A Citizen’s Guide

No waiting around for that 5 p.m. AGIA deadline! ConocoPhillips announced this morning they had submitted a proposal for a 4 bcf pipeline into Canada.

“ConocoPhillips is purposely presenting the State of Alaska with a choice; this proposal provides an alternative path forward for the ANS gas pipeline project which is, in our view, the most certain way to create a vibrant and successful development effort for this project.”

That’s from a summary of the proposal on Conoco’s Web site for the project. The site also has a press release, a letter to Gov. Palin, and a 115-page proposal with a fair amount of detail.

“Alternative path” means outside of AGIA. The company isn’t asking for any money from the state, as is offered under AGIA, and it’s asking for a few things that aren’t allowed in AGIA.

“[T]he ultimate realization of the project depends upon the establishment of natural gas fiscal terms that will apply to the shippers making long-term shipping commitments,” Conoco wrote, adding that it was prepared to work with the state to come up with those terms.

Conoco promised to support having the cost of pipeline expansions spread across all pipeline users rather than just those benefiting from the expansion — this was a big battle in Juneau — but only if the project raises tariffs by 5 percent or less. (Correct me if I’m wrong!) AGIA requires rolled-in rates for up to 15 percent.

There are probably other AGIA “must haves” that Conoco isn’t ready to accept, but overall, Conoco’s pitch is highly accommodating. The company promises to negotiate project labor agreements, have an Alaska project headquarters, and put money into training Alaska workers. It promises 6 in-state gas offtake points. (AGIA calls for 5; Murkowski’s deal, 4.)

Conoco publicly invited other entities to join in, and suggested a third-party pipeline builder might make sense, too.

The pipeline would run from the North Slope to the border of British Columbia and Alberta, with either new pipe, existing pipe, or expanded pipe getting the gas to Chicago. Transmission lines, a GTP, and the pipeline to the BC-Alberta border would cost between $19 and $32 billion, with a tariff of $2.30 to $4.80. Studies would start next summer and gas would be flowing by 2018.