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Gas line negotiations to include lawmakers Governor: Special session of Alaska Legislature could begin Sept. 19, depends on poll of legislators by leadership Kristen Nelson Petroleum News
Alaska Gov. Frank Murkowski said Aug. 30 that he will call a special session of the Legislature for Sept. 19, subject to indication from legislative leadership that such a session to work on the gas line fiscal contract would be productive.
He said the administration met with House leadership, including Speaker John Harris and Majority Leader John Coghill and representatives of the producers Aug. 29. The producers agreed that the best way to proceed was to involve members of the Legislature selected by the leadership in the negotiations with the producers over issues in the contract that need to be resolved.
The Legislature identified items that it needs to have resolved in the contract, including fiscal certainty, project labor agreements and dispute resolution. The governor said the producers indicated these items are negotiable and that they are willing to pursue them.
The Legislature has already met in two special sessions this summer.
House and Senate could not agree on revisions to the state’s production severance tax in the regular session or the first special session. The second special session ended with agreement on a new production tax, but no agreement on amendments to the Alaska Stranded Gas Development Act necessary for the administration to move ahead on the fiscal contract the administration has negotiated with North Slope producers BP, ConocoPhillips and ExxonMobil.
Murkowski said members of the House and Senate are being polled by leadership on the merits of a special session and if there is favorable response the special session would be called for Tuesday, Sept. 19.
Legislators would be selected by leadership to be part of the negotiating team based on committee chairmanship or areas of expertise, he said.
Reserves initiative an issue The governor lost a primary election bid Aug. 22.
He said that if a contract isn’t passed and signed before the general election, and the gas reserves tax initiative tax is passed, negotiations will turn into litigation and “we’re stuck for two years.”
The Legislature cannot repeal, or substantially amend, an initiative for two years after it is passed, according to an opinion the governor obtained from Attorney General David Márquez.
The governor said the producers have said they will not accept a contract if the reserves tax passes — if the contract is signed before the election, however, it contains provisions which effectively nullify the gas reserves tax.
Murkowski said the reserves tax, which taxes gas at Prudhoe Bay and Point Thomson, would add $8 billion to $10 billion to the cost of a gas projects.
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