Alaska Gas Pipeline-No Longer a Pipe Dream

ALASKA GAS PIPELINE-NO LONGER A PIPE DREAM

Ms. MURKOWSKI. I thank the Chair.

Mr. President, we will soon begin debating the merits of the tax bill that will bring the United States into compliance with our World Trade Organization's obligations and assist domestic manufacturers. I understand this bill has been renamed the Jumpstart JOBS Act, referring to the number of manufacturing jobs that have been lost in the past few years, whether it is from businesses relocating their plants overseas, the outsourcing of jobs, or increased efficiency that does not require as much manual labor.

I believe that every Senator in this body wants to help those Americans who have been laid off to find new employment and to provide assistance to our domestic manufacturers that will lead to real job creation. But when we talk about job creation, too often this body overlooks a project that would produce those jobs for Americans, that would create jobs in all 50 States, and not just a few jobs but by at least one estimate we would create over 1 million jobs across the country.

Certainly, the number of jobs nationwide will at a minimum-at a minimum-be in the thousands, and that project I am speaking of is the construction of a natural gas pipeline from Alaska to the lower 48.

With the reality in mind that this project will lead to real job creation, I would like to speak to the body this morning about three very exciting announcements relating to the Alaska natural gas pipeline.

Three consortiums have filed applications to build a gas pipeline from Alaska's North Slope. These proposals would transport the 35 trillion cubic feet of known technically recoverable reserves to the starved markets in the lower 48. This would happen at a rate of roughly 4.5 billion cubic feet per day. Many believe there is upwards of 100 trillion cubic feet of natural gas on the North Slope and quite possibly more than that.

The first announcement from MidAmerican Energy Holdings Company, a major U.S. pipeline company and a subsidiary of Berkshire Hathaway whose chief investor is financier Warren Buffett. Partnering with MidAmerican will be Cook Inlet Regional Corporation and Pacific Star Energy, which is a consortium of Alaska Native corporations.

This is great news for Alaska, and it is great news for America. Individual Alaskans, Alaska Native corporations, and Alaska-owned corporations will have ownership opportunities in the pipeline under this proposal-this is good for Alaska's economy-and oversight of the main transportation project that will be used to move Alaska's commonly owned resources to market.

Rather than just benefit from the jobs and influx of short-term construction spending, as we saw during the construction of the Trans-Alaska pipeline, this represents a significant long-term benefit to individual Alaskans and their families.

Following MidAmerican's application, the three major producing companies in Alaska-ConocoPhillips, BP Exploration, and ExxonMobile-also filed an application with the State. These three companies hold the lion's share of the right to produce North Slope natural gas.

Late last week, a third group, which is the Alaska Gasline Port Authority, filed another application to build a pipeline. This third option proposes a liquefied natural gas project that would take natural gas from the North Slope, liquefy it at tidewater in south central Alaska for transport to the west coast markets in the lower 48.

In the end, the project that best meets the needs of Alaska and the markets will get built, but too often in our discussions we overlook the proposed LNG project in favor of the land route that goes through Canada. Two years ago, Alaska voters indicated their desire for construction of an LNG project, but we have to make sure the numbers make sense and the proposal is good for the State of Alaska.

I inserted language in the omnibus appropriations bill that provides the opportunity for the loan guarantees included in the Energy bill to be available for the LNG project option; that is, if the Secretary of Energy determines that it is the best project for purposes of this provision. It is something that needs to be proven by the project sponsors. Again, it demonstrates the need for passage of the Energy bill.

In the meantime, we have three applicants that are vying to build a gas pipeline along the Alaska-Canadian highway, with a possible spur to south central Alaska for an LNG project. They have come forward, put their names on paper, and they are willing to begin negotiations with the State. For all of these reasons, Alaskans are excited.

I need to back up and clarify. When the initial announcements were made about filing the applications, both MidAmerican and the producers stressed the need to enact the regulatory streamlining, the judicial streamlining, and the fiscal incentives that are currently contained in the Energy bill for the construction of a natural gas pipeline to go forward. There should be no misunderstanding about this; the provisions in the Energy bill relating to these issues must be enacted into law if we hope to see positive movement on this project.

These filings we have in place now in the State are not a guarantee that the project will be built. These applications represent the beginning of a dialog between the applicants and the State of Alaska, but no one should interpret these events to mean that we do not need to pass the Energy bill.

A cornerstone of our national energy policy is the production of Alaskan gas and delivery of the needed resources to markets in the lower 48. Members on both sides of the aisle recognize the benefit that Alaska gas means for America.

We have seen the volatility in the natural gas prices that had significant negative impacts on businesses and on families struggling to make ends meet and to keep their homes warm in the winter. The Alaska natural gas pipeline will bring welcome stability and a measure of predictability to the natural gas marketplace, as well as benefit consumers across the United States.

A couple of weeks ago, I had an opportunity to read an article by a gentleman by the name of Douglas Reynolds, an associate professor of oil and energy economics at the University of Alaska Fairbanks. Mr. President, you have read his book, I know, and have had good things to say about what he has written in the past. I have a copy of the article.

I ask unanimous consent that the article be printed in the RECORD immediately following my remarks.

The PRESIDENT pro tempore. Without objection, it is so ordered.

Ms. MURKOWSKI. Mr. President, Mr. Reynolds brought out the point, which I would like to emphasize, that providing the financial incentives for a natural gas pipeline is "like a futures contract to insure a more reliable natural gas supply source."

Then he went on to say:

Congress has the option to assure a future supply of Alaska gas at a reasonable price, and to get that supply on line sooner than markets alone will do it.

The effect would be to make Alaska's gas supply less reliant on NLG exporters with less chance for market manipulation.

To me, this just hits it right on the head. Consumers are facing increasing prices of natural gas. We have the opportunity to access a reliable supply of energy that will be produced under some of the most stringent environmental standards in the world and we can do it now, before we become dependent on foreign sources.

Douglas Reynolds and I are not the only ones who agree with this viewpoint. Recognizing the United States need for natural gas, the Federal Reserve Board Chairman Alan Greenspan testified before the Congress last year that natural gas supplies represent a "serious problem" to the national economy.

He noted U.S. policy with respect to natural gas is contradictory as we encourage consumption more than production. The chairman of the Energy and Natural Resources Committee, Senator Domenici, has worked diligently for more than a year to craft a bill that promotes many forms of renewable energy, encourages energy efficiency in the Federal Government and consumer products, increases the authorization of the low-income home energy assistance program, and moves us closer to construction of the Alaska natural gas pipeline.

To allay the major concerns of Members that led to the filibuster on the conference report on H.R. 6, the Senator from New Mexico has introduced a new Energy bill that has significantly less impact on the Federal budget. The new Energy bill streamlines the permitting process for the Alaska natural gas pipeline, expedites judicial review and provides for Federal loan guarantees and accelerated depreciation to lessen the cost of financing the project.

To those of my colleagues in the Senate who want to see this project built, who want to stop the rise of natural gas prices, who want to ensure a reliable supply of natural gas, who want to create hundreds of thousands of jobs across the country, I say pass this new Energy bill.

The fiscal and regulatory provisions in the Energy bill are a prerequisite to the construction of this project. The longer we wait, the longer we allow this important policy to remain caught in congressional gridlock, the more our economy is going to suffer. Senators should not accept the status quo when it comes to energy production. We should instead work to pass this Energy bill so we can tell the American people help is on the way, so we can begin to rationalize the energy markets, and so we can work to become less dependent on foreign sources of energy.

The Alaska natural gas pipeline will be the largest construction project of its kind ever completed. I believe the Federal Government should play a role in reducing the risk involved with this project, just as the Federal Government played a role in bringing affordable electricity to the South and to the Pacific Northwest.

The PRESIDING OFFICER (Mr. GRAHAM of South Carolina). The Senator's time has expired.

Ms. MURKOWSKI. The provisions in the Energy bill fulfill the Federal Government's role in bringing this pipeline to fruition.

I yield the floor.