Bush advisers don't like gas line measures in energy bill

Posted: Wednesday, June 12, 2002

ANCHORAGE (AP) -- White House advisers oppose a provision in the energy bill that mandates an Alaska route for a North Slope natural gas pipeline.

A 17-page White House analysis of the bill also finds fault with a $20 million Alaska job-training program inserted into the bill by Sen. Frank Murkowski.

The Senate passed the energy bill in April. It is headed for a conference committee which will work out differences with the House version of the bill.

Two dozen government agencies provided their views for the analysis, the document says. A White House spokeswoman said the document contains only ''staff-level technical comments.''

''They don't necessarily reflect the administration's positions,'' said Claire Buchan.

A spokesman for Murkowski said the senator continues to work with the administration on the bill.

Both the House and Senate version of the energy bill would require a North Slope gas pipeline to go south into the Alaska Interior before crossing into Canada.

But banning an ''over-the-top'' route into the Canadian Arctic may prevent builders from choosing the most cost-effective project, two White House agencies say, echoing the position of Alaska's major oil producers.

''The provision could result in the construction of an uneconomic pipeline or prevent construction of the pipeline altogether,'' the analysis says, attributing the view to the Office of Management and Budget and the Council of Economic Advisers.

The White House's support for gas line construction is officially ''route neutral,'' Buchan said.

Advocates of a southern route say keeping the line in Alaska will mean more Alaska jobs and fewer environmental problems.

The route mandate was a high priority for Alaska's congressional delegation and Gov. Tony Knowles.

White House advisers don't like a $20 million Alaska job-training program Sen. Frank Murkowski added to the energy bill, calling it ''a poor use of taxpayer funds.''

The agencies' analysis says limiting the program to Alaska residents ''could set a precedent leading (to) the balkanization of federal training programs.'' The Department of Labor recommends deleting at least the residency requirement and cutting the funding by half or more.

The Council of Economic Advisers said it's ''a poor use of taxpayer funds, because such a large construction project will attract and motivate people to acquire the requisite skills.''

Those agencies and the Federal Trade Commission oppose the bill's offer of $10 billion in loan guarantees for the pipeline. That was a Democratic provision that never produced much excitement in the oil industry. The document makes no mention of the price guarantees in the bill, which some senators said would give Alaska gas an unfair market advantage over other American natural gas.

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