Alaska Natural Gas Transportation Act of 1976, signed by Alaska's great friend President Jimmy Carter who gave away major concessions to Canada, laying the groundwork for the present circumstances.

The Persuasiveness of Petro Power Politics

U.S. Department of Energy Secretary Samuel Bodman chided the Alaska State Legislature in early July, urging them to conclude legislative and contractual work promptly or lose the opportunity to sell gas. "I strongly believe that the national interest is best served by a decision this summer on issues currently being considered by the state," during a second special session of the Legislature called to get things cracking.

Adding emphasis to jump-start action, he announced that no fewer than 15 bureaus and departments had signed off on an agreement to expedite project permitting. In an unprecedented Federal Interagency Memorandum of Understanding, executed by senior-most government executives, responsibilities relating to project approvals and providing for streamlined regulatory and environmental processes were defined and ordered.

But as if that weren't persuasion enough, none other than the vice president of the United States was called in to coach the Legislature. On June 27, Dick Cheney wrote: "The Government of the United States respectfully requests that the Alaska Legislature promptly enact legislation to facilitate construction and operation of the Alaska Gas Pipeline.... You are the governmental entity that holds the fate of the Alaska Gas Pipeline in your hands."

Cheney said to help meet national gas demands, President George Bush had directed the Secretaries of Energy, and State, with the Secretary of the Interior and the Federal Energy Regulatory Commission, to work closely with Canada and all other interested parties. Aye, there lies the rub.

Make a Run For the Border

With legal daggers at the ready, a furious battle simmers just beneath the surface of all the negotiating taking place to build the line. North Slope producers are at sixes and sevens with Enbridge Inc. and TransCanada as to who has the right to build the Canadian portion of the line. BP Canada, which employs 1,400 Canadians, claims it will be the prime builder and line owner in Canada, but TransCanada, citing a 30-year-old treaty with the U.S., says it holds rights to build and own the line in Canada. Opponents counter that the Carter treaty certified a far different line than the one envisioned today.

As for the U.S. portion, it runs only to the Canadian border and stops, no matter who builds it, while we await the outcome of Canadian actions. A pipeline by 2016? Doubtful.

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