US FERC chief endorses new plan for Alaska natgas

By Yereth Rosen

ANCHORAGE, Alaska, Feb 26 (Reuters) - The chairman of the U.S. Federal Energy Regulatory Commission on Monday endorsed a plan to allow competitive bidding for rights to build a long-envisioned Alaska North Slope natural gas pipeline, FERC said.

FERC Chairman Joseph Kelliher met Monday with Alaska Gov. Sarah Palin in Washington and endorsed the new governor's plan.

"We talked about her efforts on the Alaska natural gas pipeline, which I believe represent the best hope for building a pipeline to bring Alaska's vast natural gas resources to the energy-consuming lower 48 states," Kelliher said in a brief statement.

"The Commission looks forward to her efforts on the Alaska gas line being successful and we stand ready to help to the extent we can."

FERC and the Bush Administration, particularly Vice President Dick Cheney, pushed hard for Alaska to approve a plan fostered by big Alaska oil producers and former Alaska Gov. Frank Murkowski, which failed to gain needed support in the Alaska legislature.

The Murkowski plan -- aspects of which are expected to be resubmitted -- called for 3,500-miles of a natural gas pipeline to run from Prudhoe Bay on Alaska's North Slope to the U.S. Midwest at a cost of about $20 billion, tapping into the known but languishing North Slope reserves of about 35 trillion cubic feet.

The project would deliver 4 billion cubic feet of natural gas per day, or about 6 percent of U.S. natural gas consumption.

Among alternatives Palin advocates is one for a much shorter, all-Alaska pipeline that would deliver gas to tankers that would carry liquified natural gas to the lower 48 states.