Alaska Holy Grail: Lawmakers Receive Update on Pt. Thomson Natural Gas Reservoir

ANCHORAGE, Alaska — The Pt. Thomson natural gas reservoir, the so-called holy grail of North Slope gas development, was the focal point of a legislative hearing in Anchorage Tuesday morning.

Lawmakers on the Senate Judiciary Committee questioned the state's role in reaching a recent settlement with Exxon and other producers over the development of Pt. Thomson's gas leases.

The Pt. Thomson field is 60 miles east of Prudhoe Bay, with an estimated 8 trillion cubic feet of gas, nearly a quarter of the known gas reserves on the North Slope.

Pt. Thomson is seen as key to developing a pipeline to the Lower 48, as well as a large volume line from the North Slope to tidewater, to liquefied natural gas export.

Attorney General Michael Geraghty assured lawmakers that the State Department of Law had the authority to negotiate agreement with producers without legislative approval.

Lawmakers raised a number of questions about the impact of the settlement on plans to build a smaller volume gasline to meet the state's energy needs.

Geraghty told lawmakers that the agreement leaves intact the limits set on the volume of gas a small pipeline can carry under AGIA, the Alaska Gasline Inducement Act, signed into law during the Palin Administration.

Deputy Commissioner of Natural Resources Joe Balash, who was one of the architects of AGIA, says the limit was set at 500 million cubic feet a day, more than three times the gas the state uses now and twice what the state would use if Railbelt communities like Fairbanks began using the gas.

Sen. Hollis French, D-Anchorage and chairman of the Senate Judiciary Committee, shared concerns that other language in the Pt. Thomson agreement might limit the state in its ability to develop a small volume gas line.

In the afternoon, the committee will get an update from Exxon on Pt. Thomson development, followed by a public hearing.

Email Rhonda McBride

Editor's Note: Corrected estimated amount for Pt. Thomson from 8 million to 8 trillion cubic feet of gas.