Office of federal coordinator for Alaska gas pipeline projects not funded in budget, closing

The office of the federal coordinator for Alaska gas pipeline projects is shutting down after not being included in the budget bill that Congress recently passed.

Federal coordinator Larry Persily said he plans to have the office shut down by the end of February.

The office was created in a 2004 law aimed at helping advance an Alaska gas pipeline project that would serve North America. Market conditions led to that plan being scrapped in favor of a liquefied natural gas project that would allow exports to Asia. The state of Alaska, BP PLC, ConocoPhillips, Exxon Mobil Corp. and TransCanada Corp. are involved in the effort.

Persily said the lack of clear authority for his office to be involved with a new project was becoming more of an issue. Congress did not act to address that.

Robert Dillon, a spokesman for U.S. Sen. Lisa Murkowski, said Wednesday that the Senate version of the budget included funding for the office but it was dropped during negotiations with the House on a final package.

Given that the project being pursued is not focused on delivering gas to the Lower 48, it made it harder to argue for funding for the office to be included, Dillon said.

As the project progresses, he said Murkowski, R-Alaska, will make it a priority to ensure that permitting efforts are coordinated. He said it's not clear yet how she will do that.

Right now, it's not clear whether there will be a project. The partners have not reached a final decision point and are in a phase of preliminary engineering and design.

Persily said the project ultimately will live or die based on its economics, not on whether his office exists. But he said his office helped to keep the public and federal agencies informed on what was happening with the project, even after the focus shifted.

Persily is looking for ways to preserve the work done by the office so it's available if the office is revived later. The office has contracted with Alaska Resources Library and Information Services to maintain the searchable digital database of gas line documents going back 40 years, he said.

A gas pipeline has long been a dream in Alaska as a way to provide energy, create jobs and help to shore up revenues in a state now heavily dependent on oil.