Alaska must play hardball with gas.

AuthorHickel, Walter J.
PositionReprint

Editor's Note: This article was first published in the Anchorage Daily News on Nov. 27, 2005. Former Gov. Walter Hickel and the Anchorage Daily News have given Alaska Business Monthly permission to reprint the editorial column.

In the weeks ahead, Frank Murkowski has his greatest challenge and opportunity as Alaska's governor. The legacy issue, as he clearly recognizes, is how to produce and market Alaska's North Slope natural gas. There are tens of billions of dollars at stake. And beyond the revenues that can pour into Alaska's general and permanent funds, there is an even bigger issue.

Will this resource simply generate cash and dividends? Or will it be the key to a healthy and sustainable Alaska economy well into this century?

I faced a similar situation regarding North Slope oil and the trans-Alaska oil pipeline in 1969 and 1970. It required a showdown with the Exxon Corp. (then Humble Oil) because it didn't want an all-Alaska line.

Now, as then, we welcome the involvement of the producers. They have contributed greatly to Alaska. But while they negotiate on behalf of their stockholders, it is up to the governor to make sure that the real beneficiaries of these resources are the Alaska people. It's our land, won in our battle for statehood, and our gas.

If asked how to proceed, this is what I would recommend:

* Announce that there will be no more secret gas line negotiations. As North Slope gas is no longer stranded, all future discussions will be transparent and conducted in the full light of day.

* Tell the producers that we are going to develop our gas on our terms. Don't ask them what they will do. Tell them what they must do.

* Announce that in order for our gas to be used instate for the maximum benefit of our people, as mandated by our constitution, the state of Alaska will build an all-Alaska pipeline from Prudhoe Bay to Valdez.

* Explain that the state's 4 trillion cubic feet of royalty gas at Prudhoe plus Point Thomson's 8 trillion cubic feet are enough to make a gas line economic, and litigation is not required.

* Thoroughly examine the Alaska Gasline Port Authority proposal to build an all-Alaska line, which so far has been dismissed by this administration without a proper review. If the benefits to Alaska are as outstanding as I believe them to be, give them the go-ahead. This does not take legislative action. The governor can make the decision.

* If, however, the Alaska Gasline Port Authority...

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