Fairbanks Daily News-Miner

JUNEAU — The Alaska Gasline Port Authority was taken out of the running for a state license to build a gas pipeline when Gov. Sarah Palin’s administration denied the group’s request for reconsideration Wednesday.

The port authority filed the request in early January after the administration ruled that its pipeline application did not meet the requirements of the Alaska Gasline Inducement Act.

Revenue Commissioner Pat Galvin said at a news conference Wednesday that the port authority’s application was incomplete when it was initially filed. The group later provided additional information, but Galvin said he and Natural Resources Commissioner Tom Irwin decided the revised application was so different that considering it would have been unfair to applicants that filed their “best and final” offers by the Nov. 30 deadline.

Galvin said he and Irwin never determined whether the port authority’s modified application would have met the requirements in AGIA.

Bill Walker, the port authority’s project manager, said he was disappointed by the decision and didn’t believe the administration had answered the group’s legal arguments for reconsideration.

He also promised to keep pushing the port authority’s “all-Alaska” gas pipeline proposal, which would bring North Slope natural gas south along the trans-Alaska oil pipeline route and transport it by tanker as liquefied natural gas.

“We were here long before AGIA. We were here before the Stranded Gas Act,” he said, referring to the current and previous state laws aimed at developing a project. “We’ll continue on.”

He added that the port authority had more project data now than ever before because of the AGIA bidding process.

Walker also challenged TransCanada’s pipeline proposal, the only one deemed complete under AGIA, pointing to concerns over the size of the project and permitting and financing issues.

“We don’t see a project on the table other than ours that’s going to get built,” he said.

The port authority was formed in 1999 by voters in the Fairbanks North Star Borough, the North Slope Borough, and the City of Valdez to spur the construction of a gas pipeline.

The Fairbanks North Star Borough Assembly approved roughly $350,000 for the group earlier this month. The City of Valdez also recently contributed money to the project.

Galvin promised Wednesday to evaluate the economics and feasibility of a liquefied natural gas project alongside the TransCanada proposal, which would follow a route into Canada.

“If we decide that in the end LNG is a better option for Alaska, then … we would make a decision not to award a license to TransCanada,” he said.

If the state did choose to go with TransCanada, an analysis of the LNG project would help the administration and lawmakers know they chose the best option.

Galvin and Irwin discussed their decision and other gas pipeline issues during a hearing of the Senate Resources Committee and a meeting held by the Republican majority in the House.

The port authority is scheduled to present to the House majority on Feb. 13.

For more news from the capital, go to www.newsminer.com and click on “Legislature 2008″ in the left-hand column.

Contact staff writer Stefan Milkowski at 388-6141.