Legislative Council to hire consultants for gasline

Posted: Tuesday, January 29, 2002

JUNEAU (AP) -- Two additional consultants would be added to assist a legislative committee studying an industry proposal to build a natural gas pipeline from the North Slope to the Lower 48 under a plan approved Monday by a legislative panel.

The Legislative Council voted unanimously to spend up to $282,000 for consultants to advise the Joint Committee on Natural Gas Pipelines. That would bring the total to $814,000 that lawmakers are spending for outside help on the pipeline issue.

Sen. John Torgerson, chairman of the joint pipeline committee, said the panel needs a tax expert and an attorney to represent the Legislature before the Federal Energy Regulatory Commission.

''Most of the decisions made on the gasline will not be made in Alaska. They'll be made in Washington, D.C.,'' and before the federal commission, said Torgerson, a Republican from Kasilof.

Three major oil companies are studying the viability of building a natural gas pipeline from the North Slope to the Lower 48. One proposed route would go partly through Alaska, while the other route would go largely through Canada.

State officials favor a route that generally follows the trans-Alaska oil pipeline and the Alaska Highway to the Lower 48. They have objected to any move to build a Canadian pipeline.

BP, Exxon Mobil, and Phillips Petroleum have completed a yearlong study of whether they want to build a pipeline and what route it should take, spending about $100 million according to the companies.

They're now weighing the final results, but the companies said last summer that preliminary data indicated the project would not be economically sound, and the number of employees working on the line has been reduced.

The industry has asked federal officials for tax incentives and has raised tax questions that his staff cannot answer, Torgerson said.

''We need to be able to figure out what the implications to Alaskans are,'' Torgerson said.

Two consultants currently work for the Legislature, assisting lawmakers in studying aspects of the pipeline proposals.

Patrick Coughlin, a former deputy director of the state division of oil and gas, has a two-year, $364,000 contract to work with lawmakers on pipeline issues.

Northern Economic Research Associates, a Fairbanks firm, was hired earlier this month on a $168,000 contract to study the economics of a pipeline.

Doug Reynolds, a University of Alaska Fairbanks energy economics professor who is part of the firm, will work in Juneau four days a week during the legislative session.

Lawmakers set aside $300,000 for the latter contract and Torgerson said a tax adviser would be paid from its remaining funds.

An attorney from the nation's capital would also be hired to represent the Legislature before FERC at a cost of $150,000.

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