Energy

Gasline - As Governor, I will work to make Alaskans' long-time dream of a North Slope gas line a reality. I'll build on the work that's come before me to get natural gas resources to Alaskans and new revenues to state coffers. I will not waste time re-inventing Alaska's approach to bringing North Slope gas to market unless required to do so due to a failed pipeline "open season".

AGIA's (Alaska Gas Inducement Act) intent, to create competition to construct a gas pipeline on Alaska's terms, was laudable. In application it failed to receive a single fully qualified proposal. While Trans Canada is a well qualified pipeline company, they own no gas. The lack of multiple, qualified responses to the Request for Proposals (RFP) for an opportunity as big as Alaska, shows that the RFP needed to be reworked.

Sarah Palin wanted to declare political victory too soon. Adjustments to the RFP should have been made to address respondent's key objections. It is simply political spin to say AGIA caused the Denali pipeline project to happen. I believe the Denali project partners sincerely want to develop Alaska's North Slope gas but were frustrated by unworkable terms in AGIA.

That said, I won't go into office and re-invent the gas pipeline "wheel" yet again. I'm the type of leader who says: "Here's where we are, how do we successfully move Alaska forward?" My focus will be to bring an independent pipeline operator, Exxon, BP, Conoco Phillips, future producers, labor and conservation groups into one tent to get this project moving.

Gas to Alaskans - While commercializing North Slope gas is important for state revenues and for oil and gas producers' businesses in Alaska, there are immediate concerns facing Alaskans.

• Interior Alaska is struggling under burdensome electric rates and the high price of fuel oil. Interior residents need gas to heat their homes through very cold winters. A reliable long term gas supply also offers important industrial development opportunities in North Pole, Fairbanks and Delta. A spur line to Interior Alaskans is an absolute requirement of any gas line scenario.
• Southcentral Alaska is fast approaching potential gas shortages. Residents in Anchorage, MatSu and Kenai-Soldotna have grown to expect reliable gas supplies to heat their homes, generate electricity and power industrial and commercial activities. These supplies need to be replenished as soon as possible both through gas development on the Kenai Peninsula, but also by making North Slope gas available via a pipeline from the North Slope.
• Rural Alaska has suffered the most under recent high oil prices. Propane, butane and other LPGs must be made available to rural Alaska, in combination with a variety of alternative energy strategies, to safely diversify fuel supplies and lower the cost of living in Alaska's rural communities.

Any acceptable solution to commercializing North Slope gas must include immediate solutions to the energy problems facing Alaskans every day.

Gas Pipeline Routes - Two pipeline "open seasons" will be held in the summer of 2010. If there are inadequate commitments to ship gas either on the AGIA sponsored Trans Canada pipeline, or the Denali pipeline or conditions of the commitments are too restrictive, Alaska may need to find other feasible solutions to solving Alaska's immediate gas needs.

I believe Alaska should consider building an All Alaska Gas Hub similar to the so-called "Henry hub." Under this scenario the State of Alaska could consider investing in gas transportation infrastructure to bring gas from Prudhoe Bay to Fairbanks where other gas pipeline scenarios could easily connect. This would be similar to other transportation systems the state currently owns including the Railbelt Intertie, our in-state highway system, the Alaska Railroad, and the Marine Highway system.

This strategy would allow for the transportation of North Slope gas to a convenient connection point accommodating multiple projects to deliver gas whether to Interior Alaska, Southcentral Alaska, rural Alaska, Valdez, or Alberta. This strategy would also likely improve the economics of the projects envisioned under AGIA or the Denali project as well as the economics of a spur line to Fairbanks and a "bullet line" to Southcentral Alaska.

The State of Alaska has several strong financial tools including the Alaska Industrial Development and Export Authority and the Alaska Railroad which may help facilitate financing for this project. State ownership of this initial gas pipeline would also enable the state to assure that transportation charges are appropriate and are accurately accounted for.

Oil policy - As North Slope and Cook Inlet oil production continues to decline, it's more important than ever to encourage oil and gas exploration throughout Alaska. A full one third of Alaska's economy depends on the oil and gas industry. Keeping this sector of our economy vital is critical not only for Alaska's economy but also for our nation's security.

Oil taxes - ACES (Alaska's Clear and Equitable Share) has lived up to the State of Alaska's responsibility to manage our state's natural resources for the benefit of all Alaskans. Alaskans deserve as much compensation for their oil and gas as they can get while maintaining a sufficiently profitable business environment for the industry we need to extract it. I understand well how important this is for Alaskans - one third of our economy depends on the oil and gas industry and 85% of state revenues depend on it. As Governor I will uphold the responsibility to manage our state's natural resources for the benefit of all Alaskans. It is a great concern for our state that oil production is declining, and we need to look at all the causes of that and determine whether the right balance is being struck. As a guy formally trained in business, I know that companies will act in their shareholders' best interest, and as Governor I'll act only in Alaska's best interest. 

Offshore oil development - Offshore oil exploration and development should be encouraged in situations where it will not harm the environment or wildlife. We need to secure a reasonable share of royalties from offshore federal leases.

Fuel prices - It's wrong that Alaskans are paying some of the highest fuel prices in the nation when oil is produced and refined right here in Alaska. I believe lack of competition due to Alaska's relatively small market is the cause. While Alaska receives revenues from oil and gas production in the state, it also receives royalty oil.

Complicated legislative solutions to high fuel prices will likely prove ineffective. The State of Alaska can and should use our royalty oil to encourage competitive fuel prices for Alaskans while achieving a fair price for our resource. As Governor, I would support the state of Alaska contracting, based on a competitive bid, to have its royalty oil refined in Alaska and made available to fuel distributors based on a fair and predefined price markup. We should use this resource to establish real price competition for fuel in Alaska.

Renewable energy - Renewable energy is a key part of our future. Within a hundred mile radius of communities like Anchorage, Fairbanks, Kenai, and Juneau there are a rich array of energy alternatives. Alaska needs to begin now to actually develop energy resources such as hyrdo, tidal, geothermal, and wind to fuel our state.

As past head of the Alaska Energy Authority I worked on energy projects across Alaska ranging from small village power projects and bulk fuel facilities, to the sale of the Four Dam Pool hydroelectric plants to the communities these projects serve.

As Governor I will work to develop a newly diversified base of safe, affordable, and renewable energy resources for Alaska based on a plan we can agree on. Already wind energy projects are popping up across the state including Alaska's first large wind energy project located on Fire Island near Anchorage and there is real potential for a tidal energy project in the same location. And large hydro electric projects like Chakachamna may help reduce the Railbelt's dependence on gas.

We should begin now to develop a variety of standardized alternative energy projects right-sized for rural Alaska to reduce their dependence on diesel. Perhaps as important, as Alaska develops its expertise in developing sustainable energy projects for rural Alaska, we should be developing energy experts especially on projects of less than 5 mega watts. This technical expertise will likely have excellent application in areas like South America, Africa, and Asia. There's no reason Alaskan companies can't be the energy experts of the developing world.

Permanent Fund - I will ensure that Alaskans get our fair share from development of our resources. It's important that we do this to continue growing the Permanent Fund, so that present and future generations of Alaskans can benefit directly from resource development through the Permanent Fund Dividend. The Permanent Fund must be well managed and I'll ensure we have competent leadership there.