'Big Three' needs to make dream a reality

Posted: Sunday, October 09, 2005

On Thursday, following months of negotiations out of the public eye, Gov. Frank Murkowski submitted a proposal to ExxonMobil, BP and ConocoPhillips that outlines terms for building a natural gas pipeline from the North Slope.

Details of the state's proposal are confidential, although the governor has said he believes the contract represents the best offer the state has put on the table.

According to the governor, any deal struck must include provisions that the state get a fair share of the profits; that Alaska residents have an opportunity to access the gas; that other companies have access to the line if more gas is discovered; that the state own part of the pipeline; and that Alaska workers and companies be used in the line's construction to the greatest extent possible.

It's now up to the "Big Three" producers to give the state an answer, and here's hoping they'll respond promptly.

What the state is asking is not too much, considering the gas is, after all, a natural resource belonging to us.

For too long, Alaskans have been stuck in a holding pattern of sorts, left to wonder if and when the gas line — which has the potential to provide billions of dollars in revenue to the state as well as cheap energy for Southcentral — will be built.

Now that it appears there is a viable contract offer, it would be greatly appreciated if the companies would put their cards on the table.

The producers hold the leases on the underground gas reserves (which are estimated to total somewhere in the neighborhood of 40 trillion cubic feet), but Alaska has every right to push for them to develop this resource.

A study commissioned by the companies themselves indicated they believe building a gas line to be economically viable, even at prices below today's going rate. That means the companies know the gas will make them money.

What's left to be seen is whether they'll be willing to work cooperatively with the state to ensure a fair deal is struck. It appears as if the only thing holding them back from moving forward is a desire to get the best deal possible. As companies whose purpose is to make a profit, this is an understandable perspective.

However, the fact that the companies could begin a project tomorrow that would begin returning profits to them in the relatively near future (a pipeline project is likely to take around a decade to complete), means that the longer they hold out, the more it seems as if we as a state are being held hostage by companies intent on squeezing every last dime out of our state's resources.

Alaska has been waiting too long for a gas line project to come to fruition. Now is the time for a deal to get done, and the ball is squarely in the producers' court. Hopefully, they'll agree to a project that is beneficial to both sides.

Our state needs the oil companies. But they need us, too, and it's time for them to acknowledge this fact. If a deal isn't struck quickly, it may be time for the state to look into alternative methods (i.e. re-examining the tax structure on North Slope properties) to move the project forward.

Let's hope it doesn't come to that.

Let's hope the producers sign on to make this project — a project likely to provide handsome rewards to both sides — become a reality.

And sooner, rather than later. Alaskans are tired of dreaming of a gas line. It's time for the producers to wake up and help our dream become a reality.

Subscribe to Peninsula Clarion

Trending this week:


© 2017. All Rights Reserved. | Contact Us