Hearing on Alaska Natural Gas Pipeline Proposals

Opening Statement of Chairman Bingaman

October 2, 2001
12:00 AM
Good morning. The purpose of the hearing is to receive testimony on the status of proposals for the transportation of natural gas from Alaska to markets in the lower 48 states and on legislation that may be required to expedite the construction of a pipeline from Alaska. The committee held a similar hearing on this topic over a year ago. Frankly, I had hoped that by this time, today’s witnesses would be discussing a commercial proposal and the state and federal governments would be actively working on legislation to expedite the pipeline construction. I am concerned that we have made very little progress in the past 13 months towards the goal of adding Alaska’s natural gas resources to our domestic energy supply. According to DOE, the gas reserves in the Alaska North Slope equal 20 % of the total gas reserves -both onshore and offshore - in the lower 48 states. Bringing this gas to market would have huge energy security benefits for the United States. In addition, it would be a multi-billion dollar construction project on the part of the private sector, requiring some 1200 to 1600 miles of steel pipe just to get from the North Slope to the hub in Alberta, Canada. The Arctic pipeline, plus the additional pipeline expansion needed to move the gas into end-use markets, will provide a tremendous economic stimulus for the US and Canada. And no matter what route it takes, a natural gas pipeline will bring substantial economic benefits to Alaska. I believe that we are at a critical energy security decision point today. Over the past year, interest in bringing liquified natural gas to the US has increased exponentially. With the planned reopening of two mothballed LNG terminals, expansions at existing facilities, and construction of new facilities, about 8 percent of our natural gas demand would be met with imported LNG in less than a decade. By inaction, we start down a path to increased import dependence on natural gas. thereby losing the Alaska natural gas forever. Without Alaska gas, the U.S. will end up importing more liquified natural gas from countries like Algeria, Qatar, Nigeria, and Indonesia. Once those LNG facilities are in place, the Alaska gas pipeline may never be economic. We will never be able to produce enough oil to be independent of the world oil market, but we have the potential to retain the security of a North American gas market. I believe we are at a critical energy security juncture here. It may be of interest to the members of this committee that this summer, 11 gas producing countries met in Tehran to plan a new OPEC for natural gas. As Chairman of this committee, I am prepared to develop legislation to streamline the regulatory approval process needed to move forward with the pipeline. This legislation would need to supplemented by a mechanism to reduce the financial uncertainty for the companies that undertake to build the pipeline; I am committed to working with the Finance Committee on that piece of the legislation. A pipeline transporting domestic natural gas reserves from Alaska to markets in the lower 48 states is a project that can provide real jobs across the country and in Canada; enable the US to meet the growing demand for natural gas; and prevent import dependence in the future.