Senate energy bill includes $30 billion loan guarantee, provides access to federal finance bank for Alaska natural gas pipeline project
WASHINGTON, D.C. – U.S. Sen. Lisa Murkowski, R-Alaska, has won acceptance from her colleagues on the Senate Energy and Natural Resources Committee for several major provisions beneficial to Alaska’s efforts to see a pipeline built to deliver North Slope natural gas to Lower 48 markets.
Murkowski, the ranking Republican on the energy committee, and Chairman Jeff Bingaman, D-N.M., have agreed to include the provisions in the base text of a comprehensive energy bill that’s expected to pass the committee as early as next week.
“There’s no project on the horizon more important to our national energy security and economy than construction of a pipeline that’s capable of carrying North Slope gas to the Lower 48,” Murkowski said.
The bill includes major changes to the federal loan guarantee program to bolster efforts to finance and construct an Alaska natural gas pipeline project:
- Increases the 2004 loan guarantee from $18 billion to $30 billion, plus inflation;
- Allows use of the Federal Financing Bank to capitalize the project in order to reduce administrative costs and interest rates and thereby shrink the overall cost of the pipeline by hundreds of millions of dollars;
- Clarifies language of the original 2004 loan guarantee to ensure the federal government provides a 100 percent loan guarantee for up to 80 percent of the cost of the total project;
- The bill also includes a series of technical amendments to the 2004 act to speed issuance of the loan guarantee.
The provisions are applicant neutral and beneficial to Alaska’s efforts to get a gas line regardless of whether TransCanada or the Denali project are ultimately successful.
“A gas line is absolutely essential for Alaska’s economic future,” Murkowski said. “These guarantees will ensure that the largest construction project in North America is able to move forward despite the current economic uncertainties.”
In addition to benefiting Alaska, the provisions will also provide tens of thousands of jobs and tens of billions of dollars of federal tax revenues over time and will help keep natural gas prices affordable for Americans.
Clean-burning Alaska natural gas will be critical to meeting the Obama administration’s stated goal of reducing U.S. greenhouse gas emissions 80 percent by 2050.
“Hopefully these changes will speed the pace of efforts to get a gas line built and offset the financial challenges caused by lower natural gas prices and tighter financial markets,” Murkowski said.
In addition to the main line provisions, Murkowski won committee approval for a provision granting a right-of-way through Denali National Park and Preserve for a smaller in-state “bullet” line. The right-of-way provisions for a line along the Parks Highway clears a procedural problem and would allow a fair comparison between the Parks Highway and Richardson-Glenn Highway routes.
The energy bill also contains language that would establish a one-stop permitting office for energy production on Alaska’s outer continental shelf.
Murkowski plans to offer additional amendments beneficial to Alaska at Tuesday’s markup. The energy bill is expected to be passed out of committee before the end of next week.
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