Congress crafting gas line legislation once again

Posted: Monday, March 24, 2003

FAIRBANKS (AP) -- Congressional committees are crafting more legislation to promote building a natural gas line from Alaska's North Slope to the Lower 48.

But providing financial incentives for the $20 billion line remains a sticking point in Washington.

A subcommittee of the House Energy and Commerce Committee approved a national energy policy bill with many elements similar to legislation passed by the Senate last year.

Meanwhile, the Senate Energy and Natural Resources Committee will hold a series of meetings to complete its national energy policy bill in early April. The committee's staff director, Alex Flint, gave reporters a briefing Friday on the contents of the package to be proposed by the committee's chairman, Sen. Pete Domenici, R-N.M.

Flint confirmed that Domenici's bill will have a section dealing with Alaska gas, the Fairbanks Daily News-Miner reported.

But neither the House nor Senate versions offer financial incentives to bring North Slope gas to the Lower 48.

Flint said the financial incentives approved by the Senate last year would amend federal tax law, so they are under the jurisdiction of the Senate Finance Committee. He said that committee's legislation would be appended to the national energy bill on the Senate floor later.

The Finance legislation is still taking shape. The committee's chairman, Sen. Chuck Grassley, R-Iowa, on March 12 proposed a package of energy-related tax incentives. That included language almost identical to a North Slope gas-tax credit that was approved by the Senate last year but never became law.

John Katz, director of Gov. Frank Murkowski's office in Washington, D.C., said North Slope gas needs help from the Finance committee to reduce the risks posed by the fluctuating price of that commodity.

Last year the Bush administration and some senators from other natural gas-producing states opposed the tax credit for Alaska gas. Murkowski, then still a U.S. senator, got the Senate to add the tax credit to its energy bill anyway by unanimous consent, meaning there was no vote. The energy bill later died after the House and Senate conference committee members were unable to reach agreement on its terms.

This year, the White House has a new team of economic advisers who have not spoken out on the gas line incentives.

Domenici, the Senate Energy chairman, is a co-sponsor of Grassley's bill in the Finance committee, which proposes the version of the tax credit found in last year's Senate bill.

The credit would kick in whenever gas prices at a distribution hub in Alberta, Canada, fall below $3.25 per 1 million British thermal units. The credit would be available for 15 years. If gas prices rose above $4.88, companies receiving the credit would have to start paying the federal government the foregone taxes, following a three-year grace period. The price figures would change with inflation.



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