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Knowles says ‘Help On the Way’ for Lower-48  
Date: December-05-2000


Alaska Gov. Tony Knowles said the United States must start work now to plan for the build ing of a pipeline to transport gas from Alaska’s Arctic region to market areas in the lower-48 states.

Knowles, the chairman of the Interstate Oil and Gas Compact Commission, made his remarks in the keynote address of the group’s annual meeting in San Antonio. He said Alaskan gas reserves are needed to help the nation meet its growing gas demand, expected to reach 30 trillion cf within the next decade.

"Alaskan Arctic gas has 36 trillion cf of proven reserves, the largest natural gas reserves in North America," he said. "There is an additional estimated 100 trillion cf yet to be discovered."

Knowles recently threw his support behind a new gas line to follow the so-called Alaskan Highway route, which was approved in the late 1970s and never built (GD 11/21). If it were built, the 1,700-mile pipeline, which is expected to be funded by the three major Alaskan producers — BP, Exxon Mobil and Phillips Petroleum — would be the largest single project ever undertaken by private industry, he said. At 4 billion to 5 billion cfd capacity, it would also dwarf other major international pipelines such as the recently opened 1.3 billion cfd Alliance Pipeline.

"Don’t worry America, help is on the way," he said. He estimated, however, that it will take from four and a half to five years, before North Slope gas can flow into the lower-48 market areas. The process of obtaining permitting and financing for the project will take at least one and a half years, with the actual construction of the line taking another three to four years.   "There is going to have to be an intermediate market resource," he said.

Knowles also restated his support for opening up a small portion of the Alaskan National Wildlife Refuge (ANWR) to oil and gas exploration efforts. The subject became an issue in the presidential contest, with Texas Gov. George W. Bush supporting limited exploration and Vice President Al Gore coming out strongly against any development in ANWR.

The Alaskan governor said he only supports exploration on the "most prospective" portion of ANWR, the coastal plain, "a small 1.5 million acre slice" in a refuge the size of the state of Indiana. "We need to have reasonable access to public lands. Without exploration, we will not succeed," he said.

The potential resource base is tremendous, he said. Point Thompson, located near ANWR, has gas reserves estimated at between 5-6 trillion cf. Studies by the U.S. Geological Survey suggest the Coastal Plain has oil reserves of several billion barrels, Knowles said.

He said the new presidential administration should follow the wishes of Congress, which voted to set aside the Coastal Plain as an area where the impact of oil and gas exploration should be studied. To date, however, no extensive studies have been undertaken and only a single test well has been drilled in the area, Knowles said.

In recent years, advances in drilling technologies, such as the use of horizontal drilling and the construction of ice roads, have limited the environmental impact of exploration and production efforts in the Arctic region. He added that the caribou herds only migrate to the Coastal Plain region once a year, at calving season, which takes place over several weeks in the summer.  Most drilling takes place in the winter so the caribou herd would not be impacted.

"The old paradigm of development vs. the environment is being replaced with development with the environment," Knowles said, adding that Alaska has some of the toughest environmental standards of any state or foreign country.

Knowles, a conservative Democrat, said he would work with the new president, whoever he is, to push for responsible development of Alaska’s vast hydrocarbon resources.

Reprinted from Gas Daily with the permission of the publisher, FT Energy, 1600 Wilson Blvd., Suite 520, Arlington, Va. 22209. For subscription information, phone 800-424-2908 or browse www.gasdaily.com. 







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