Democrats want pipeline talks among 3 groups

Posted: Wednesday, November 16, 2005

Alaska House and Senate Democrats have urged Gov. Frank Murkowski to negotiate contracts with all three groups looking to build a North Slope gas pipeline and have those contracts presented to the full Legislature for consideration.

In a press release Tuesday, the minority caucus noted that according to statements by former members of the state’s negotiating team, Murkowski has ceased talking with two of the groups, in favor of working a deal with ConocoPhillips, BP and ExxonMobil.

The two other groups are TransCanada, which seeks to build a gas line to Alberta, and the Alaska Gasline Port Authority, sponsor of the all-Alaska gas line proposal.

Sen. Johnny Ellis, the Senate minority leader, said all gas pipeline options should be “on the table.” The Democrats repeated their position that a successful gas pipeline proposal should allow other gas companies to ship gas through the pipeline to ensure competition in exploration and production, and that those companies should be allowed to take gas out of the pipeline at a fair price.

A firm project start date should be set, the Democrats added, so that a contract becomes more than an “academic exercise that raise the hopes of Alaskans with no certainty of fulfilling those hopes.”

In addition, the caucus said Alaska workers should have access to training and pipeline jobs, contractors assured contracts, and that Alaska see the maximum economic benefit from the pipeline, meaning a fair share of gas revenues.

Finally, there should be no concessions to oil companies on oil revenues just to get a gas line built, caucus members said.

Elevated oil profits being registered by producers have raised questions over the state’s negotiating stance and whether Alaska should grant financial concessions to the oil companies that would build the pipeline. ConocoPhillips, BP, and ExxonMobil recently reported combined profits of $20.2 billion over a 90-day period, slightly more than the projected $20 billion cost for pipeline construction, according to Sen. Hollis French and Rep. Les Gara, both of Anchorage.

French said it would be difficult for Murkowski to justify offering financial incentives, such as a break on oil taxes, in the light of those record profits.

“The state’s take from North Slope oil production is already a bargain for the oil industry,” French said in a recent Compass editorial.

Tom Irwin, until recently the commissioner of the Department of Natural Resources, has warned that the administration’s proposed gas line deal appeared to include provisions that could violate the Stranded Gas Act, a law that allows for granting incentives to encourage production of gas where it is considered uneconomical.

Irwin contended that the gas wasn’t “stranded” since it isn’t uneconomical to bring to market.

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