(Wasilla) - Senator Scott Ogan (R- Rural Mat-Su/Chugiak), Chairman of the Senate Resources Committee, outlined his position today on the call for a special session. Sempra Energy, a large California gas consumer and electricity producer, testified before the Senate Resources Committee last week. Sempra informed the committee that they were interested in buying North Slope natural gas for their planned Mexican Baja re-gasification plant. The gas will be used for distribution to southern California and for generating electricity to the states in the Southwest. Sempra did not testify that any producers were in negotiations with them.

"My experience in the private sector tells me this is the cart before the horse. The three North Slope producers own 87-1/2% of the natural gas on the North Slope," Ogan said. "The way negotiations are signaled between a producer and a customer are through a letter of intent or a memorandum of understanding (MOA)," he further explained.

Ogan said he would support a special session as soon as he sees a letter of intent or a MOU. "I would approve giving the Alaska Natural Gas Development Authority $10 million to study the all Alaska gas line as soon as there is a little more than tire-kicking going on," Ogan said. As a consultant for a gas producer, Ogan's private sector experience is paying off for Alaska. "I asked Sempra to show up with a MOU on at least one producer's letterhead, signed by a CEO-level official of the company." He further explained, "I also asked the producers to step up to the plate and sincerely consider this proposition." Ogan has been known to be vocal in his frustration of the foot-dragging by the producers in commercialization of Alaska's North Slope natural gas.

With most of the attention focused on an Alaska Highway route for a natural gas line, a concept that hinges upon Federal price-floor tax breaks…Ogan had the following comments. "We must not close the door to this opportunity, however, we also must be very cautious in rushing to build a state-owned gas pipeline." He further cautioned, "The cost of construction will be the equivalent of one-third of the principal in the permanent fund. We do not need more poorly thought-out projects like grain towers in Valdez ... there is too much at stake."

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