As oil prices rise and the U.S. struggles to reduce its dependence on foreign energy sources, the people of Alaska have been debating methods to leverage the state’s vast natural gas resources. The discussion has centered primarily on building a pipeline to connect the North Slope of Alaska through Canada to the lower forty-eight. In recent years, Alaska Governor Sarah Palin championed the Alaska Gas Inducement Act (AGIA) to create nearly $500M in incentives for the development of a gas pipeline.
In general, the Alaskan people, legislature, and major corporate players have demonstrated support for the pipeline initiative. However, the complexity of the undertaking, coupled with an uncertain and unpredictable energy future, has also created fertile ground for disagreement and conflict, particularly with regard to a vote to award the pipeline incentive package to TransCanada (the only approved response to the state’s AGAI proposal request).
To further complicate the landscape, a partnership of major gas producers, termed the Denali project, has signaled its intention to build a private pipeline without government sponsorship in direct competition with TransCanada.
With a yes-or-no vote looming during a special summer session, members of the Alaska legislature invited Francis McGovern [1] and Joshua Gordon [2] to meet with key stakeholders to discuss means by which to avoid a $100B game of chicken between competing pipelines.
Mr. McGovern and Mr. Gordon discussed mediation and consensus building alternatives with over 40 legislators, representatives of the governor's office, and major energy players. They also testified in public hearings about the potential impact of collaborative processes and structured negotiations.
However, much like the energy market itself, the future of the gas pipeline conflict remains uncertain—particularly until the detailed negotiations begin in January 2009.