From Sean Cockerham in Anchorage –

Legislators are pretty excited about today's release of a report on what it would take for them to build an in-state pipeline to bring North Slope natural gas to Interior and Southcentral Alaska.

As skepticism grows about the prospects a big natural gas pipeline to export Alaska’s natural gas to the Lower 48 will happen anytime soon, lawmakers are increasingly turning their attention to the idea of a smaller in-state line just for Alaskan consumers.

It wouldn’t be cheap.

Previous estimates have figured a 24-inch line from the North Slope to tidewater in Southcentral Alaska would cost a $4 billion to build, not counting essential gas-handling and other facilities. Those would raise the total price to between $5.7 billion and $11.8 billion.

Alaska lacks the customer base to support such a project without a big state subsidy.

Petroleum economics consultant Roger Marks put out a report in February suggesting the state subsidy would have to cover at least $4.2 billion of the cost -- or more if there were cost overruns.

Marks suggested in his report that the state could be better off putting its money into pursuing hydroelectric (like the Susitna dam) or potentially using such a big subsidy to increase the chances for a natural gas pipeline to export gas to the Lower 48, a project that would bring in far more money to the state.

But legislators are losing patience with the dream of a gas pipeline to the Lower 48 and say Fairbanks, in particular, badly needs lower cost energy.

The report being release at 1 p.m. today was prepared by Dan Fauske of the Alaska Housing Finance Corporation. The Legislature in 2010 put Fauske in charge of the “Alaska Gasline Development Corporation” effort. The report is supposed to address the viability of the project and how to make it happen.