Alaska Lawmakers Question Gas Line's Economics

Natural gas was trading around $7 per 1,000 cubic feet when the Legislature passed the inducement act in 2007 and briefly soared to more than $10 in 2008, making the project more enticing.

But on Wednesday, prices settled at $3.68 per 1,000 cubic feet, and that's not the only thing dropping. The state budget is facing $1.3 billion shortfalls this year and next.

Still, the gas pipeline will not be in service until 2019 at best and state officials say lawmakers need to focus on a long-term prize that could be the state's next economic lifeline.

Mark Myers, Palin's pipeline coordinator and former head of the U.S. Geological Survey, said he is confident the economics for getting Alaska's known 35 trillion cubic feet of gas to market are stronger than ever. Natural gas is likely to be a major player in the nation's push to promote energy independence and clean abundant fuels.

With adequate supplies keeping prices stable, it could serve as a bridge until renewable energy technologies are better developed, even allow greenhouse-gas-emitting coal plants to be replaced with cheaper, more efficient gas-powered plants to generate electricity.