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No to Alaska drilling for oil
Alaska governor pledges new strategy for gas line
Thu Jan 18, 1:48 AM ET
ANCHORAGE, Alaska (Reuters) - Alaska's new governor said on Wednesday she will introduce legislation to give any interested energy company or consortium the opportunity to compete openly for the right to build a massive natural gas pipeline from the state's North Slope region.
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Sarah Palin, a Republican who took office last month, said her approach contrasts with her predecessor's proposed gas pipeline deal that resulted from two years of secret negotiations with only the major North Slope producers.
"We need progress on a project and competition to result in the best project. We don't need endless discussions behind closed doors," Palin said in her first state of the state address delivered in Juneau.
The pipeline, a mega-project long proposed by Alaska officials, would provide a method of delivering the North Slope's proven reserves of about 35 trillion cubic feet of natural gas.
Plans for a gas pipeline date back to the early 1970s, before the existing trans-Alaska oil pipeline was built, but the gas project has been stymied for decades by high costs and poor economics.
Palin said former Gov. Frank Murkowski's proposed contract with BP Plc, ConocoPhillips and Exxon Mobil was too much of a giveaway to the oil giants and was rightfully rejected by lawmakers and the public.
The proposed legislation will replace the law that allowed Murkowski to engage in secret talks for a gas contract.
"We learned that under the old act, some producers will talk to us and talk to us and talk to us until we agree to their terms. But those terms were unacceptable," she said.
Her legislation will establish financial inducements -- including an unspecified but "substantial" state investment -- available to all qualifying sponsors. There will also be core requirements that must be met by any gas pipeline sponsor, Palin said.
In her speech, Palin also said she plans to beef up environmental enforcement at the North Slope oil fields.
She said the state has seen legal obligations ignored, a reference to widespread corrosion that caused spills and triggered a partial shutdown at the BP-operated Prudhoe Bay field.
"I won't tolerate corrosion eating through pipes while crippling our state economy through costly shutdowns," Palin said. "I'll establish a dedicated state team to ensure rigorous inspections and line-integrity analysis. Our oil must and will flow and continue to fund our essential services."
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