Gas, oil plans under review

Borough assembly to pass proposals on to Legislature

Posted: Thursday, November 14, 2002

The Kenai Peninsula Borough Assembly on Tuesday will consider a trio of proposed legislative priorities related to the oil and gas industry for consideration by state lawmakers next session, including support for a natural gas pipeline, regulatory reform and tax incentives to promote further oil and gas exploration.

"It is the intention of the administration that these policies, as amended and approved by the assembly, will guide the lobbying and legislative activities of the borough staff during the coming year related to these issues," said Bill Popp, the borough's oil and gas liaison, in a memo to the assembly outlining the proposed legislative priorities.

Priority No. 1 would support the efforts of the oil and gas industry, the state of Alaska and the federal government to develop a natural gas pipeline to bring Alaska North Slope gas to markets inside and outside Alaska.

Popp did not suggest backing any particular route for such a pipeline, but said the borough should support the project that would "best promote increased economic development in Alaska and that will provide for a consistent, reasonably priced clean energy supply for the long-term benefit of the majority of Alaska's communities and citizens."

The borough, however, is interested in seeing at least a spur from any pipeline bring North Slope gas to the Kenai Peninsula. Both industry and the general public would use that gas supply, borough officials have said.

The second priority would urge the state to reform its oil, natural gas and mineral permitting processes "to provide a clear, consistent, logical and efficient system of permitting that promotes increased oil and gas exploration and production" while protecting the environment with "reasonable and consistent standards."

Popp said Wednesday that in recent discussions with producers, he has heard complaints about state permitting rules. Those have not focused so much on specific regulations, but more on the permitting process itself, which the industry generally considers cumbersome and the cause of much unnecessary delay, he said.

"They point to any number of aspects that are a detriment to getting projects going in an economic manner," Popp said. "It's a confusing, illogical and unclear process."

Environmentalists, however, have warned against undermining either the standards meant to protect the environment or regulations aimed at ensuring residents benefit from development of public resources.

The third priority would have the borough support state moves to implement "reasonable tax and royalty tax incentives" that promote exploration in mature and marginal oil and gas fields that may otherwise be uneconomical.

Popp said incentives would bolster economic development, mean new opportunities for the industry, benefit local communities and ensure continued job security for Alaskans.

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