Some gas pipeline construction costs would fall to Alaska

The state would almost certainly have to pay for some of the construction of a gas pipeline from the North Slope to Cook Inlet to keep gas rates reasonable for Southcentral consumers, a legislative panel was told Monday.

"There will need to be some type of equity infusion or some type of subsidy based simply on the numbers of people we have and the construction costs we're looking at," said Dan Fauske, chief executive of the Alaska Housing Finance Corp.

Without a subsidy, the cost alone of transporting gas from the North Slope to Anchorage could be as much as two times higher than what Anchorage-area consumers are paying for natural gas now, according to a report submitted to Fauske's new agency, the Alaska Gasline Development Corp. And that shipping charge doesn't include the price that would be paid to producers for the gas itself or the add-on utility charges for getting the gas from the proposed pipeline into local homes and businesses.

Fauske and other state officials and contractors spoke Monday to an oversight meeting of the Legislature's bipartisan In-State Gas Caucus, chaired by Sen. Lesil McGuire, R-Anchorage. The large panel has senators and representatives mostly from the Railbelt region of Alaska.

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