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Witness Testimony
The Honorable Lisa Murkowski
Alaska Natural Gas Pipeline Status Report
" I'd like to thank Chairman Hall for holding this hearing today on the Alaska Natural Gas Pipeline. I do not exaggerate when I say that there is no more important issue to Alaska - and few issues of more importance to our country - than getting the necessary legislation through Congress to build the Alaska Natural Gas Pipeline. I hope that this hearing will be an important step in moving this critical legislation forward. " But, Mr. Chairman, I want to stress that this project is not just about Alaska - far from it. When we look at the issues facing our nation: 1) our national security in the post September 11 world; 2) the health of our national economy; 3) creating more jobs and; 4) achieving and maintaining a healthy environment for ourselves and our children these are all issues that affect every single one of our districts and states. And the reality is, natural gas from Alaska's North Slope has an important role to play in resolving each one of these major areas of concern. The Alaska Natural Gas Pipeline will: - enhance our nation security and freedom on foreign policy issues by providing a secure, domestic supply of energy; - provide a critical feedstock - at a reasonable price - for the chemical, agricultural and other important sectors of our economy. These industries are currently facing near catastrophic conditions including a dramatic loss of markets, plant closures and layoffs due to the high cost of natural gas; - create over one million new, well paying jobs spread across every state in our nation and; - provide an abundance of clean burning, environmentally friendly fuel. Mr. Chairman, I mentioned several important contributions the Alaska Natural Gas Pipeline can make to our nation's security, economic health and environment. Let me provide some more details about how the Alaska Natural Gas Pipeline will benefit America in each of these areas. First, some brief background. " During the 1990's United States natural gas production grew, on the average, less than 1% a year. At the same time, U.S. consumption grew at about 1.4% a year. By 2025 it is expected that total U.S. natural gas consumption will be about 35 Tcf or about 26% of all U.S. delivered energy consumption. Such a demand level represents over a 50% increase from the 2003 level. Domestic gas production is expected to increase much more slowly than consumption, rising from 19.5 Tcf in 2001 to 26.4 Tcf in 2025. Indeed, depletion rates for new gas wells have been increasing in recent years. It doesn't take an advanced degree to see that we will have a supply gap of almost 10 Tcf per year by 2025. Where will the supply to meet demand in 2025 come from? A portion from imports. Imports now contribute about 16% of our natural gas supply; by 2025 they are expected to contribute about 23%. Canada will be the main source of the imports with an important part of the increased Canadian imports coming from the MacKenzie Delta Pipeline and the Scotian Shelf in the offshore Atlantic. Just over half the increase in imports is expected to come from LNG. The remainder of our gas supplies must then come from increased U.S. production. The increased U.S. production is expected to largely come from two sources; unconventional sources like tight sands gas in the Rocky Mountain region and the large natural gas deposits known to exist in my State of Alaska. Interestingly, both conventional onshore non-associated production and conventional offshore non-associated production will increase between now and 2025, but their share of total U.S. production will ultimately decrease. Thus, gas from unconventional sources and our large natural gas reserves in Alaska are crucial if our nation is to meet the anticipated supply gap. " With that background, let me explain how building the Alaska Natural Gas Pipeline will help our economy, benefit our environment, create new jobs and enhance our nation's security. " Let=s start from a "macroeconomic perspective.@ We need reasonably priced energy to regain and sustain our economic growth. Chairman Greenspan clearly recognized this when he testified before Congress on several recent occasions concerning the very significant negative impact tight and expensive supplies of natural gas have on our economy. Further, studies have suggested that reasonably priced energy supplies are a crucial part of an effective policy of full employment. Indeed, periods of sustained economic growth in America have been characterized by stable or declining prices for energy. Examples abound of the importance of reasonably priced natural gas to our economy. Natural gas is a critical feedstock for much of our chemical industry; we=ve all seen the devastating impact recent high natural gas prices have had on this and related industries. It is also an important input in many manufacturing industries. Thus, assuring an adequate, reasonably priced supply of natural gas is crucial to preserving the well paying jobs in our manufacturing sector. " Further, an adequate, reasonably priced supply of gas will help the many other industries which rely on electric power to remain competitive in a global marketplace. The so-called Ademand destruction@ and movement of jobs overseas that is occurring because of tight and expensive gas supplies is all too apparent in many parts of our country. Finally, Alaska's natural gas will also help keep the rates consumers pay for power and to heat their homes low. Over 60 million Americans rely on natural gas to heat their homes. We need to assure these homeowners a reliable, reasonably priced supply of natural gas. A reasonably priced supply of gas will allow homeowners to devote a greater portion of their disposable income to other pursuits which will benefit the economy. " Alaskan natural gas is an also important part of our national environmental policy goals. Natural gas is the cleanest burning fossil fuel. As a so-called "premium fuel" natural gas can displace energy sources with higher emissions. Thus, using natural gas can help us achieve our clean air goals. It can also reduce environmental compliance costs for a number of industries, including the electric power sector. In fact, the great majority of planned new electric generating plants will rely on natural gas. It just makes plain good environmental sense to make sure these new generating facilities will have an adequate supply of gas. Indeed, this is part of the reason why the Alaska Gas Pipeline has the support of many environmental groups. " The job creation potential of building and operating the Alaska Natural Gas Pipeline is substantial and widespread. A recent study completed by the National Defense Council shows that the total number of new jobs created directly and indirectly from construction of the Alaska Natural Gas Pipeline could reach 1.1 million - a very substantial number of new jobs in an economy that has recently lost several million jobs. Let me focus on the new jobs that, according to the National Defense Council study, will be directly created by the pipeline construction in the home states of members of this Subcommittee; Texas will gain around 180,000 new jobs; Virginia about 4,500. In the west, California will gain over 100,000 new jobs, Arizona almost 3,000, Oregon around 7,500, Idaho about 3,000, Oklahoma over 14,000 and New Mexico about 2,000. In the Midwest, Missouri will add around 5,000 new jobs, Ohio around 8,700, Michigan about 8,000 and Illinois around 13,000. In the east, North Carolina will gain close to 6,000 new jobs, New York about 30,000, Maryland around 4,000, Maine nearly 700 and Pennsylvania gains over 45,000 new jobs. Finally, in the south, Georgia should add around 12,000 new jobs, Florida about 9,000 and Louisiana gains more than 12,000 new jobs. " It is also important to remember that these new jobs will generally be high-paying professional and trades employment. Jobs that families can count on; jobs they can build their futures around. The fact that the pipeline will generate higher income jobs for Americans has another beneficial impact. State governments should see additional revenues of about $1.7 billion a year while federal revenues should increase by about $1.1 billion a year. " Alaskan gas will provide a secure, stable, domestic source of supply that will enhance U.S. energy security. The value of this secure, domestic source of energy on our foreign policy options and national security cannot be overestimated. As I mentioned, imported LNG will be supplying an increasing amount of our natural gas needs over the coming decade. Much of this LNG will come from unstable regions of the world. Serious questions have been raised about whether some of the revenues we send to these regimes to pay for the energy finds its way into the hands of terrorist organizations. Further, we already import well over half our petroleum. Do we really want to be dependent on overseas sources for the majority of our natural gas as well? Building the Alaska Gas Pipeline will significantly diminish our need to import LNG and keep American dollars in the U.S. " Alaskans will also benefit from construction of the pipeline. The energy bill includes provisions allowing individual Alaskans, Alaskan Native Corporations and Alaskan owned corporations to have ownership opportunities in the pipeline. Alaskans will also have the opportunity to get jobs building the pipeline. Further, Alaskan industry and residential natural gas users, like other Americans, will benefit from the availability of this new natural gas supply. " Let me also remind everyone of the interest shown in this project by the private sector. A consortium of major producing companies, Conoco Phillips, BP Exploration and Exxon Mobile have filed applications with the State of Alaska to build the pipeline. TransCanada, a pipeline company with vast experience in the North American natural gas market and the holder of the existing U.S. and Canadian Alaskan Gas Pipeline construction certificates has indicated its intent to file for the necessary authorizations to build the pipeline in Alaska. Further, Enbridge, a Canadian company with extensive pipeline holdings in Canada has also announced it will file for the necessary governmental authorizations. Thus, there is no shortage of interest in the private sector on building this project. However, all these potential project sponsors have stressed the necessity of Congress enacting the regulatory and judicial streamlining and fiscal incentives in the energy bill in order for the construction of the pipeline to go forward. I urge you and the other Members of the House to continue to work with us to get final passage of an energy bill which includes this package of judicial, regulatory and financial incentives so that we can get this project going now. " Finally, proposals to build an Alaskan LNG project have been offered. The proposals contemplate building a pipeline from the Alaskan North Slope to Southcentral Alaska. A gas liquefaction facility would be constructed there and the North Slope gas would be transported as LNG to the West Coast markets in the Lower 48 states. Thus, there is no lack creative approaches to bring Alaska natural gas to market. " In conclusion, the Alaska Natural Gas Pipeline is one of those all too rare examples of a project that is a winner from every perspective. It will help us achieve our environmental goals; it will help our economy by creating a large number of new, well paying jobs and it will enhance our national security. " Mr. Chairman, I again thank you and this Subcommittee for inviting me to testify this morning on this critically important national project. I look forward to working with the House and my Senate colleagues to enact legislation bringing all the benefits of the pipeline to my constituents in Alaska and to our entire nation. Related Documents |
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