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March 01, 2004 --- Vol. 10, No. 20March 2004

Alaska gas line price support will be dropped from energy bill

The federal energy bill expected to go before the U.S. Senate will not include the commodity-risk provision to protect North Slope natural pipeline.html'>gas pipeline developers from periods of low commodity prices, according to the office of Senate Energy Committee Chair Pete Domenici, R-N.M.

Although a draft of the bill released by the committee more than two weeks ago included the price-support provision, it will be taken out before the measure goes to the Senate floor for a vote, said an aide to the senator.

The committee version of the bill includes the tax credit provision to cover the risk to North Slope producers if gas ever drops below $1.35 per thousand cubic feet at the wellhead. The provision originated with the Senate Finance Committee last year, and when the Energy Committee last month drafted its substitute version of the energy bill it simply picked up all of the tax language from the Finance Committee.

Senate leaders don’t expect to bring the new version of the bill to the floor before the third week of March, and the gas line price-support language will be deleted before then, Domenici’s aide said.

The third week of March is the earliest the bill will reach the floor, said John Katz, director of the state’s Washington, D.C., office. “Clearly, even the slimmed-down version is going to be in for a little more surgery.”

The White House objects to the bill’s multibillion-dollar price tag of tax incentives and appropriations, and House and Senate leaders still disagree whether to include a liability waiver for manufacturers of the octane-enhancing gasoline additive MTBE. The Senate Energy Committee version does not include the waiver — which was in the bill that failed to pass the full chamber last fall — and House leaders want it back in.

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