Publications

PREPARING FOR THE ALASKA NATURAL GAS PIPELINE:
Coordinating the Approach

Presented Oct. 14, 2009
To the Strategic Northern Infrastructure Symposium
Yellowknife, Northwest Territories

by Drue Pearce
Federal Coordinator,
Alaska Natural Gas Transportation Projects

SLIDE 1: COVER PAGE
THANK YOU FOR THE KIND INTRODUCTION AND BRENDAN FOR THE INVITATION TO BE HERE WITH YOU IN YELLOWKNIFE.
PREMIERS ARREAK, FENTIE AND ROLAND, SEN. MCGUIRE … THERE IS A LONG AND RICH HISTORY BETWEEN ALL OF US WHO LIVE IN AND CARE ABOUT THE NORTH AND WE ARE HERE FOR THESE TWO DAYS BECAUSE WE CARE ABOUT THE ECONOMIC DEVELOPMENTS PLANNED FOR NORTHERN CANADA.
AS AN ALASKAN, IT’S REWARDING TO KNOW THAT OUR TWO REGIONS HAVE SO MUCH IN COMMON, NOT ONLY OUR NATURAL GAS RESOURCES – THE MACKENZIE GASLINE PROJECT AND THE ALASKA PROJECT. BUT BEYOND GAS, YOU MIGHT KNOW THAT WE ALSO SHARE ICE ROAD TRUCKERS. CLICK
SLIDE 2: ICE ROAD TRUCKERS LOGO
FOR THOSE OF YOU NOT FAMILIAR, ICE ROAD TRUCKERS IS A REALITY SHOW ON THE HISTORY CHANNEL THAT CHRONICLES THE TREACHEROUS JOB OF DRIVING TRUCKS OVER FROZEN TERRAIN KNOWN AS ICE ROADS. CLICK
SLICE 3: ICE ROAD TRUCKERS COLLAGE
SEASONS 1 AND 2 FEATURED YELLOWKNIFE LEGENDS. SEASON 3, OF COURSE, FEATURED ALASKA DRIVERS AND ALASKA’S CARLYLE TRANSPORTATION DRIVING THE DALTON HIGHWAY TO THE OIL FIELDS AT PRUDHOE BAY.
THESE ARE MEN AND WOMEN WHO, I MIGHT SUGGEST, DO MAKE THEIR LIVING ON THIN ICE, AND I CAN HARDLY WAIT UNTIL THE SEASON BEGINS FEATURING TRUCKERS HAULING STEEL AND OTHER GOODS TO BUILD OUR NATURAL GAS PIPELINES.
SO, USING A PHRASE THAT A TRUCKER MIGHT USE, IT’S TURN AND BURN TIME FOR THIS PROJECT. I WANT TO TALK ABOUT THREE TOPICS TODAY THAT ARE RELAVANT. CLICK
SLIDE 4: OFC LOGO
AS FEDERAL COORDINATOR FOR THE ALASKA PIPELINE, MY OFFICE IS CHARGED WITH COORDINATING AND EXPEDITING THE WORK OF 24 PLUS FEDERAL AGENCIES – ALL OF WHICH HAVE ROLE IN PERMITTING THIS PROJECT – AS WELL AS WORKING WITH THE CANADIAN GOVERNMENT AND ALL THE STAKEHOLDERS FROM NATIVE GROUPS TO OUR FRIENDS IN THE ENVIRONMENTAL COMMUNITY.
SO TODAY, I’LL TOUCH ON: CLICK
SLIDE 5: OFFICE OF THE FEDERAL COORDINATOR
• WHAT’S GOING ON AT THE FEDERAL U.S. LEVEL AS WE PREPARE FOR THE APPLICATIONS FROM TRANSCANADA/EXXON MOBIL AND DENALI;
• I’LL SHARE HOW MY OFFICE COLLABORATES WITH CANADA’S REGULATORY AGENCIES AND ORGANIZATIONS TO EXPEDITE THE PROCESS; AND,
• I’LL BRIEF YOU ON OUR WORK WITH THE STATE OF ALASKA TO MOVE THIS PROJECT ALONG.
MY JOB AS THE FEDERAL COORDINATOR IS TO IDENTIFY AND DEVELOP POTENTIAL REGULATORY BOTTLENECKS AND EXPEDITE REGULATORY APPROVALS.
WE ARE EXPEDITIOUSLY MOVING FORWARD. CLICK
SLIDE 6: TRANS CANADA AND DENALI LOGOS
FIRST, IN THE COMING MONTHS, AS TRANSCANDA/EXXON MOBIL AND DENALI PREPARE THEIR PACKAGES FOR “OPEN SEASON,” WE’RE WORKING WITH BOTH PROJECTS AND THE U.S. FEDERAL AGENCIES TO IDENTIFY GAPS AND SIMPLIFY THE PERMITTING PROCESS.
TO DO THIS, THE OFC IS DEVELOPING IMPLEMENTATION PLANS FOR BOTH APPLICANTS THAT WILL BE THE ROADMAP FOR EACH COMPANY TO FOLLOW AS THEY HEAD THROUGH THE PERMITTING PROCESS. WE KNOW THAT EARLY COORDINATION MEANS ADOPTING A PROJECT MANAGEMENT APPROACH BASED ON A COMMON UNDERSTANDING AND COMMITMENT TO THE PERMITTING PROCESS.
THE IMPLEMENTATION PLANS WILL ALLOW US TO DO JUST THAT. AND, ON THE FLIP SIDE, THEY WILL ALLOW US TO MAKE SURE THAT ALL FEDERAL AGENCIES COMPLY WITH THE FEDERAL LAW THAT GOVERNS THIS PROJECT.
WE’VE COMPLETED THE FIRST PHASE OF DENALI’S PLAN AND ARE WORKING ON THE FIRST PHASE OF TRANSCANADA/EXXON MOBIL’S. CLICK
SLIDE 7: OFC PROJECTS
WE’RE ALSO DRAWING AN OVERALL PICTURE OF THE PERMITTING PROCESS… A PERMITTING MATRIX…. SO THAT ALL AGENCIES AND BOTH COMPANIES HAVE AN ORGANIZED FRAMEWORK TO REVIEW AND ISSUE PERMITS AND AUTHORIZATIONS.
WE’VE PULLED TOGETHER A TECHNICAL REVIEW TEAM TO DISCUSS AND SHARE ENGINEERING INFORMATION AND EXPERTISE RELEVANT TO CONSTRUCTION OF NATURAL GAS PIPELINE PROJECTS IN THE ARCTIC. THE TEAM INCLUDES REPRESENTATIVES FROM FEDERAL AND STATE AGENCIES.
ALSO ON OUR ‘TO DO’ LIST IS THE DEVELOPMENT OF A PROTOTYPE GEOGRAPHIC INFORMATION SYSTEM FOR A PORTION OF THE PIPELINE ROUTE.
AS YOU KNOW, THE ARCTIC IS NOT WELL MAPPED. IN FACT, THERE’S NO ACCESSIBLE STANDARD SET OF MAPS AND DATA FOR THE PIPELINE ROUTE.
BUT BY THE END OF THE YEAR, WE’LL HAVE INFORMATION ON A 20-MILE STRETCH OF THE ROUTE AT ATIGUN PASS LOADED INTO THE PROTOTYPE THAT WILL ALLOW USERS TO CLICK ANY POINT ALONG THAT STRETCH OF THE PIPELINE AND PULL UP A RANGE OF EXISTING DATA INCLUDING DOCUMENTS, STUDIES AND RESEARCH FROM PRIVATE SECTOR AND GOVERNMENT SOURCES, AND VIEW RELEVANT MAPPING AND REPORT DATA. CLICK
SLIDE 8: GIS PROTOTYPE
THE PLAN IS TO GIVE EVERY AGENCY AND THE PUBLIC INVOLVED IN THE PIPELINE PROJECT USE OF THE SAME GEOSPATIALLY REFERENCED BASELINE DATA THAT SHOWS INFORMATION SUCH AS FAULT AND LANDSLIDE HAZARDS, WETLANDS AND STREAM CROSSINGS. IT ALSO WILL HELP WITH ANALYSIS OF CLIMATE CHANGE IMPACTS ALONG THE PIPELINE CORRIDOR.
IF THE PROTOTYPE IS USEFUL, WE’LL EXPAND IT FOR THE ENTIRE ALASKA ROUTE AND WE HOPE CANADA WILL DO THE SAME FOR ITS PORTION OF THE LINE.
THOSE ARE SOME OF THE PROJECTS ON OUR PLATE FOR THE NEXT SIX MONTHS. CLICK
SLIDE 9: COORDINATING WITH CANADA
PARALLEL TO THE WORK WE’RE DOING ON THE U.S. SIDE IS THE WORK AND THE ENERGY DIALOGUE WE’RE HAVING WITH OUR PARTNERS IN CANADA.
I DO WANT TO TAKE A MOMENT AND RECOGNIZE MINISTER BOB MCLEOD WHO HAS ALWAYS WORKED HARD ON BEHALF OF THE CITIZENS OF THE NORTHWEST TERRITORIES. HE AND I HAVE FOUND OURSESELVES ON THE SPEAKING CIRCUIT TOGETHER, MUCH LIKE BRENDAN BELL AND I DID FOR YEARS. THEY BOTH ARE GREAT ADVOCATES FOR THE NORTH.
I MEET WITH LEADERS ACROSS CANADA REGULARLY AND KNOW THAT OUR RELATIONSHIPS ARE ONES THAT WILL MAKE OUR RESPECTIVE PIPELINE PROJECTS HAPPEN. EARLY RESOLUTION OF ANY CROSS-BORDER ISSUES IS CRUCIAL TO THE PROJECT.
FOLLOWING ADMINISTRATION MEETINGS IN SEPTEMBER IN WASHINGTON, DC BETWEEN OUR TWO COUNTRIES ON ECONOMIC AND BILATERAL ISSUES, I WENT TO OTTAWA FOR A SERIES OF MEETINGS. I CAN TELL YOU THAT THE U.S. EMBASSY HAS A VERY HIGH LEVEL OF INTEREST IN ARCTIC GAS PIPELINES LIKE THE MACKENZIE GASLINE AND ALASKA NATURAL GAS PROJECTS AND IS VERY ENGAGED IN BRINGING THE ALASKA GAS PIPELINE TO FRUITION.
MY GENERAL COUNSEL AND I MET WITH MINISTERS PRENTICE AND RAITT ON PIPELINE ISSUES. WE MET WITH PHIL JENNINGS AND HIS STAFF AT THE MAJOR PROJECTS MANAGEMENT OFFICE [MPMO], OUR COORDINATING AGENCY COUNTERPART FOR THE DENALI PROJECT IN CANADA. WE SPENT TIME WITH PETER SYLVESTER, PRESIDENT OF THE CANADIAN ENVIRONMENTAL ASSESSMENT AGENCY (CEAA), TO DISCUSS TIMELINES, PROCEDURES AND CONSULTATION PROCESS WITH US, AND WE MET WITH DEPUTY MINISTER CASSIE DOYLE AT NR CANADA.
AS I MENTIONED EARLIER, WE’RE CREATING A TECHNICAL REVIEW TEAM TO DISCUSS AND SHARE ENGINEERING INFORMATION AND EXPERTISE RELEVANT TO CONSTRUCTION OF ARCTIC NATURAL GAS PIPELINE PROJECTS. WE HAVE INVITED THE NEB, NPA AND MPMO TO PARTICIPATE.
THE US FEDERAL ENERGY REGULATORY COMMISSION'S [FERC] SCHEDULE TO COMPLETE THE ENVIRONMENTAL IMPACT STATEMENT IS AMBITIOUS, AND WE DISCUSSED THE CANADIAN GOVERNMENT’S PLEDGE TO PARALLEL THE FERC SCHEDULE FOR THE PROJECT'S 1000 MILES IN CANADA.
PRIOR TO MY VISIT, MY DIRECTOR OF PERMITS, SCHEDULING & COMPLIANCE AND OUR ENVIRONMENTAL ENGINEER VISITED WITH SENIOR STAFF WITH TRANSCANADA/EXXON MOBIL, DENALI CANADA AND CANADA’S NATION ENERGY BOARD IN CALGARY, CANADA.
IN MEETINGS WITH THE COMPANIES, THEY WORKED THROUGH SOME OF THE DIFFERENCES IN EACH APPLICANT’S PLAN. FOR EXAMPLE, TRANSCANADA/EXXON MOBIL IS OFFERING A VALDEZ TERMINUS FOR LIQUEFIED NATURAL GAS (LNG) OPTION DURING ITS OPENS SEASON NEXT YEAR, AND DENALI IS NOT. WITH AN LNG OPTION, ADDITIONAL PERMITS MAY BE REQUIRED FOR FACILITIES IN VALDEZ.
IN TALKS WITH DENALI CANADA SENIOR STAFF, THEY DISCUSSED THE LICENSING AND CERTIFICATION APPLICATION PROCESS THAT WILL BE HANDLED BY THE MPMO. WITH TRANSCANADA/EXXON MOBIL SENIOR STAFF, THEY DISCUSSED DETAILS FOR THE FIRST PHASE OF ITS IMPLEMENTATION PLAN. AND, FINALLY, THEY VISITED SENIOR STAFF OF THE CANADA’S NEB TO REVIEW ITS EXPERIENCE IN PERMITTING/EVALUATING ARCTIC CONSTRUCTION PROJECTS. CLICK
SLIDE 10: RIGHTS-OF-WAY
ON BOTH SIDES OF THE BORDER, WE WILL NEED TO WORK THROUGH ISSUES PERTAINING TO THE PIPELINE RIGHTS-OF-WAY.
IN ALASKA, THIS PIPELINE WILL TRAVERSE 750 MILES ALONG FEDERAL, STATE, PRIVATE AND NATIVE ALLOTMENT LANDS.
ON THE CANADIAN SIDE, THE ROUTE IS NEARLY 1,000 MILES LONG. TRANSCANADA, THROUGH ITS CANADIAN SUBSIDIARY FOOTHILLS PIPELINE COMPANY, BELIEVES IT ALREADY HOLDS MOST OF THE ACCESS RIGHTS AND CERTIFICATES NEEDED TO BUILD THE PIPELINE IN CANADA BY VIRTUE OF ITS APPROVALS UNDER THE 1978 NORTHERN PIPELINE ACT. THE NORTHERN PIPELINE AGENCY WILL PROCESS TRANSCANADA’S UPDATED FILING. CLICK
SLIDE 11: PIPE IN GROUND
THE OTHER APPLICANT, DENALI, ALSO PLANS TO APPLY FOR RIGHTS-OF-WAY ALONG THE ALASKA HIGHWAY CORRIDOR THROUGH CANADA VIA THE NEB PROCESS.
CANADA’S MAJOR PROJECTS MANAGEMENT OFFICE WILL OVERSEE DENALI’S APPLICATION PROCESS.
THE LAST ITEM I WANT TO TOUCH ON IS ALASKA’S NEW GOVERNOR AND HIS COMMITMENT TO THE GAS PIPELINE PROJECT. I KNOW THERE’S A LOT OF INTEREST AND SOME CONCERN HERE ABOUT HOW THE CHANGE IN LEADERSHIP IN ALASKA COULD AFFECT THE PROJECT, BUT OUR WORKING RELATIONSHIP WITH THE GOVERNOR AND THE DEPARTMENT OF NATURAL RESOURCES HASN’T CHANGED, AND NEITHER HAS ALASKA’S COMMITMENT TO THE PROJECT. CLICK
SLIDE 12: GOV. PARNELL WITH SEC. SALAZAR + DELEGATION
THE GOVERNOR AND HIS ADMINISTRATION ARE COMMITTED TO WORKING WITH SEC. OF THE INTERIOR SALAZAR AS WELL AS WITH OUR CONGRESSIONAL DELEGATION TO ENCOURAGE JOBS AND ECONOMIC GROWTH VIA THE PIPELINE, AND HE’S BEEN VERY PUBLIC ABOUT THAT.
MUCH LIKE IN CANADA, THERE ARE TWO SEPARATE PROCESSES MOVING FORWARD IN THE STATE OF ALASKA. IN 2007 THE ALASKA LEGISLATURE PASSED THE ALASKA GASLINE INDUCEMENT ACT, THROUGH WHICH TRANSCANADA ALASKA BECAME THE LICENSEE FOR THE PROJECT IN A FINANCIAL AGREEMENT WITH THE STATE.
ALTHOUGH TRANSCANADA AND THE STATE ARE FINANCIAL PARTNERS, THE STATE PERMITTING AGENCY – THE DEPARTMENT OF NATURAL RESOURCES – CONTINUES TO WORK ON BOTH THE TRANSCANADA/EXXON MOBIL AND DENALI PROJECTS.
THE OFC IS ALSO DEVELOPING A SURVEILLANCE AND MONITORING AGREEMENT WITH ALASKA, WHICH WILL LAYOUT THE PROCESS FOR WORKING TOGETHER FROM THE PERMITTING PHASE OF THE PROJECT THROUGH CONSTRUCTION.
THERE ARE SOME ISSUES THAT STAND BEFORE US. CLICK
SLIDE 13: INFRASTRUCTURE AND LABOR
IN ORDER TO CONSTRUCT A MAJOR PIPELINE, IT IS IMPERATIVE TO HAVE THE NECESSARY INFRASTRUCTURE IN PLACE TO STAGE PERSONNEL AND MATERIALS FOR CONSTRUCTION.
IN BOTH ALASKA AND CANADA, THE PROJECT APPLICANTS ARE TALKING TO THE APPROPRIATE AGENCIES ABOUT WHAT BRIDGES, HIGHWAYS, AIRPORTS, MATERIAL SITES AND MAINTENANCE CAMPS WILL BE NEEDED TO SUPPORT TENS OF THOUSANDS OF WORKERS, HEAVY EQUIPMENT AND THE 2.5 MILLION TONS OF STEEL TO CONSTRUCT THE PIPELINE.
IN THE UNITED STATES IT TYPICALLY TAKES 4-6 YEARS TO COMPLETE THE MAJOR INFRASTRUCTURE PROJECTS AND MOST OF THEM MUST BE DONE BEFORE PIPELINE CONSTRUCTION CAN BEGIN. SO ADDRESSING THIS ISSUE DEMANDS EARLY ATTENTION.
IN ADDTION TO INFRATRUCTURE, THIS PROJECT WILL EMPLOY TENS OF THOUSANDS OF WORKERS WITH GOOD PAYING, GREEN JOBS AND WILL CREATE ITS OWN ECONOMIC STIMULUS FOR OUR RESPECTIVE ECONOMIES. CLICK
SLIDE 14: FEDERAL SUPPORT
THERE’S GOOD WILL AND GOOD SUPPORT FOR IT, INCLUDING FROM THE AFL-CIO WHO RECENTLY ENDORSED THE PROJECT AT ITS ANNUAL CONVENTION AND FROM PRESIDENT OBAMA WHO HAS CHALLENGED AMERICA TO COME UP WITH GREEN ENERGY IDEAS THAT WILL TAKE US INTO THE FUTURE.
DECISIONS MADE ON ENERGY IN THE NEXT TWO YEARS WILL HAVE PROFOUND IMPACTS FOR YEARS TO COME, SO IT’S ESSENTIAL THAT WE CONTINUE TO HAVE THE PRESIDENT’S SUPPORT AS WELL AS THE CONGRESS AS ENERGY AND CLIMATE CHANGE LEGISLATION IS CONSIDERED.
I THINK THAT YOU’LL AGREE WITH ME THAT THERE IS AND ALWAYS WILL BE INDUSTRIAL AND CONSUMER DEMAND FOR ENERGY. ONLY NOW, WE ARE DEMANDING THAT SOURCE OF ENERGY NOT ONLY BE RELIABLE AND AFFORDABLE, BUT THAT IT BE CLEAN AND ENVIRONMENTALLY FRIENDLY. CLICK

SLIDE 15: OFC CONTACT INFORMATION
THE OFC KNOWS THE ALASKA NATURAL GAS PIPELINE CAN SUPPLY THE RESOURCES TO HELP MEET THAT GROWING DEMAND AND SO DO OTHERS, EVIDENT BY THE FOUR GLOBAL ENERGY COMPANIES NOW VYING TO BUILD THIS PIPELINE.
FINALLY, THIS PIPELINE REPRESENTS ENERGY AND ECONOMIC SECURITY FOR NORTH AMERICA. IT WILL BE GREAT FOR THE ECONOMY, FOR THE ENVIRONMENT, AND IT'S GREAT FOR NORTH AMERICA.
I AM OPTIMISTIC THAT IT WILL BE BUILT IN PART BECAUSE OF THE BENEFITS IT WILL BRING BUT ALSO BECAUSE OF THE VERY STRONG WORKING RELATIONSHIP THE PROJECT IS HELPING US BUILD BETWEEN THE UNITED STATES AND CANADA. I AM PROUD TO BE ABLE TO CONTRIBUTE TO THAT RELATIONSHIP, TO COUNT ON IT, AND I’M DELIGHTED TO BE TOGETHER WITH ALL OF YOU HERE TODAY.
THANK YOU.

Attachments: 

Full Presentation

Arctic Oil and Gas in Today’s North American Energy Equation
The Canada Institute and the Global Energy Initiative
of the Woodrow Wilson International Center for Scholars
Washington, D.C.
June 24, 2009

SLIDE 1: Introduction Page
Good Afternoon—Thank you to the Canada Institute and the Global Energy Initiative of the Woodrow Wilson International Center for having me join Minister McLeod to discuss the need for Arctic gas. The Alaska natural gas pipeline project and the Mackenzie Gasline Project are two exciting North American projects natural gas pipelines that will provide benefits to both Americans and Canadians.
The timing of this speech is perfect. The Alaska project is in the news. We have two great companies competing to build the project, Denali and TransCanada. And, just two weeks ago ExxonMobil announced they are partnering with TransCanada to build the project.
As many of you may know, one of the largest known reserves of natural gas in America sits in Alaska’s Arctic, associated with the development of oil at Prudhoe Bay. The 35 trillion cubic feet of proven natural gas reserves will make a significant long-term contribution to the United States’ energy supplies. Since the late 1990’s, the State of Alaska, the three major North Slope Producers, TransCanada, both the U.S. and Canadian federal governments and many stakeholders have been pondering whether now is the time when construction of the gasline is economically feasible. CLICK

SLIDE 2: ANGTA
I think it is important to begin with a brief history about our federal laws governing the gas pipeline project.
While TAPS, the large oil pipeline from Prudhoe Bay to Valdez, was being constructed, plans were initiated to build a large diameter pipeline to deliver the associated natural gas to the lower 48. Congress enacted the Alaska Natural Gas Transportation Act and President Carter designated the route, design and project sponsors for construction of the pipeline.
The southern portions of the pipeline, shown in light green on this map, are known as the “pre-build” and went into operation in 1981-1982. The northern portion, shown in dark green, would link North Slope gas to the pre-built legs. Foothills Pipe Line Ltd, now a subsidiary of TransCanada, is the legacy owner and operator of the pre-build legs. The northern portion is the route of the pipeline that has remained an elusive target but irresistible dream to Alaskans. CLICK

SLIDE 3: ANGPA
There have been countless proposals to market North Slope gas since its discovery. The latest effort led to Congress passing the Alaska Natural Gas Pipeline Act, known as ANGPA in 2004. That statute created my office, the Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects, and encouraged the expeditious approval, construction, and operation of a natural gas transportation project for delivery of North Slope gas to U.S. markets. CLICK
SLIDE 4: North Slope to Alberta and Beyond: Pipeline Proposals
There are currently 2 mainline project proposals.
Denali—The Alaska Gas Pipeline, is a joint venture of ConocoPhillips and BP. They opted not to engage in the State’s licensing process. Instead, they developed a competing project. Denali entered the formal Pre-filing Process with FERC and they filed a Right-of-Way application with the DOI Bureau of Land Management. In December 2008, they submitted a detailed “Field Study Plan” to the FERC docket. The plan includes a resource data gap analysis that examined the public and private information that was produced over the past ten years and provided information regarding Denali’s ongoing and future collection of environmental and cultural resource data. Denali intends to begin its Open Season in 2010.
TransCanada Alaska is the State’s licensed partner. They engaged U.S. federal agencies on a number of fronts. They entered the Pre-filing Process with the Federal Energy Regulatory Commission in May, filed a Right-of-Way application with the DOI Bureau of Land Management, and are undertaking preliminary feasibility and routing studies. TransCanada intends to complete its initial Open Season in July 2010 and anticipates that their application to FERC will be deemed complete in October 2012. They recently announced that ExxonMobil will partner with them to build the project.
It is important to note that the State of Alaska license does not grant an exclusive right to land use and right-of-way permits at the State level. Nor is there an exclusive right at the federal level. CLICK

SLIDE 5: President Obama
The Obama administration recognizes the need for an Alaska natural gas pipeline. The President recognizes that the pipeline can increase America’s energy security, create jobs, and help bring clean natural gas to domestic U.S. markets. CLICK

SLIDE 6: What is the Role of the OFC
My job as Federal Coordinator is to advance the approval, consultation and safe operations of the project by ensuring coordination, compliance and oversight, as well as information dissemination. We are headquartered in D.C. and opened our Alaska field office earlier this year. Just last month, I hired Admiral Tom Barrett to be the head of the Anchorage office as my Deputy Federal Coordinator. I am pleased to have him aboard. He comes to my office from the Department of Transportation where he served as the first Administrator of the Pipeline Hazardous Materials Safety Administration and most recently as the Deputy Secretary of the Department. His last job this spring at the DOT was to coordinate the Department’s efforts to distribute stimulus funds.
We have begun negotiations with the State of Alaska on a joint Monitoring and Surveillance Agreement to oversee design and construction of the project.
Expedience is crucial to the success of the project this large. Delays and unwarranted stipulations will add unnecessary costs to the project and could result in its being uneconomic.
We are required to conduct compliance and oversight reviews to ensure that no federal agency attaches any term or condition not required by law that may impair or prevent progress of the projects. We are mindful, of course, of our responsibility to ensure the pipeline is constructed in an environmentally responsible and safe manner.
SLIDE 7: Federal Agencies
Coordination among the various U.S. federal and State and Canadian federal, provincial and territorial agencies is critical to the successful and expeditious construction of the project. Just in the U.S. there are at least 22 federal agencies that have a role to play. Keeping track of these agencies and their responsibilities is a full-time job.
Given the magnitude of the project it is essential to our collective the success that coordination, oversight and communications are effective and efficient. CLICK

SLIDE 8: Recent Developments
I’m pretty sure Congress didn’t envision the competitive process that has evolved. The good news is that both Denali and TransCanada are excellent candidates and bring unique strengths to the project. The competition has spurred fast moving developments.
My office is responsible for consolidating agency Implementation Plans. These Plans will be written in phases. The project Consolidated Implementation Plan is part of my mandate to streamline the process of pipeline permitting for the major North American pipeline infrastructure project.
On June 10, I released the First Phase Consolidated Implementation Plan specific to Denali. This first phase plan relates to permitting the project and identifies 22 attention items and the roles of all the U.S. federal agencies involved in the project. The plan serves as a tool to identify potential conflicts or gaps between agencies and opportunities for cooperation.
The OFC is now working on a separate First Phase Plan for the TransCanada Alaska project. Also, as I mentioned earlier, TransCanada entered into a partnership with ExxonMobil two weeks ago to construct the Alaska gas pipeline project and associated infrastructure. ExxonMobil’s active engagement as a full participant is a major development. They are the final major North Slope gas producer to enter the project competition.
It’s terrific that companies of the caliber of ExxonMobil, BP, ConocoPhillips and TransCanada are now engaged actively with this project. Their participation points out the underlying value of bringing North Slope gas to North American markets.
The U.S. and Canadian federal governments see the need for streamlined process for major projects like this one. On the U.S. side, Congress created my office. While in Ottawa a few weeks ago, I learned that the Canadian government plans to have the Northern Pipeline Agency process the TransCanada project and the Major Projects Management Office process the Denali project. The goal of the NPA and MPMO is to ensure there is a strong project management approach resulting in clarity, predictability and efficiency without compromising its environmental effectiveness. I am pleased the government has chosen to go in this direction for the Alaska project.
This project will cross 1,715 miles of Alaska, the Yukon, British Columbia and Alberta. It will create thousands of opportunities in both the United States and Canada for jobs and business as well as establishing a long term supply of clean energy for North America.
Only one pipeline will be built. While there are two serious competing projects at this time, it is obvious that some sort of merger will likely take place – the question is when and what will it look like on each side of the border. CLICK

SLIDES 9 TO 24: Permafrost Map Slide Show
As we talk about progress on the pipeline, I think it is also important to talk about one of the most interesting issues facing both Canada and the U.S. governments, climate change. The climate in the Arctic is changing. It is important that we understand permafrost changes and other effects climate change may have on the pipeline after its construction.
Permafrost trends must be incorporated into the design of a pipeline so it will last 30-50 years. We assume that areas of solid permafrost will be displaced by discontinuous permafrost as change progresses. The University of Alaska, State of Alaska Geophysical Surveys, and U.S. Geological Survey have been working together to map and model the change.
On the screen is a model that demonstrates the range of permafrost in Alaska from 1950 to today and how it is forecast to shift by 2100. The areas in red are permafrost free and as you look further north the colors shift to light blue and dark blue areas – the darker the blue, the colder the ground temperature. Watch what is forecast to happen. CLICK

(PAUSE while slide show runs)

SLIDES 25 TO 35: Permafrost Maps One More Time – 2000-2050
I am going to play the map one more time showing you the map from 2000 to 2050. This time, we look at the forecast change every 5 years. CLICK

(PAUSE while slide show runs) CLICK

SLIDE 36: Economics
There has been a lot of discussion recently about the economics of the Arctic pipelines. Here are a few issues that will play important roles in the pipelines success.
The eventual builder is expected to secure the financing from the private sector. Congress authorized a loan guarantee of up to $18 billion in 2004 dollars that will be adjusted for inflation to support the project. They are now considering an increase in that guarantee to $30 billion. The loan guarantee is likely to be an essential piece of the financial puzzle. CLICK

SLIDE 37: Infrastructure
Second, before constructing a pipeline, it is imperative to have the necessary infrastructure in place to stage all the manpower and materials for construction. In both the U.S. and Canada, we need to either upgrade or build new bridges, highways, airports, material sites and maintenance camps to support tens of thousands of workers, the heavy equipment and the 2.5 million tons of steel needed to construct the pipeline. The latest estimate outlines at least a $1 Billion in projects just in Alaska. The State of Alaska may utilize part of its Stimulus package funding to begin these critical upgrades this year.
It will take 4-6 years to complete the major infrastructure projects necessary to the project. They must be done before pipeline construction can begin. We can’t afford unnecessary delays in completing these upgrades. It is a challenge we need to address. CLICK

SLIDE 38: Steel
Third, the project calls for a lot of steel. In ANGPA, Congress expressed the preference that such steel be sourced in North America. Are North American steel producers prepared to deliver 2.5 million tons of high strength steel pipe on time? CLICK

SLIDE 39: Training/Retaining Qualified Labor
The fourth economic challenge is finding and training the labor pool needed on both sides of the border. This pipeline will require more than 50 million man hours of mostly skilled labor. That workforce must be trained and then retained throughout the preconstruction and construction. We would benefit by having the Mackenzie pipeline built first. The workforce could develop the critical arctic skill sets on the Mackenzie project and then transfer those skills to the Alaska project. CLICK

SLIDE 40: Natural Gas Prices and Supply
It happened in the 1970’s and 1980’s. The price of natural gas rose and then plunged. And the pipeline was put on the shelf. Why? In the 1970’s natural gas was discovered in large quantities throughout Canada and in the lower 48. Four LNG import facilities were constructed in the U.S., with dreams of high profits due to the increased demand. Then in 1983 the natural gas market began to decline and the proponents shelved the Alaska to Alberta project.
When discussing the supply of natural gas for consumption in United States today, the general focal point includes imports from overseas in the form of liquefied natural gas (LNG); pipeline imports from Canada; and domestic production of non-conventional (supplemental sources of supply) natural gas. The United States and Canada should not walk into dependence on foreign natural gas with our eyes wide open.
Shale gas has emerged as a leading source of domestic supply. On June 19, 2009 the Potential Gas Committee released its biennial report stating that America’s natural gas reserves increased by 39% since 2006 mostly due to new found shale reserves. This increase in natural gas reserves could be viewed as an impediment to the Arctic gas pipelines. But I don’t see it that way. Congress and the Administration are talking about an energy and climate policy that focuses on clean, domestic supplies of energy. Natural gas is clean-burning and can be the transition fuel.
While there is a lot of talk today about the economics of a project – now isn’t the time to say nay. ConocoPhillips’ President and CEO Jim Mulva said it best, "You can't look at gas prices today. You have to look at prices 10 years from now." What is important today is to get a project licensed so the financing decision can be made in 2014. CLICK

LAST SLIDE: 41
The Alaska and Mackenzie projects present a matrix of issues that need to be dealt with now in order for both to succeed. The OFC is working with all the stakeholders in Canada, Alaska and the Lower 48 to ensure the Alaska natural gas pipeline proceeds on schedule. North America needs Arctic gas. North America needs both pipelines. Alaska and Western Canada need these projects. The time is now! Thank you. THE END

Attachments: 

Full Presentation

Alaska’s Natural Gas Pipeline: A Federal Update
Tanana Chiefs Conference Annual Convention
Fairbanks, AK
March 18, 2009

By Drue Pearce, Federal Coordinator
Office of the Federal Coordinator
Alaska Natural Gas Transportation Projects

SLIDE 1: Introduction Page
Good Afternoon—Jerry (Isaac), thank you for inviting me to the Tanana Chiefs Conference Annual Convention. I believe it is important that, we, the federal government, seize every opportunity possible to have a dialogue with Alaska Natives regarding the natural gas pipeline. No matter how many hats you wear – tribal, ANCSA corporate, local government, permanent fund dividend recipient, federal taxpayer, the pipeline will affect your lives. We need to coordinate and communicate with each other.
I am going to talk to you today briefly about the projects, technical challenges associated with them, and the need for infrastructure upgrades. I am also going to outline the new administration’s position on the projects, the role of my office as Federal Coordinator, the responsibilities of the Federal Energy Regulatory Commission, otherwise known as FERC, and the opportunities for you and your communities to interact with the federal government and be involved in the projects.
One of the largest known reserves of natural gas in America sits in Alaska’s Arctic, associated with the development of oil at Prudhoe Bay. The 35 trillion cubic feet of proven natural gas reserves will make a significant long-term contribution to the United States’ energy supplies. Since the late 1990’s, the State of Alaska, the three North Slope Producers, TransCanada, and other major pipeline companies have been pondering whether now is the time when construction of the gasline is economically feasible. CLICK

SLIDE 2: Pipeline Projects
Alaska has a unique pipeline history. While you may know much of it, a brief recitation is useful. After discovery of the elephant sized Prudhoe Bay field in 1967, TAPS, the nation’s largest oil pipeline was built. A parallel gasline has remained a dream. CLICK

SLIDE 3: ANGTA
While TAPS was being constructed, plans were initiated to build a large diameter pipeline to deliver the associated natural gas to the lower 48. Congress enacted the Alaska Natural Gas Transportation Act and President Carter designated the route, design and project sponsors for this transportation system. The southern portions of the pipeline shown in light green on this map are known as the “pre-build” and went into operation in 1981-1982. The northern portion shown in dark green, would link North Slope gas to the pre-built legs. Foothills Pipe Line Ltd, now a subsidiary of TransCanada, is the legacy owner and operator of the pre-build. The northern portion is the route of the pipeline that has remained an elusive target but irresistible dream to Alaskans. CLICK

SLIDE 4: ANGPA
There have been countless proposals to produce North Slope gas since the late 1970’s. The latest effort led to Congress passing the Alaska Natural Gas Pipeline Act, known as ANGPA in 2004. That statute created my office, the Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects, and encouraged the expeditious approval, construction, and operation of a natural gas transportation project for delivery of North Slope gas to U.S. markets.

SLIDE 5: Planned Pipeline Projects
There are four projects that the Office of the Federal Coordinator is monitoring. The first two are mainline proposals which you have heard about today from the proponents and the final two are bullet/spurline proposals which you hear about almost daily in the news.
I won’t repeat the detailed messages you have heard from Denali and TransCanada. As a quick recap, Denali developed a competing project that does not comply with all of the State of Alaska’s AGIA requirements – which the Governor calls the “must haves”. Denali has entered the formal pre-file application process with the FERC and they have filed a Right-of-Way application with BLM.
TransCanada Alaska has begun engagement of the U.S. federal agencies regarding their project.
It is important to note however, that the State AGIA license does not grant an exclusive right to land use and right-of-way permits at the State level. Nor is there an exclusive right at the federal level.

The Alaska Natural Gasline Development Authority, known as ANGDA, has proposed a spurline from Southcentral to Fairbanks. The Army Corps of Engineers is the lead agency for their EIS. They completed their scoping meetings, including Delta and Fairbanks which were held on February 25 and 26. The Corps has also begun the Government-to-Government consultation for this project.
Enstar, SouthCentral Alaska’s gas distribution company, has proposed a bulletline that would run from the Brooks Range through Fairbanks to Southcentral. The Army Corps of Engineers will also be the lead on their EIS. They are discussing potential route options with various federal and state agencies including one option that would run 7 miles along the edge of Denali National Park. (Click)

SLIDE 6: Infrastructure
In order to construct any of these pipelines, it is imperative to have the necessary infrastructure in place to stage all the manpower and materials for construction. In both the U.S. and Canada, we need to either upgrade or build new bridges, highways, airports, material sites and maintenance camps to support tens of thousands of workers, the heavy equipment and the 2.5 million tons of steel needed to construct the pipeline. The latest estimate outlines at least a $1 Billion in projects just in Alaska. The State of Alaska may utilize part of its Stimulus package funding to begin these critical upgrades this year.
It will take 4-6 years to complete the major infrastructure projects necessary to the project. They must be done before pipeline construction can begin. We can’t afford unnecessary delays in completing these upgrades; they will kill this pipeline project. CLICK

SLIDE 7: Technical
I want to talk for a few moments about the technical challenges related to the mainline projects. These challenges are straightforward, relatively easy to address issues that science and lots of money are expected to be able to solve. Some of the issues we expect to face are: related to construction in the Arctic; finding enough laborers to fill the 2004 estimated 54 million man hours of work; ensuring integrity for the largest high pressure gas pipeline ever built in the Arctic; harmonizing design requirements in the United States and Canada; and lastly understanding the change in the Arctic climate.

SLIDES 8 TO 23: Permafrost Map Slide Show
As you know, the climate in Alaska is changing. It is important that we understand permafrost changes and other effects climate change may have on the pipeline after its construction.
Permafrost trends must be incorporated into the design of a pipeline so it will last 30-50 years. We assume that areas of solid permafrost will be displaced by discontinuous permafrost as change progresses. The University of Alaska, State of Alaska Geophysical Surveys, and U.S. Geological Survey have been working together to map and model the change. On the screen is a model that demonstrates the range of permafrost in Alaska from 1950 to today and how it is forecast to shift by 2100. The areas in red are permafrost free and as you look further north the colors shift to light blue and dark blue areas – the darker the blue, the colder the ground temperature. Watch what is forecast to happen. CLICK
(PAUSE while slide show runs)

SLIDES 24 TO 34: Permafrost Map Slide Show One More Time – 2000-2050
I am going to play the map one more time showing you the map from 2000 to 2050. This time, we look at the forecast change every 5 years. CLICK (PAUSE while slide show runs) CLICK

SLIDE 35: Obama Administration
The longest ever Presidential election is finally over and federal agencies are deep into the transition phase.
I am pleased to report that the Obama Administration recognizes the need for an Alaska natural gas pipeline. The President recognizes that the pipeline can increase America’s energy security, create jobs, and help bring clean natural gas to domestic U.S. markets. He has mentioned the project several times since taking office.
I am focusing my attention as Federal Coordinator on briefing key political appointees on the project and the work the federal agencies and project proponents have done to date to prepare to build a pipeline that will supply natural gas to the lower 48 and create thousands of new jobs. CLICK
SLIDE 36: What is the Role of the OFC
My job as Federal Coordinator is to ensure coordination, compliance and oversight, as well as information dissemination. We are headquartered in D.C. and opened our Alaska field office last month with an Environmental Engineer on staff. Additional staff will be added as appropriate.
Coordination among the various federal and State agencies is critical to the successful and expeditious construction of an Alaska natural gas transportation project. The OFC is the lead on development of project implementation plans to facilitate the roles of the federal agencies participating in the pipeline effort. The OFC has also begun negotiations with the State of Alaska on a joint Monitoring and Surveillance Agreement to oversee final design and construction of the project.

Expedience is crucial to the success of the project. The OFC will conduct compliance and oversight reviews to ensure that no federal agency attaches any term or condition not required by law that may impair or prevent progress of the projects.
Given the magnitude of the project it is essential to the success of the project that coordination, oversight and communications are effective and efficient.
The Alaska gasline project is so big, it will make its own weather – and we all know what Alaska’s weather is like! CLICK

SLIDE 37: U.S. Federal Agencies
There are over 22 federal agencies that have roles and responsibilities relating to this project. Just keeping track of these agencies and their responsibilities is a full-time job.
Environmental reviews have to be completed by the U.S. Federal Government, State of Alaska and Canada. ANGPA provides for a specific timeframe, 18 months, for completing the U.S. federal environmental reviews for the project and designates the FERC as the lead agency for completing the environmental review. The Canadians and State of Alaska have agreed to try to time their processes to coincide with the schedule outlined in ANGPA. The schedule is very demanding, especially if there are two applications to process. FERC will write one Environmental Impact Statement for each applicant that all the other federal agencies will use to process any permits. This is unique and will inevitably result in new challenges. It will be imperative that all the federal agencies agree to the schedule put forward by FERC. CLICK

SLIDE 38: FERC Pre-Filing Enviro Review Process
This is a flowchart that outlines the FERC application process. The check depicts the point at which Denali and TransCanada Alaska’s latest timelines are expected to mesh. The boxes above the check indicate activities each expect to complete within the next 24 months. (NOTE the public input opportunities, comment periods.) A major part of the FERC pre-filing process is completion of the FERC Resource Reports. CLICK

SLIDE 39: FERC Resource Reports
The Environmental Resource Reports constitute the “environmental report” portion of a FERC application and are similar to the information required by the Canadian authorities. There are eleven reports that will apply to the natural gas pipeline projects. These reports are one of sixteen exhibits in the final application to FERC. Other exhibits address topics such as gas and market supply data; flow diagrams; the cost of the facilities; financing, depreciation, and tariff provisions; etc.
Environmental Resource Reports are prepared by the applicant and based on collected survey data and other available information. They provide the review agencies with information with which to conduct their analyses. Each Environmental Resource Report presents the existing conditions in the area affected by the proposal and the impacts likely to occur during project construction and operation, and cumulatively. The Environmental Resource Reports also present the applicant’s proposed mitigation. Within this context, the Environmental Resource Reports address and attempt to resolve all issues which are identified during the scoping process.
Finally, the Environmental Resource Reports include a reference list and copies of correspondence between the applicant and state and federal resource agencies.
Both applicants expect to complete Resource Reports one and ten before the end of the year as they prepare their Open Season packages and get ready for the open houses and Environmental Impact Statement Scoping meetings.
Resource Report 1 is the General Project Description. It will describe facilities associated with the project, special construction and operation procedures, construction timetables, future plans for related construction, compliance with regulations and codes, and permits that must be obtained.
Resource Report 10 is project Alternatives. This report must describe alternatives to the project and compare the environmental impacts of such alternatives to those of the proposal. The discussion must demonstrate how environmental benefits and costs were weighed against economic benefits and costs, and technological and procedural constraints.

The potential for each alternative to meet project deadlines and the environmental consequences of each alternative shall be discussed.
Two other reports you should note are Resource Report 4 and 5. Resource Report 4 is Cultural Resources. It requires consultations, cultural resource surveys investigations and providing reports and plans on cultural resources. And Resource Report 5 is Socioeconomics. In this report, applicants must identify and quantify the impacts of constructing and operating the proposed project on factors affecting towns and counties in the vicinity of the project. This includes subsistence, issues, tribal consultation and human health issues. CLICK

SLIDE 40: Native Stakeholders
It is important for the federal government to engage with all project stakeholders. There are a number of them, I am going to focus on the Native Stakeholders.
Alaska is unique. We have a system of layers that is very different from the lower 48. We have 229 federally recognized tribes. And, the Alaska Native Claims Settlement Act (ANCSA) created Regional and village corporations with vast land holdings. Many of you also serve on local councils, school boards, RACs, etc.
As the federal government moves forward with permitting the gas pipeline projects, we will work closely with all the Native Stakeholder groups who are interested in participating in the process.
The Executive Memorandum on Government-to-Government Relationship with Tribal Governments (September 2004) and Presidential Executive Order 13175 (November 2000) require all federal agencies to conduct “government-to-government consultations” with “directly and substantially affected” tribes when activity, such as regulation making or project permitting may affect them.
Being involved in the development process ensures that native communities are aware of upcoming projects, allows their concerns and proposals to be expressed, and provides them with the opportunity to take part in revenue collecting. As I mentioned, Alaska has 229 federal recognized tribes who will be contacted regarding the government-to-government process.

SLIDE 41: Government-to-Government Consultations
In addition to leading the work on the Environmental Impact Statement, FERC will be the lead for the federal government in the Government-to-Government consultations. The Consultation process is expected to begin around the same time as the start of the NEPA Scoping process, which occurs after the company Open Houses.
These consultations are crucial. They provide the forum to ensure that the impacted Alaska Natives’ concerns are considered as the planning moves forward – that’s you. In order to ensure continuity throughout the life of the project, FERC is working to establish a written Government-to-Government consultation plan that will serve the needs of all the federal agencies. The plan FERC is establishing is project specific. Since FERC only has one project under review, the first written plan will address the Denali project. However, FERC anticipates they will engage in a similar process/plan when TransCanada pre-files. The plans will be similar but the specifics in the plan, like the list of directly affected tribes, will depend on the route of the project.

I want to be clear; the mainline consultation will not be the only one pursued. There are other projects being considered in Alaska, like the in-state pipelines, which require government-to-government consultation. To avoid confusion FERC expects to keep their government-to-government review as similar to other agency reviews as possible.
I think we can all agree that the desire at the end of the day is for natural gas to leave the North Slope to be available to Alaska and markets in the lower 48.
My office will provide oversight to ensure the FERC Government-to-Government Consultation plan is followed. I understand how important it is to listen to and work with you as you express your concerns about projects. My office will be another place you can turn if you feel you are not being heard. We will listen and work with you.

There are many opportunities, in addition to the Government-to-Government consultations, to participate in the federal review process. As part of the NEPA process, the applicants, FERC staff and other State and federal agencies will be holding meetings along the route for example open houses, scoping meetings, meetings with individual stakeholders, and DEIS comment meetings. I encourage you all to participate in these parts of the process. CLICK

SLIDE 42: Consultations Section 106
Federal agencies are also required to do a cultural and historic resource analysis and consultation. The National Historic Preservation Act of 1966 created the National Register of Historic Places and the Section 106 review process. The Section 106 consultation ensures that preservation values for cultural and historic properties are factored into federal agency planning and decisions. FERC is the lead federal agency for the Section 106 review.
The consultation under section 106 focuses on concerns related to cultural resources, which include:
- Archeological sites
- Historic properties
- Traditional cultural properties

SLIDE 43: Section 106 FERC Chart
In this case – and different from the government-to-government, the sponsor initiates consultation by letter. That letter generally includes a statement offering the native entity to contact FERC directly if they want and gives the necessary contact information. FERC regulations require the applicant to initiate consultation with Native Groups prior to filing an application. The FERC Guidelines direct the applicant to consult “as early as possible in the planning process” (section IV). FERC directs the applicant to consult the State Historic Preservation Office, SHPO) and land managing agencies, as well as conducting independent research to identify the appropriate groups to contact.
The FERC guidelines establish that “Consultation with Indian tribes should be conducted in a manner sensitive to the needs and concerns of the tribes” (IV.B). The FERC continues to use the services of the applicant (and its consultants) to do the “leg-work” and collect information, conduct surveys, and prepare reports. However, any information considered privileged remains so under the auspices of the NHPA (section 304).
The OFC is working with the State of Alaska and the other federal agencies to create a database that can store the information collected during the 106 review. I want to ensure that as we move forward with all these projects we are coordinated. I don’t want to have Denali collecting information at a cultural site one month and then TransCanada disturbing the same site a few months later. The point of the process is to identify the sites so you disturb them as little as possible. We would like to work with you as the process moves forward to ensure duplication doesn’t occur. If you think it is happening, please let us know. CLICK

SLIDE 44: Local Training and Hiring
There are other avenues for participation by your communities in this project. Promoting and ensuring local training and hiring in the Alaskan oil and gas industry is largely a joint venture. Locals are familiar with the terrain, the customs, the people and are prepared to work under extreme weather conditions. As Industry plans projects, they take into consideration how to incorporate local hiring and knowledge.
For example, last year, Denali made available $30 million to fund job training programs, in-State feasibility, and infrastructure upgrade studies for roads, bridges, ports, etc. They opened an office in Tok and hired locals to help conduct some of the work in the region.
On the federal level, the US Department of Labor under the Employment and Training Administration has awarded grants totaling $20 million to the Alaska Department of Labor to prepare Alaska’s current and future workers for careers in the growing energy sector, including the natural gas and oil pipelines.

The Alaska Department of Labor has put together a workforce development plan and a few months ago announced the opening of the new Fairbanks Pipeline Training Center. This pipeline will create thousands of new jobs.

LAST SLIDE 45: THE END
The OFC and all the federal agencies are excited about getting a natural gas pipeline built. It is important not only for Alaska but also for the nation. In order to get this pipeline built, we must ensure that the tariff stays low enough for the natural gas to be profitable when it is delivered to the lower 48. At this time, that means the tariff must stay below $3 per MMBTU (million metric british thermal units) of gas. Every delay or additional expense adds to the tariff and can kill this project. It happened in the past with the Alaska pipeline project and is happened right now with the Mackenzie gas pipeline project in Canada.
It is important that we all pledge to come to the table with an attitude that we want to find ways to say “yes”. Every Alaskan needs to work together to keep this project economic if we want to see the lifetime of benefits this natural gas pipeline can provide.
North America needs this gas. Alaska and Western Canada need this project. Its time is now! Thank you again for inviting me to your Convention.
THE END

Attachments: 

Full Presentation

UPDATE ON FEDERAL ACTIVITIES TOWARD COORDINATING THE
ALASKA NATURAL GAS PIPELINE
Presented Nov. 19, 2009
To the Resource Development Council’s Annual Meeting
Anchorage, Alaska
by Drue Pearce
Federal Coordinator,
Alaska Natural Gas Transportation Projects
Washington, DC

IT’S ALWAYS GREAT TO BE HOME. TODAY IS ESPECIALLY POIGNANT AS IT IS LIKELY MY FINAL APPEARANCE BEFORE THE RDC IN MY ROLE AS YOUR FEDERAL COORDINATOR.

I WANT TO THANK YOU, JASON, CARL AND MEMBERS FOR ALL YOU DO FOR ALASKA.

AS YOU KNOW, AT THE REQUEST OF THE PRESIDENT, I TENDERED MY RESIGNATION AND JANUARY 3RD WILL BE MY FINAL DAY AS YOUR FEDERAL COORDINATOR. I WANT TO TAKE THIS OPPORTUNITY TO TELL YOU AND ALL ALASKANS THAT IT’S BEEN AN EXCEPTIONAL HONOR TO BE THE FIRST FEDERAL COORDINATOR. MY MISSION ALL DAY, EVERY DAY, HAS BEEN TO EXPEDITE THE MOST IMPORTANT ENERGY DEVELOPMENT PROJECT IN NORTH AMERICA.

THE COMMERCIALIZATION OF NORTH SLOPE GAS PROJECT IS CRITICAL NOT JUST TO ALASKA BUT TO THE NATION, AND AS THE OFC MISSION STATEMENT SAYS IT IS OUR JOB TO: “Advance our Nation’s energy and economic security by expediting the delivery of clean, natural gas from the North Slope of Alaska to North American markets.

I AM VERY PROUD OF WHAT I’VE ACCOMPLISHED OVER THE PAST THREE YEARS. I’VE STOOD UP A NEW INDEPENDENT FEDERAL AGENCY WITH A SECURE BUDGET, A GREAT STAFF, AN UNQUALIFIED ANNUAL AUDIT -- FOR ALL YOU CPA’S IN THE ROOM, YOU KNOW WHAT AN ACCOMPLISHMENT THAT IS -- AND A SOLID STRATEGIC PLAN. I AM EVEN MORE PROUD OF WHAT MY STAFF AND I HAVE DONE AS A TEAM TO PREPARE THE FEDERAL GOVERNMENT TO EXPEDITE THE PROJECT.

I REGRET HAVING TO LEAVE BEFORE THE JOB IS DONE. SO THIS MORNING, PLEASE ALLOW ME TO GIVE YOU MY VERSION OF THE “STATE-OF-THE-STATE” SPEECH – A STATE OF THE AGENCY SPEECH.

CONGRESS AND A SUCCESSION OF PRESIDENTS RECOGNIZED A VERY DISTINCT NEED FOR AN OFFICE TO COORDINATE THE FEDERAL PROCESS OF LICENSING, PERMITTING AND OVERSIGHT OF DESIGN AND CONSTRUCTION OF THE GAS PIPELINE PROJECT. AT PRESIDENT JIMMY CARTER’S DIRECTION, THE OFFICE OF THE FEDERAL INSPECTOR PRESIDED OVER THE PRE-BUILD IN THE 80’S AND 90’S.

AFTER A NUMBER OF DRAFT ITERATIONS, THE OFC WAS CREATED IN 2004. IT TOOK 26 MONTHS TO GET FROM PASSAGE OF THE LEGISLATION TO MY SWEARING IN. I LIKE TO DESCRIBE THE OFFICE AS BEING TASKED WITH DOING THE JOB THAT COMBINES THE TALENTS OF TRAFFIC COP, DIPLOMAT, PSYCHIC, OMBUDSMAN, ANALIST AND ENGINEER.

IT HAS BEEN 36 MONTHS SINCE I WAS SWORN IN. WHEN I STARTED, IT WAS JUST ME WITH NO OFFICE OR BUDGET OR STAFF. I’VE PUT TOGETHER A TALENTED AND DEDICATED GROUP OF 10 PEOPLE WHO WORK BOTH HERE IN ALASKA AND IN WASHINGTON, DC ON YOUR BEHALF. THEY ARE EXTREMELY TALENTED, FULLY ENGAGED AND DEDICATED TO A SINGLE MISSION…. TO COORDINATE AND EXPEDITE THE WORK OF 24 PLUS FEDERAL AGENCIES WITH ROLES IN THE PERMITTING, LICENSING, CERTIFICATING THE PIPELINE.

ALL THE WHILE WE COORDINATED WITH THE CANADIAN GOVERNMENT, THE STATE OF ALASKA AND ALL STAKEHOLDERS… FROM TRIBES TO THE ENVIRONMENTAL COMMUNITY.

AND SO I’D BE REMISS IF I DIDN’T APPLAUD THE STAFF I LEAVE BEHIND. THEY ARE EXCEPTIONAL.

CONGRESS HAS AUTHORIZED A $9.6 MILLION BUDGET TO ACCOMPLISH OUR LAUNDRY LIST OF TASKS. I HAVE TIME TODAY TO TOUCH ON ONLY A FEW OF OUR MAJOR EFFORTS:

• WHAT’S GOING ON AT THE FEDERAL U.S. LEVEL AS WE PREPARE FOR THE OPEN SEASONS AND COMPLETE APPLICATIONS FROM TRANSCANADA/EXXON MOBIL AND DENALI;
• HOW MY OFFICE COLLABORATES WITH CANADA’S REGULATORY AGENCIES AND ORGANIZATIONS TO EXPEDITE THE PROCESS; AND,
• OUR WORK WITH THE STATE OF ALASKA TO MOVE THIS PROJECT ALONG.
• WE COMPLETED A GAP ANALYSIS THAT IDENTIFIES GAPS – OVERLAPS THAT COULD JEOPARDIZE THE EFFORT TO EXPEDITE CONSTRUCTION.

AS YOU KNOW, DENALI AND TRANSCANADA / EXXON MOBIL HAVE ENTERED FERC’S PRE-FILING PROCESS. BOTH ARE WORKING ON THEIR OPEN SEASONS WITH TRANSCANADA SLATED TO GO FIRST AND CONCLUDE IN THE SUMMER OF 2010. DENALI ANTICIPATES CONDUCTING ITS OPEN SEASON IN THE LATTER PART OF NEXT NEAR.

WE HAVE WRITTEN AN IMPLEMENTATION PLAN FOR EACH APPLICANT TO DEVELOP AN AGREED UPON ROADMAP FOR EACH TO FOLLOW AS THEY PROGRESS TO FILING THEIR FERC APPLICATIONS. THESE PLANS ALLOW FOR EARLY COORDINATION … EARLY COORDINATION MEANS WE HAVE ADOPTED A PROJECT MANAGEMENT APPROACH BASED ON A COMMON UNDERSTANDING AND COMMITMENT TO THE PERMITTING PROCESS. THE IMPLEMENTATION PLANS ALSO ALLOW THE OFC TO MAKE SURE THAT ALL FEDERAL AGENCIES FULLY COMPLY WITH THE FEDERAL LAWS THAT GOVERN THIS UNIQUE PROJECT.

WE ALSO ARE COMPLETING A PERMITTING MATRIX – AN OVERALL PICTURE OF THE PERMITTING PROCESS – FOR EACH APPLICANT SO THAT ALL AGENCIES, BOTH COMPANIES, AND THE PUBLIC HAVE AN ORGANIZED AND AGREED UPON FRAMEWORK TO USE AS THEY PREPARE, REVIEW AND ISSUE PERMITS, LICENSES AND CERTIFICATIONS.

THE FERC’S SCHEDULE TO COMPLETE THE ENVIRONMENTAL IMPACT STATEMENT IS MORE THAN AMBITIOUS – IT’S WARP SPEED. WE’RE WORKING CLOSELY WITH FERC ON THIS PHASE OF THE PROJECT AS WELL AS TO ENSURE IT PROVIDES LOTS OF INFORMATION TO THE PUBLIC BEFORE OPEN SEASON PACKAGES ARE DELIVERED SO THAT YOU, THE PUBLIC, WILL UNDERSTAND WHAT FERC IS REVIEWING AND WHAT YOU WILL BE ASKED TO COMMENT ON BEFORE THE COMMISSION VOTES TO ALLOW THE OFFERING TO PROCEED.

WE’VE ESTABLISHED A TECHNICAL REVIEW TEAM COMPRISED OF TECHNICIANS, FEDERAL AND STATE AGENCY EXPERTS AND CANADIAN EXPERTS TO:

• SHARE ENGINEERING INFORMATION AND EXPERTISE RELEVANT TO AGENCY

PERMITTING OF DESIGN AND CONSTRUCTION OF THE ARCTIC NATURAL GAS PROJECT

• IDENTIFY PROJECT TECHNICAL ISSUES TO INCLUDE BUT NOT LIMITED TO:

PIPELINE, PROXIMITY, SECURITY, LEAK PREVENTION, BEST AVAILABLE CONTROL

TECHNOLOGY, PERMAFROST, GAS TREATMENT PLANT, AND EMISSIONS.

• IDENTIFY ISSUES THAT REQUIRE EXPEDITED COORDINATION AND RESOLVE THESE ISSUES BEFORE IMPACTING THE TIMELINE OR PROJECT.

ONE OF THE MOST AMBITOUS EFFORTS ON OUR ‘TO DO’ LIST IS THE DEVELOPMENT OF A PROTOTYPE GEOGRAPHIC INFORMATION SYSTEM.

AS YOU KNOW, THE ARCTIC IS NOT WELL MAPPED. IN FACT, THERE’S NO ACCESSIBLE STANDARD SET OF MAPS AND DATA FOR THE PIPELINE ROUTE. BUT BY THE END OF THE YEAR, WE’LL HAVE INFORMATION ON A 20-MILE STRETCH OF THE ROUTE AT ATIGUN PASS.

AGENCIES USE DIFFERENT SETS OF INCOMPATIBLE DATA. THERE IS A LACK OF AN AUTHORITATIVE BASEMAP TO REFERENCE INFORMATION RELEVANT TO PERMITTING. THERE IS

SOME GOOD DATA, BUT ALSO SOME THAT IS EITHER INCOMPLETE OR ACTUALLY INCORRECT. INTEGRATION CAN BE CHALLENGING.

OUR GOAL IS TO DEMONSTRATE THAT THE GIS PROTOTYPE IS AN AUTHORITATIVE, CONSISTENT, AND INTEGRATED SOURCE OF INFORMATION TO CONSTRUCT, OPERATE, AND MAINTAIN A GAS PIPELINE.

AS SHOWN HERE, EXISTING ELEVATION DATA FOR THE AREA IS COARSE. LIDAR DATA REVEALS THE TERRAIN IN FAR MORE DETAIL. WE HOPE TO BUILD A SYSTEM THAT USES THE INCREDIBLY DETAILED LIDAR AS THE BASE MAP.

HERE IS A DETAIL VIEW OF ATIGUN PASS, AND THE LIDAR DATA THAT WE COLLECTED THIS FALL HAS BEEN ANALYZED IN GIS TO SHOW SLOPE. HERE IS SHOWN SLOPE IN DEGREES, BLUE COLOR BEING FROM 0—7 DEGREE SLOPES; AND RED COLOR 7—90 DEGREE SLOPES. THE INTENSITY OF COLOR REFLECTS SLOPE STEEPNESS. ALSO SHOWN HERE ARE THE ORIGINAL NW BOREHOLES. MORE THAN 1,000 BOREHOLES WERE DIGITIZED AS PART OF THIS PROTOTYPE PROJECT, WHICH IS ONLY 20 MILES LONG.

THE WEB BROWSER APPLICATION PROVIDES OPEN ACCESS TO THE GIS DATABASE. DATA CAN BE SELECTED TO BE DISPLAYED DEPENDING ON LEVELS OF CONFIDENTIALITY. IN THIS CASE WE ARE LOOKING AT THE OVERVIEW OF THE ATIGUN PASS PROTOTYPE AREA ON TOP OF THE REGIONAL ELEVATION BASE OVERLAID WITH SATELLITE IMAGERY. THE TABLE OF CONTENTS FRAMES ON THE LEFT SHOWS THE ATIGUN PASS PROTOTYPE LAYERS. THESE ARE BY DEFAULT TURNED OFF AT THE BEGINNING AND CAN BE TURNED ON ONE BY ONE. NOTE, THAT EACH LAYER WILL HAVE its OWN SECURITY/CONFIDENTIALITY LEVEL. IT IS OUR GOAL TO MAKE AS MUCH INFORMATION AVAILABLE TO THE PUBLIC AS POSSIBLE.

NW BOREHOLE LOGS ARE GEOREFERANCED INTO THE GIS PROTOTYPE AND PROVIDES A STRATIFICATION OF SOIL TYPES AND PERMAFROST DATA.

WITH GIS, YOU CAN CLICK ON ANY POINT ALONG THAT STRETCH OF THE PIPELINE TO EXTRACT AND VIEW RELEVANT MAPPING AND REPORT DATA. THE POWER OF GIS IS PROVIDING A PLATFORM FOR SHOWING MANY TYPES OF INFORMATION.

IN THIS CASE WE ARE CLICKING ON A STREAM CROSSING POINT (IN GREEN SQUARES) TO PULL UP A PHOTO. WE THEN CAN CLICK ON A STREAM TO GET INFORMATION ABOUT THAT STREAM, ITS NAME AND ESSENTIAL FISH HABITAT. THE PIPELINE IS SHOWN IN RED, THE PROPOSED GASLINE MILEPOSTS IN YELLOW.

I’D LIKE TO GIVE YOU A SNEAK PREVIEW OF WHAT THE GIS WILL LOOK LIKE. IT’S A 1 MINUTE VIDEO WITH A GOOGLE EARTH FEEL. THE MOVIE FILE CONTAINS THE LIDAR, THE BOREHOLE SAMPLES ILLUSTRATED BY THE GREEN PLUS SIGNS AND THE SOIL TYPE INFORMATION, WHICH IS OVERLAIN IN PASTEL.

TO SUMMARIZE, THE GIS PROTOTYPE WILL PROVIDE AN

• AUTHORITATIVE BASEMAP, WHICH ALLOWS DATA TO BE INTEGRATED

FOR MULTIPLE AGENCIES, THE PUBLIC AND STAKEHOLDERS

• THE WEB INTERFACE PROVIDES TRANSPARENT ACCESS TO DATA AT

DIFFERENT LEVELS

LIDAR COUPLED WITH GOOD IMAGERY PROVIDES A VALUE-ADDED DATABASE. OUR NEXT STEP IS TO ACQUIRE INPUTS FROM FEDERAL AND STATE AGENCIES.

SO, THESE ARE SOME OF THE TASKS ON OUR PLATE FOR THE NEXT SIX MONTHS, AND AS THE APPLICANTS HEAD TOWARD OPEN SEASON, WE ARE WORKING DILIGENTLY WITH THE STATE OF ALASKA, CANADIAN GOVERNMENT AND ALL THE STAKEHOLDERS FROM NATIVE GROUPS TO OUR FRIENDS IN THE CONSERVATION COMMUNITY.

LET ME TAKE A MINUTE TO BRIEF YOU ON MY WORK WITH OUR CANADIAN PARTNERS. IT’S IN OUR BEST INTEREST TO ENSURE THE PROCESS MOVES AS EXPEDITIOUSLY AS POSSIBLE ON THEIR SIDE OF THE BORDER.

I’VE MADE MANY TRIPS TO CANADA IN AN EFFORT TO ENGAGE THEIR ENTHUSIASTIC RESPONSE TO THE PROJECT. THAT’S NOT AS SIMPLE AS IT MIGHT SOUND SINCE THERE ARE MANY CANADIAN WHO CONSIDER OUR PROJECT A COMPETITOR TO THEIR DREAM OF A MAKENZIE PIPELINE.

AT THIS POINT, EVERYONE IS ENGAGED. MINISTER JIM PRENTICE – WHO HAS THE ALASKA PIPELINE FILES ON HIS DESK – NATURAL RESOURCES MINISTER LISA RAITT, DEPUTY MINISTER CASSIE DOYLE, THE NATIONAL ENERGY BOARD, THE NORTHERN PIPELINE OFFICE, THE MPMO, THE ENVIRONMENTAL ASSESSMENT AGENCY, PROVINCIAL PREMIERS, THE FEDERAL SENATE, THE PETROCHEMICAL INDUSTRY, ORGANIZED LABOR, FIRST NATIONS, ET AL ARE ENGAGED AND ENTHUSIASTIC ABOUT THE ECONOMIC BENEFITS THAT THE PIPELINE WILL BRING TO CANADA.

WE’VE INVITED CANADIANS TO BE A PART OF THE TECHNICAL REVIEW TEAM – THEY HAVE EXPERTS AND EXPERIENCE THAT WILL BE OF CRITICAL IMPORTANCE TO THE U.S. PERMITTING AGENCIES. WE NEED TO HARMONIZE OUR STANDARDS – AND THAT WORK HAS ALREADY BEGUN.

ALL THOSE CANADIAN OFFICIALS I MENTIONED HAVE SHAKEN MY HAND AND PLEDGED TO MEET THE U.S. SCHEDULE SO THAT THEIR LICENSE IS IN PLACE WHEN OURS IS, IN 2014.

CANADA DOESN’T HAVE A POSITION LIKE MINE, BUT MINISTERS PRENTICE AND RAITT HAVE BEEFED UP THE MPMO TO BE THE PROJECT MANAGER FOR DENALI AND REPOPULATED THE NORTHERN PIPELINE OFFICE TO OVERSEE THE FOOTHILLS PROJECT, NOW OWNED BY TRANSCANADA, PARTNERED WITH EXXON.

WE HAVE DRAFT SURVEILLANCE AND MONITORING AGREEMENT WITH THE STATE OF ALASKA, WHICH IS REQUIRED BY OUR STATUTE, AND THE ATTORNEYS ARE WORKING TO COMPLETE IT AS SOON AS POSSIBLE. WHEN FINALIZED, THE MOU WILL LAYOUT THE PROCESS IN DETAIL FOR WORKING TOGETHER FROM THE PERMITTING PHASE OF THE PROJECT THROUGH CONSTRUCTION.

THERE ARE MAJOR INFRASTRUCTURE NEEDS THAT I’VE SPOKEN ABOUT PREVIOUSLY.

THERE IS NATIONAL SUPPORT FOR THE PIPELINE PROJECT INCLUDING AN ENDORSEMENT FROM THE NATIONAL AFL-CIO BECAUSE OF THE JOBS IT WILL CREATE, AND FOR THAT WE ALL OWE OUR GRATITUDE TO VINCE BELTRAMI. THERE’S SUPPORT FROM CONGRESS AND THE FEDERAL EMPLOYEES AT THE AGENCIES ARE EXCITED TO BE WORKING ON SUCH AN IMPORTANT PROJECT.

DECISIONS MADE ON ENERGY OVER THE NEXT TWO YEARS WILL HAVE PROFOUND IMPACTS FOR DECADES TO COME. IT IS IMPERATIVE THAT ALASKANS UNITE TO PORTECT OUR STATE DURING THE ENERGY AND CLIMATE CHANGE DEBATES TO COME.

I THINK YOU’LL AGREE WITH ME THAT THERE IS AND ALWAYS WILL BE CONSUMER DEMAND FOR ENERGY. THAT’S NATURAL GAS – CLEAN BURNING AND ENVIRONMENTALLY FRIENDLY – OUR TIME IS NOW.

CAMBRIDGE ENERGY RESEARCH ASSOCIATES HAS A GOOD STATEMENT THAT I WANT TO SHARE WITH YOU: “HUMANS HAVE THE CAPACITY TO INVENT GADGETS THAT HAVE TO BE CHARGED FASTER THAN WE INVENT NEW WAYS TO CREATE THE POWER.”

NO MATTER WHICH HORSE YOU BET ON, IT’S TIME TO BUILD THE PIPELINE SO THAT WE CAN CREATE THE POWER SOURCE TO CHARGE ALL THOSE GADGETS THAT WE USE EVERY DAY AND CAN’T SEEM TO LIVE WITHOUT.

2018 FIRST GAS SEEMS LIKE A LONG WAY AWAY, BUT 2014 FOR FINANCING AND SANCTIONING IS RIGHT AROUND THE CORNER.

I WANT TO PERSONALLY THANK THE HIGHLY PROFESSIONAL STAFF AT DENALI FOR THEIR TIRELESS EFFORTS. LISA PEKICH AND GUS GUSTAFSON WERE THERE FIRST: WE’VE SHARED SOME GROWING PAINS.

TRANSCANADA IS THE MOST SUCCESSFUL PIPELINE COMPANY IN NORTH AMERICA WITH ENGINEERS WHO, FOR 30 YEARS, HAVE BEEN DREAMING ABOUT THIS PROJECT.

I ALSO WANT TO THANK EXXON MOBIL FOR COMING TO THE TABLE. ITS RE-ENTRY IS COMMENDABLE AND ITS TECHNICAL EXPERTISE UNSURPASSED.

THERE’S NEVER BEEN A BETTER GROUP WORKING TO MAKE THIS PROJECT FINALLY HAPPEN!

I ALSO WANT TO THANK AND PRAISE THE MEN AND WOMEN WHO ARE FEDERAL EMPLOYEES, ESPECIALLY THE CAREER FEDERAL EMPLOYEES, FOR THEIR ENTHUSIASM AND HARD WORK. AND I WANT TO PUBLICLY THANK THE STATE OF ALASKA AND THE GOVERNMENT OF CANADA FOR THEIR EFFORTS.

AND, OF COURSE, I FEEL THE NEED TO ONCE AGAIN PRAISE THE MEN AND WOMEN OF THE OFC WHO HAVE GELLED INTO THE BEST TEAM ON THE PLANET – BAR NONE.

LASTLY, I THANK YOU, ALASKA AND HER PEOPLE, FOR ALLOWING ME TO WORK FOR YOU EVERY DAY FOR THE PAST 25 YEARS. EVERY DAY HAS BEEN AN ADVENTURE.

KNOW THAT I WON’T STOP NOW – MY PASSION FOR MY STATE, MY COUNTRY AND THIS PROJECT HASN’T DIMINISHED. MY RESIGNATION IS SIMPLY A FORK IN THE ROAD – FULL OF OPPORTUNITY AND I LOOK FORWARD TO THE NEXT CHAPTER.

DAVE HOLT HAD THE BEST LINE OF THE CONFERENCE WHEN HE SAID: “THE ROAD TO ENERGY SECURITY IS THROUGH ALASKA!”

LET ME EXPAND ON THAT... THE ROAD TO ENERGY SECURITY, ECONOMIC SECURITY AND DOMESTIC HOMELAND SECURITY FOR AMERICA ALL RUN THROUGH ALASKA.

SO LET’S WORK TOGETHER TO MAKE SURE THAT OUR PLACE AS THAT ROAD IS PROTECTED.

AS THE GOVERNOR SAID LAST WEEK, OUR BEST RESOURCES ARE OUR CHILDREN. ALL OF OUR EFFORTS ARE FOR THEM.

FOR THOSE OF YOU WHO HAVEN’T SEEN HER FOR AWHILE, HERE’S MINE. THIS IS TATE HANNA AT 15.

I WILL CONTINUE THE ALASKA ADVENTURE FOR HER AND FOR YOUR FUTURE.

THANK YOU.

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