Juneau -- A measure scheduled to be read across in the Alaska House of Representatives Wednesday establishes the Alaska Gas Corporation, the first step toward establishing a natural gas pipeline project from Prudhoe Bay to Valdez. The prime responsibility of the corporation would be to acquire North Slope natural gas and to sell that gas to the marketplace.

"This project conservatively equates to $53 billion of new income for the State of Alaska over the next 28 years," said Representative Jim Whitaker (R-Fairbanks), Chairman of the House Special Committee on Oil and Gas, which sponsors the legislation. "The State of Alaska is currently facing an extreme budget imperative. Without an additional, substantial, and essential revenue stream, which this project will provide, cutting the budget and implementing taxes will only be a short-term solution."

The bill stipulates that the construction and maintenance of a natural gas pipeline, gas conditioning facility, liquifaction facility, and liquid natural gas sea transportation system will be contracted to private businesses in Alaska.

"State ownership of this project is critical in order to overcome the enormous tax burden associated with private sector ownership," Whitaker said. "Alaska has a substantial natural gas resource on the North Slope that is virtually untapped. The Constitution of the State of Alaska clearly states that it is the responsibility of the legislature to provide for the utilization and development of all natural resources for the maximum benefit of the people.

"We cannot ignore this responsibility," Whitaker said. "In light of the ongoing merger negotiations between BP Amoco and ARCO, we may soon see less competitive North Slope operating procedures, which will likely result in a situation less beneficial to the State." The first step in the formation of the corporation is a feasibility study that must be presented to the legislature by January 2001. The study will include information relating to gas supply, engineering, technical, financial, regulatory and market access matters.