This political season is generating much debate about Alaska's public investment in developing a North Slope natural gas pipeline. As chairman of the board for the Alaska Gasline Development Corporation, I've been intimately involved in both alternatives currently being advanced -- the Alaska Stand Alone Pipeline (ASAP) and the Alaska LNG project. I can assure you that we are progressing both options in the most prudent and cost-efficient manner. The ultimate goal is to select the project that is in our state's best long-term interests. Now is not the time to abandon either.
Southcentral's energy infrastructure is almost entirely dependent on natural gas, with three of four residents using it to heat and power their homes. That gas comes from declining Cook Inlet fields. While increased exploration in the inlet is showing promise, it hasn't improved the region's long-term energy security. Utilities are still negotiating gas contracts on an incremental, single-year basis. In testimony before the Anchorage Mayor's Energy Task Force this week, ENSTAR President Jared Green confirmed that the company's gas supplies have only been secured through 2018. Even if new discoveries or increased production extend Cook Inlet supplies, that activity alone does nothing to provide relief for Fairbanks, or to connect North Slope gas to Alaskans.
Gov. Parnell and the Legislature demonstrated tremendous foresight in creating AGDC and funding ASAP. This in-state pipeline project was conceived to secure a reliable, affordable, long-term energy supply for Alaskans; provide natural gas to Fairbanks; and begin commercializing stranded North Slope reserves. With the power, funding and authority AGDC was granted, we've made tremendous progress toward these goals. The Alaska LNG export project provides a second option for getting gas to Alaskans, and one that promises to bring long-term jobs, revenue and economic development.
While the last six months of work with our Alaska LNG partners is promising, we have a long way to go before we know whether this giga-sized project is technically feasible or can compete in the world market. Consequently, it's both counterproductive and premature to suggest, as Bill Walker has, that we should abandon ASAP at this preliminary stage. Seventy-five percent of Alaska LNG's estimated $45 to $65 billion or more cost would come from the private sector -- corporations with diverse interests and competing worldwide priorities. We are at least 3-5 years away from the point at which each partner will give the OK on a final investment decision. Until then, there is no guarantee the project will be built. The state has an influential seat at the table, but it's one seat. While we can do much to facilitate the project, the global LNG market will ultimately determine whether the project is constructed.
Alaska is in the position it's in because of the success and progress we've made with ASAP. It's a project conceived by Alaskans, funded with public dollars and controlled by the state. We've shown that we're fully capable of doing this on our own if necessary. We can develop a right-sized project that is economic and constructible. In the process, we've created tremendous leverage for the state. ASAP maximizes the state's options and provides a tangible incentive for our Alaska LNG partners to continue the momentum on that project. Why would we give that up at this early stage of Alaska LNG's development?
Only one of these projects will be built, but it's too early to make an either-or decision. The final project is very likely going to combine the engineering, permitting and design done for each. Three years of intensive activity on ASAP has generated data and work on routing, engineering, pipe metallurgy and welding, geotechnical, permitting and right-of-way, particularly south of Livengood, where work hadn't previously been done. Everything we've done and will continue to do benefits either project.
The Alaska LNG project remains AGDC's highest corporate priority, and we'll continue to do everything in our power to help it succeed. In the meantime, ASAP is Alaska's best insurance policy to guarantee that we accomplish our goal -- long-term gas for Alaskans, at the lowest possible cost, and as quickly as possible.
John Burns is board chair of the Alaska Gasline Development Corporation
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