Stumping for the governor’s gas pipeline plan, the state’s natural resources chief told about 35 Kenai Peninsula residents the state is “high-centered” and not going anywhere toward getting a line down from Alaska’s North Slope.
“The purpose of (the Alaska Gasline Inducement Act, or AGIA) is to facilitate and move the gasline forward,” DNR Commissioner Tom Irwin said Tuesday evening at the Challenger Learning Center of Alaska in Kenai.
Irwin said the goal of Gov. Sarah Palin’s administration is to protect the interests of Alaskans and regain leverage in negotiating with big oil to bring Alaska natural gas reserves to market.
In some areas, he said the state is willing to pay in order to induce natural gas producers to build the pipeline. However, he said the state is demanding certain things.
Before Gov. Frank Mur-kowski left office last year, his administration had reached a gas pipeline agreement with oil and gas companies, but the state Legislature failed to approve the deal.
Not faulting the oil companies for looking out for the interest of their shareholders, Irwin said the job of Palin and DNR “is to look out for Alaskans. That’s good business,” he said.
One incentive Palin is offering is $500 million, which the state will pay as a dollar-for-dollar match to pipeline builders for expenses they incur for permitting, engineering and field work, according to Kurtis Gibson, acting deputy director of the DNR’s Oil and Gas Division, who accompanied Irwin.
The governor has said she is confident the state’s half billion dollars will be returned in the form of lower tariffs that will result in high royalties from production.
One of the demands the state will place on the pipeline company is that the state will train its own workers, Irwin said.
“Our hiring sites will be in Alaska,” he said.
He told the Kenai audience the state is willing “to give them 10 years of incentives on the gas tax. Ten years is reasonable,” he said.
Murkowski’s earlier agreement had offered tax breaks to oil and gas producers for up to 45 years, according to Irwin.
He also said the state would reserve to right to take its royalty share in natural gas rather than in cash.
The state also is demanding five take-off points from the pipeline in Alaska in order to assure a steady energy supply to Alaskans.
“Alaskans own the resource,” Irwin said.
Posing the question, “What if we get an open season and the producers boycott?” Irwin said it is unlikely.
“Do you think there’s going to be an economic (pipe) line, reserves you can book, and you’re going to say, ‘We’re not going to play’?
“I’ll bet you there’ll be a gas reserves tax the next time around,” he said.
“AGIA’s the right vehicle,” Irwin said, adding that the rest of the country is desperately in need of Alaska gas.
He said Palin wants AGIA passed during the current legislative session, with requests for applications out in two months, back to prospective companies in three months, followed by a 60-day review period for Alaskans to take a look.
Adding 1 1/2 months for the commissioner’s review and for DNR to get the deal back to the Legislature would ready the project for environmental work next April, Irwin said.
Moving away from the gasline topic, Irwin also pledged to do something about the hydrocarbon pollution issue in the Kenai River.
“We’re going to do something to protect that river. We’re gonna fix it,” he said.
“Shame on us for not doing something (already),” Irwin said, asking the audience for any suggestions they might have for lowering aromatic hydrocarbon levels in the river.
Phil Hermanek can be reached at email@example.com.
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