Sunday, December 14, 2008

Throw out the AGIA

Build a short gas line to Valdez and sell liquefied natural gas (LNG) to the highest bidder. It's a capital idea sidetracked by the Alaska Gasline Inducement Act (AGIA). As the reality of AGIA sets in expect more calls like this one (LINK) from Alaska Gasline Port Authority board member Merrick Peirce (quote from Fairbanks News Miner):

"The Legislature should toss out AGIA as soon as it gets back in session, and it should get to work on the Alaska gas line. It is the only way Alaska can avoid economic devastation. If the Legislature refuses to change course, then legislators have the obligation to explain how they will replace declining state oil revenue. Do they prefer to end the dividend program first, then impose an income tax, or do they want to slash state spending and lay off state employees? What will that do to our economy?"
You know the old saying about all the eggs in one basket - Well the Canadian basket is getting pretty full - they got the $500Million inducement, they want billions in loan guarantees, the want a guaranteed high rate of return, and they can't promise regulatory approval anything built in Canada. It's going to get ugly before it gets better so hang on!

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