Senator McGuire Comments on the Alaska Pipeline Project’s Open Season Plan
(JUNEAU January 29, 2010) – Senator Lesil McGuire, R-Anchorage, today commented on the Alaska Pipeline Project’s open season plan with the U.S. Federal Energy Regulatory Commission (FERC). Next week, on February 1 at 3:30 PM, Senator McGuire will hear more details about the project’s open season plan at a meeting of the Senate Resources Committee, of which she is a co-chair.
“I’m glad the terms have changed since TransCanada originally presented its application,” she said. “I was very concerned with the fourteen percent rate of return on equity that was originally proposed. The improved commercial terms will reduce tariffs by $500 million per year and therefore the cost to transport gas in-state. Keeping the cost of gas in Alaska as low as possible has always been my biggest priority and I am encouraged by these new commercial terms.”
The Alaska Pipeline Project today gave its estimates on cost and product availability. It estimates that the North Slope to Alberta option will cost between $32 billion and $41 billion. The cost of the Valdez option is expected to be between $20 billion and $26 billion. Estimates indicate that the Alberta option will provide 4.5 billion cubic feet of natural gas per day and the Valdez option will provide 3.0 billion cubic feet per day.
“I remain concerned that the project still depends heavily on federal loan guarantees, which we haven’t seen terms for; that the project will require alignment among all the parties involved, two of whom are part of a competing pipeline proposal,” she said. “And finally, I am very concerned that the conditions attached to the precedent agreements made by shippers in the initial open season will require far-reaching changes at the state level.”
The open season begins May 1st, pending FERC approval. During the open season, Alaskans will learn what conditions the shippers want in order to ship their gas, where the markets are for the gas, and what the cost and size of the pipeline will be.
“Despite my concerns, I think the filing today to FERC by the Alaska Pipeline project is a positive step forward for Alaska and should be celebrated,” Senator McGuire said.Senator McGuire supported the Alaska Gasline Inducement Act (AGIA), which binds TransCanada to pursue a FERC permit that allows construction of the pipeline.