I (Randy Griffin, Fairbanks citizen) sent the following email to all 40 Alaska State House Representatives on July 22, 2008:
(There are 40 representatives and 20 senators in the Alaska State Legislature)
I also sent the following email letter to all 20 Alaska state senators on July 23, 2008.



Dear Senator:
Please do not grant an exclusive gas pipeline license to TransCanada at this time. Hold them in reserve as a 2nd option.
We need to help encourage and induce the Palin administration to sit down and talk to the North Slope producers and quickly flesh out the terms of tax predictability and the issue of rolled in rates for the Denali Pipeline project which is already going forward.
That way we will have 2 fleshed out gas line proposals instead of one.
   If negotiations with Denali don’t get somewhere fast, the governor can put TransCanada back before the legislature.
 
But if TransCanada is given the license now, that will leave the Denali project with unresolved details and in limbo. I believe the Governor would then turn her back forever on the Denali project, which will hinder it, perhaps fatally.
   That would be a shame because Denali is the project with the best chance of becoming reality.
This is because the Denali project is in perfect alignment with the North Slope lease holders.
The AGIA/TransCanada proposal, however, is seriously cross threaded with the lease holders right out of the gate.
 
The big advantage of Denali, is superior economic viability. This is because the shippers of the gas (the producing oil companies) will have direct control of the costs and can keep them down.
   I do not believe that TransCanada is as motivated to keep the costs down. This is because cost overruns can be passed on to the shippers (producers).
   After a successful open season in which the shipping commitments are signed, TransCanada would have the producers over a barrel.
 
For this reason I believe the producers will be leery at committing to long term shipping agreements, and the TransCanada open season may very likely fail. This could delay the building of an Alaska gas pipeline beyond the window of opportunity. That would be a tragedy to lose the gas line and the economic benefit, when we now have that future in the palm of our hand.
 
Some critics of the oil companies say that it was a mistake for the producers to have owned the Trans Alaska Oil Pipeline, and that we don’t want to repeat that “mistake” with a gas pipeline.
   I disagree and think that the owners have done an excellent job of building and operating the Trans Alaska Oil Pipeline.
 
Critics say that the pipeline tariffs have been too high.
   As an example, they point to the case of an independent oil company (which did not own a share of the oil pipeline) that built the Milne Point oil field (35 miles west of Prudhoe Bay).
Milne Point started flowing in 1985, but the field operator, Conoco (before they became ConocoPhillips), left the North Slope in 1993.
   It’s not fair to just try to blame tariffs for why they left. There were many factors involved in their departure. Please see my web site www.alaskafalcon.com for more information about Milne Point.
 
The 1985 Trans Alaska Pipeline tariff agreement (TAPS Settlement Methodology) lowered the tariff rate.
   Recently, however, there have been a few tariff rate disputes.
The Federal Energy Regulatory Commission is supposed to have final determination on tariff rates. In any event, the knowledge and experience gained from the Alaska tariff history will serve Alaska well as we go forward with a gas line.
   I would imagine that TransCanada would also petition for as big a tariff as they are entitled. After all that is their bread and butter.
 
The Palin administration is unable to back away from the TransCanada deal even if they wanted to, in my opinion. And I’m not suggesting that they want to. But I do feel, that they feel that they are honor bound to follow through on what they started. After all, the administration is the creator of AGIA and the solicitor of the applicants. It would look odd if the Administration turned course on its own. So I agree that the Administration is honor bound to continue headlong on its present course.
 
However, the Alaska legislature is not “honor bound” to automatically award the license to TransCanada. It’s true that the legislature did approve the Alaska Gasline Inducement Act. But the legislature did so in the spirit of cooperation and not as the originator.
   The genesis of AGIA slowed down the gas line because the swirling ideology behind it, led to the demise of the 2006 proposed gasline fiscal agreement which involved Alaska having a 20% share of the gas pipeline. I thought that was a good plan.
 
However AGIA was brought forward in part, on the desire to get an even better deal for Alaska. And it succeeded, because Conoco later came out and said that they would no longer insist on long term predictability for oil taxes as part of the deal for a gas line. They, however, still seek some kind of predictability for gas taxes.
   Another good thing that came out of AGIA was the TransCanada proposal. I very much appreciate the work that TransCanada has done with their application to the AGIA process. The information and expertise that they bring to the discussion is very useful to Alaska. We may very well be able to utilize their services down the line. But that does not mean we’re automatically obligated to immediately fork over exclusive rights and a massive sum of money to TransCanada.
 
My number one priority as a Fairbanks citizen is that a gas line be built during the window of opportunity.
I do not care if it is by TransCanada, Denali Pipeline or the Port Authority.
   I just happen to think that Denali has the best chance of actually getting it done.
And yes, I want the best deal for Alaska, but I recognize that a successful deal must be good for both sides.
 
I do not work in the oil industry, nor do I have any stock in an oil company. However, I’m not part of the anti-oil company tide that sweeps over the people from time to time.
   I worked for Arco from 1983 to 1994 as a blue collar worker (drillsite/plant operator) at Kuparuk, and realize that a productive oil industry is vital for the state and the nation.
 
                                                Sincerely, Randy S. Griffin,   PO Box 73653, Fairbanks Alaska, 99707





If a person wants to send an email message to certain Alaska state legislators, they can get their email addresses by going to the State of Alaska website and then clicking on "Legislature" and then either on "House" or "Senate".

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