Ulmer authorizes gas pipeline referendum for ballot

Posted: Wednesday, March 13, 2002

JUNEAU (AP) -- Voters may be deciding in November whether to authorize the state to build and operate a natural gas pipeline from the North Slope to Valdez.

Lt. Gov. Fran Ulmer approved a ballot measure Tuesday that calls for the state to create a public corporation that could issue bonds, contract with companies, and buy and sell natural gas.

The public corporation would not have to pay state or federal income taxes, a savings that proponents say could help what some believe is a financially marginal project.

Alaska's North Slope holds an estimated 35 trillion cubic feet of natural gas, but high project costs and low prices have hampered desires to move it to market.

The state's big oil producers, BP, Phillips and Exxon Mobil, favor a pipeline from the North Slope to the Lower 48 rather than to Valdez. The companies are completing a $125 million study of that project. So far, they say, neither a route through the Arctic Sea to Canada nor a pipeline along the Alaska Highway to the Lower 48 is profitable enough to justify the $15 billion to $20 billion cost.

Investors and state leaders have studied a gas pipeline from the Slope to Valdez since the 1970s. From Valdez, the gas would be shipped to Asia or possibly the Lower 48.

But many, including the major oil producers, view the Valdez project as too expensive to compete with other gas producers that supply Asia.

Proponents of a Valdez project argue it could be built in a spur off a Lower 48 pipeline, and that a public corporation with tax advantages could help make the project feasible.

Anchorage resident Scott Heyworth spearheaded the drive for a November vote. The petition Heyworth submitted had 40,736 signatures, said Virginia Breeze with the state Division of Elections. Petitions need signatures from at least 28,783 registered voters.

A bill that would authorize a similar public corporation is circulating in the Alaska House. If that bill passes, it could pull Heyworth's initiative from the Nov. 5 ballot.

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