A Citizen’s Guide

The latest Capital squall, which hit this morning, is over comments by the Murkowski’s administration that indicate acceptance of a Mackenzie Valley natural gas pipeline being built before work begins on an Alaska project.

Chuck Logsdon, Murkowski’s oil and gas spokesman, said the projects need to be built one after the other to avoid competing for steel and labor.

“The timing for us would be good if Canada would start building their pipeline now,” he said. “Alaska would then be ready to go when they finish their project.”

The fact that the nearly 700-mile Mackenzie line will be completed first is not new; the producers have said that was their preference all along and Murkowski has said that scenario fits the state’s timeline.

But the comments from the administration have raised concerns among proponents of an all-Alaska pipeline route who complain waiting for the Mackenzie project to be finished could delay development of North Slope gas indefinitely. The Alaska Gasline Port Authority is the principal proponent of the all-Alaska route.

The Mackenzie line, which still faces land access issues with First Nation groups, is scheduled to be completed by 2011. That gives the major oil companies—BP, Exxon Mobil and ConocoPhillips—time to complete permitting and other preparatory work for the Alaska line, Logsdon said.

Logsdon said the timeline for building a 3,500-mile pipeline from the North Slope through Canada to markets in the Midwest includes four years for permitting. U.S. Sen. Ted Stevens told the Legislature on March 22 that the Alaska project would have to go through 44 months of federal pre-permitting and 18 months of federal permitting but that he would try to get that 62-month total shortened.

Overall, the oil companies say it will take about a decade from the moment they sign a fiscal contract with the state to complete the Alaska line.

“If the Mackenzie line is finished in 2011, then we could be done in 2015,” Logsdon said.

Jim Whitaker, mayor of the Fairbanks North Star Borough and chairman of the port authority, called Murkowski’s statements in favor of the Mackenzie line being built before an Alaska project “amazing news.”

Whitaker said the governor has always said he was acting in the best interest of the state and now it appears he’s decided to let the oil companies set the timeline for the Alaska project.

Jomo Stewart, with the port authority, said the danger is that the state could find itself locked in a long-term contract with the producers that prohibits alternative projects.

If the Mackenzie line is delayed, he said, it could tie up an Alaska project for decades.

“Alaska doesn’t even have the option to pursue another project because it’s locked into a long-term contract with the producers,” he said.

The Canadians are expected to know by the end of the year whether they can make the 2011 deadline.

Logsdon said the state will continue to pursue its project as expeditiously as possible.

Staff writer R.A. Dillon can be reached at (907) 463-4893 or rdillon@newsminer.com.