Energy Biz - September/October 2008 - (Page 26) (Guest » Financial Front bringing Gas to the Lower 48 ALASKAN PiPELiNE NEEdEd By gOv. SARAH PALiN Thousands of Miles away froM OpiniOn) the heartland of America, Alaska readies itself for the next chapter of her resource-rich existence. While Americans look toward another winter, and consultants and experts debate the unfolding energy crisis, Alaska moves swiftly in preparing for its next role of providing Americans with not only a safe, secure, and domestic source of crude oil for U.S. consumers, but natural gas as well. Alaska’s potential to continue providing a safe, secure, and domestic source of energy is great, with enough known and recoverable oil and gas to make a difference in America. In fact, if you exclude every other source of fuel, Alaska has seven years’ worth of complete crude oil independence and an eight-year supply of natural gas for U.S. consumers. Alaskans have waited decades to see their natural gas resources developed and transported to waiting North American markets. Right now, we are actively working toward what would be the biggest construction project in the history of the United Alaska Gov. Sarah States — construction of a 1,715Palin speaks in front mile natural gas pipeline from the of an oil pipeline. North Slope to the TransCanada hub in Alberta, Canada. At this AGIA provisions Alaska demands in return for the very moment, we are encouraging development of capital match ensure that progress takes place. our trillions of cubic feet of natural gas, through a The AGIA provisions require TC Alaska to conduct unique and competitive process called the Alaska an open season within three years of receiving the Gasline Inducement Act (AGIA). Our state legislalicense. We have never been in a position to know tors overwhelmingly voted AGIA into law last year that before. Likewise, TC Alaska has committed to and they are back in special legislative session time lines regarding the filing for federal pipeline right now debating whether to award TransCanada certificates. These commitments are enforceable, so Alaska (TC Alaska) with a license to proceed with again they ensure that progress will be made. fieldwork and permitting. We believe our creative The investment also buys certain provisions that approach will help expedite delivery of our gas to protect Alaskans. Our current lease agreements satisfy this nation’s thirst for energy and provide allow for the resource developers to deduct translong-term stability with a domestic source. The portation costs from royalty payments. In order to gas line would deliver natural gas from state lands protect the value of our resources, we must be sure and would supply over 6 percent of the U.S. gas consumption, at 4.0 to 4.5 billion cubic feet per day. that the cost of transportation is not made unnecesTheoretically, Alaska’s 35 trillion cubic feet of known sarily expensive. Additionally, the AGIA protections guarantee a debt-to-equity ratio that results in a fair natural gas reserves could supply the entire 65 September/October 2008 billion cubic feet per day that Americans consume, and it would be able to do that nonstop for about a year and a half. As part of AGIA, the state of Alaska committed itself to investing up to $500 million in a capital match to the winning bidder of the Alaska license. If the legislators agree, that capital match will help TC Alaska reach its first open season. We believe this financial commitment provided under AGIA is an investment in our resources that will pay for itself directly as well as indirectly. The match is an investment in progress. The 26 E n E rgyB i z
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