Congress has passed and sent to the president bills which contain gas pipeline enabling provisions, loan guarantees for up to 80 percent of the cost of the project, a seven-year pipeline depreciation tax credit and an enhanced oil recovery tax credit.
The provisions were included in bills which passed the Senate today.
The military construction conference report includes provisions which direct the Federal Energy Regulatory Commission to quickly permit the pipeline once certain requirements have been met; designate FERC as the lead agency for the National Environmental Policy Act process; create a federal coordinator within the executive branch to coordinate federal agencies; require a single environmental impact study, expedite judicial review; and allow for future pipeline expansions.
The bill also provides a loan guarantee authorizing the Secretary of Energy to enter into agreements with holders of FERC certificates of convenience and necessity for payment on project loans. The amount of the loans would not exceed 80 percent of the total capital costs or $18 billion.
Provisions included in the jobs bill include the enhanced oil recovery tax credit and the seven-year pipeline depreciation tax credit.
BP Exploration (Alaska) gas pipeline spokesman Dave MacDowell said passage of the gas pipeline provisions is “a positive development” and applauded the state’s congressional delegation “for their hard work and leadership on this effort.”
“Passage of these provisions will get us one step closer to the next phase of permitting and engineering, and that’s the billion-dollar phase,” he said. Other work under way includes negotiations with the state of Alaska on a fiscal contract and project cost reduction.
MacDowell also said BP hopes “that delivery of the U.S. federal legislation will help encourage development of an efficient Canadian regulatory process.”
ExxonMobil spokesman Bob Davis said ExxonMobil sees passage of the federal legislation as of “paramount importance to us” because it addresses “a fast-tracking of the permitting process and also it lays out a process for dispute resolution … important for a project of that magnitude because any delay would negatively affect the economic” of a project of this size.
ExxonMobil is also involved in negotiations with the state and with project cost reductions.
The “other critical component is regulatory certainty in Canada, because so much of the line would come through Canada,” Davis said.
Editor’s note: See complete story in Oct. 17 issue of Petroleum News.