The purpose of this Order is to establish a management system for oversight of the Trans-Alaska Gas System (TAGS), including designating the lead agency and procedures for processing and adjudicating Yukon Pacific Corporation Is (YPC) application for a common carrier pipeline right-of-way lease. This Order defines responsibilities of State agencies and procedures the State will follow during the processing of the right-of-way lease and monitoring of preconstruction, construction, operations, closure and rehabilitation of TAGS. The management system established by this Order shall also encompass the activities of Northwest Alaskan Pipeline Company (NWA) with regard to its pipeline proposal, and routing or proximity issues that relate to the Trans-Alaska Pipeline System (TAPS) and the TAGS.

FINDINGS:

1) It is in the best interest of the people of the State of Alaska that North Slope gas is expeditiously brought to market with minimum practicable effect on the environment, positive effects on the socioeconomic climate of Alaska, and safe design and construction.

2) Application processing, preconstruction and construction of TAGS will involve many State agencies to review the right-of-way lease application, preconstruction documents and plans, construction monitoring, permitting, licensing, taxing, or offsetting the impacts on Alaska1 5 environment, its economy and its people. For this reason, close coordination among these agencies is necessary.

3) The review, processing and monitoring of past pipeline project rights-of-way of this magnitude (TAPS and NWA) have been coordinated through a single point of contact established in the Office of the State Pipeline Coordinator.

4) The Alaska Natural Gas Transportation System (ANGTS) is currently scheduled for construction along a similar alignment with TAGS and the existing Trans-Alaska Pipeline System.

5) Portions of the Trans-Alaska Pipeline System (TAPS) and TAPS Fuel Gas Pipeline are paralleled or crossed by the TAGS route and their integrity is vital to the State of Alaska.

6) The President of the United States, through the Office of the Federal Inspector, has established a single point of contact with the federal government for matters relating to ANGTS.

7) The Bureau of Land Management (BLM) has been established as the lead federal agency to process the TAGS Environmental Impact Statement (EIS) and issue the federal grant of right-of-way to YPC.

8) It is desirable that the State have a single point of contact for right-of-way matters to ensure adequate coordination among State and federal authorizations and, where appropriate, develop substantially similar terms and conditions in these documents.

ORDER:

In light of the foregoing, I, Steve Cowper, Governor of the State of Alaska, order and declare the following:

1) Each State agency shall comply with applicable provisions of this Order to ensure that where appropriate, substantially similar terms and conditions are developed, implemented and placed on all federal, State and local authorizations for the TAGS, and that a schedule is developed to implement this process. This includes the federal EIS, U.S. Army Corps of Engineers (USACE) 404 permit, State 401 certification, federal and State rights-of-way and associated stipulations.

2) The Department of Natural Resources, through the State Pipeline Officer, shall be the lead agency for the State processing of the AS 38.35 right-of-way and the review and coordination of the federal grant of right-of-way and the associated stipulations. In addition, the State Pipeline Officer will be the lead for the State for monitoring, preconstruction, construction, operation and closeout of the TAGS.

3) Each department shall immediately appoint a liaison officer who will be available to do necessary work to process the State right-of-way application, Alaska Coastal Management Program (ACMP) consistency review, federal EIS and other related State and federal authorizations for the TAGS on a schedule established by the State Pipeline Office. Liaison officers shall represent their departments in matters relating to processing the State right-of-way application, issuance of respective authorizations and monitoring of the TAGS project to assist the State Pipeline Officer and the State Pipeline Officer's staff in carrying out their responsibilities. Each liaison shall keep the State Pipeline Officer informed of actions taken in the TAGS project.

4) The State Pipeline Officer shall have the authority and responsibility for planning and coordinating the input and activities of the liaison agencies and their staff for purposes of processing State authorizations and monitoring of field activities. At present, these agencies include the Departments of Natural Resources, Fish and Game, Environ mental Conservation, Transportation and Public Facilities, and Law, and the Division of Governmental Coordination. Other agencies are expected to assign a liaison officer who has other duties as well. If an agency's monitoring responsibilities expand to the point where a full-time liaison officer is needed, it will appoint one, with the concurrence of the Pipeline Officer.

5) The Division of Governmental Coordination (DGC), through its liaison officer, shall coordinate the processing of the ACMP consistency determination(s) related to the ANGTS and TAGS as provided under AS 44.19.145 and 6 AAC 50. The DGC liaison officer shall, in cooperation with the State Pipeline Officer, also coordinate the State's review of the TAGS's federal EIS and, with the exception of rights-of-way and their associated stipulations, other permits or authorizations requiring involvement of more than one State agency (e.g., Corps of Engineers and 404 Permitting).

6) If a department's responsibilities require staff additional to the liaison officer, the department shall, with concurrence of the State Pipeline Officer, appoint additional staff. This staff will be under the supervision of the liaison officer or the officer's designee.

7) All applications for permits and other authorizations which the State may require of the sponsor of TAGS shall be submitted by the sponsor to the State Pipeline Officer. The State Pipeline Officer shall forward the applications to the Division of Governmental Coordination or to the appropriate department liaison officer, who shall ensure that they are properly processed. The State Pipeline Officer shall receive a copy of the permit or other authorization issued.

8) To the extent consistent with applicable law, departments shall delegate permit or other authorization signatory authority to their liaison officers and/or to staff of the liaison officer.

9) Except for routine or follow-up informational inquiries by or to departmental liaison officers or other department staffs, as may be mutually agreed upon by the respective Commissioner and the State Pipeline Officer, all correspondence relating to pipeline monitoring between a department and the TAGS sponsor, the ANGTS sponsor, the TAPS sponsor or the United States Government shall be routed through the Office of the State Pipeline Officer and be reviewed by him.

This does not apply to agency liaison officers' communications with their respective agencies. The State Pipeline Officer and a department Commissioner may, if mutually agreeable, modify or amend this provision as it relates to that department's communications regarding pipeline monitoring.

10) Each department shall keep a full set of files in a central location on all aspects of its activities relating to the TAGS.

11) The State Pipeline Officer shall establish those field monitoring teams and activities pertaining to TAGS and related facilities that the officer determines, with the concurrence of affected agencies, are in the best interests of efficiency and effectiveness. Such monitoring teams may be composed of staff from a number of agencies. Responsibilities and authorities of affected agencies may, consistent with law, be delegated to team members regardless of their department affiliation, and those team members shall conduct the entire field monitoring program of the agencies involved. The State Pipeline Officer shall appoint the team leader.

12) All applicable departments shall prepare and submit an annual budget request for all costs which are reimbursable under AS 38.35.140(b) and all other costs associated with the TAGS project. These budget requests will be reviewed and will require approval by the State Pipeline Officer. All such budget requests will be submitted as a consolidated unit to the Division of Budget Review in a manner established by the Division. Costs will not be reimbursable unless proposed budgets are approved by the State Pipeline Officer. The State Pipeline Officer shall have the authority to negotiate reimbursement agreements for the TAGS and ensure that reimbursement is secured promptly for costs incurred under approved budgets.

13) To the extent allowed by law, before taking enforcement action against the TAGS project sponsor, its agents or contractors for violation of State law relating to design, preconstruction, construction, operation and termination of TAGS, the department involved shall consult with the State Pipeline Officer and consider the Officer's advice. Whenever feasible, and the department involved and the State Pipeline Officer agree on a particular course of action, such enforcement action shall be undertaken under the grant of lease and right-of-way issued by the Department of Natural Resources. For the purposes of this section, consultation is considered "infeasible" only if the nature of the violation requires prompt or immediate action, and the State Pipeline Officer or the Officer's designee is not available.

14) In the event of a dispute between departments regarding a matter covered under this Order, including matters involving annual budget requests, the departments involved will consult with the Department of Law, and (a) if the dispute involves the right-of-way lease and the matter cannot be resolved between a department and the State Pipeline Officer, the affected department Commissioner should attempt to resolve this matter with the Commissioner of Natural Resources, and the decision of the Commissioner of Natural Resources shall be final; (b) if the dispute involves a question covered by a department's statutory or regulatory authority, the dispute will be resolved by the department responsible for administering that law, and the decision of that department Commissioner is final. In all such disputes, affected Commissioners shall seek the views of the State Pipeline Officer, and consider these views before making a decision; (c) in disputes between Commissioners other than in cases subject to (a) and (b) above, the Office of the Governor shall resolve the matter.

15) The terms of this Order do not apply to those subject areas specifically excluded from the jurisdiction of the State Pipeline Officer.

16) This Order is for administrative purposes only, and does not create any third party rights.

17) The State Pipeline Officer is the designee of the Commissioner of the Department of Natural Resources.

By: S/S Steve Cowper            
Steve Cowper                    
Governor of the State of Alaska