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Providing coverage of Alaska and northern Canada's oil and gas industry
May 2008

Vol. 13, No. 18 Week of May 04, 2008

Oil Patch Insider

UAA science building to carry ConocoPhillips name; Court upholds Valdez tanker tax

ConocoPhillips Alaska has pledged $15 million to support science and engineering programs at the University of Alaska Anchorage. UAA said April 30 that the gift is the largest the company has made in Alaska and also the largest single corporate gift the University of Alaska system has received.

In recognition of the pledge, and the $20 million in unrestricted support ConocoPhillips has contributed to UA since 1999, UAA’s new Integrated Science Building will carry the ConocoPhillips’ name. The university said $4 million of the gift will fund equipment for the state-of-the-art ConocoPhillips Integrated Science Building, due to open in the fall of 2009; $11 million will establish the ConocoPhillips Arctic Science and Engineering Endowment.

The university called the gift “unprecedented” and said it will be used to help increase understanding of engineering and the natural sciences in northern climates and universities.

“This gift is incredibly valuable to the university because it can be used for what we believe best serves the academic needs of our students and faculty,” said Douglas Causey, UAA’s vice provost for research and graduate studies. In addition to program expansion, the money will be used to purchase equipment for research and teaching labs in the building and provide support for faculty and student research in science and engineering.

“This pledge to the University of Alaska continues our tradition of investing in quality training and education opportunities in Alaska,” said Jim Bowles, president of ConocoPhillips Alaska. “Our company is investing in the university’s Arctic science and engineering programs to create the scientists and engineers of tomorrow.” He said ConocoPhillips hopes that funding these programs at UAA will encourage students to stay in Alaska and work in Alaska as well as fostering innovative thought in the state.

Chancellor Fran Ulmer said the gift exemplifies university-community partnerships. “ConocoPhillips knows that the university’s mission to provide education, training and research helps to develop Alaska’s economy,” Ulmer said. By increasing the number of engineers and scientists trained locally, employers will be able to do more hiring locally, she said.

“By building the programs and providing the resources necessary for students to enter the workforce, more of our graduates will be able to be successful in Alaska’s high-demand job fields.”

UAA said that when fully funded, the ConocoPhillips Arctic Science and Engineering Endowment’s initial contributions of $11 million will generate nearly $500,000 in interest the first year that distributions will be made in 2016.

Supreme Court upholds Valdez tanker tax

The Alaska Supreme Court has overturned a Superior Court decision and found the City of Valdez’s tanker tax constitutional. The court said in an April 25 decision in City of Valdez v. Polar Tankers that it disagreed with the Superior Court’s finding that the way the tax is calculated, the apportionment formula, violates the due process and commerce clauses of the federal constitution because it creates a risk of “duplicative taxation.”

“We hold that the apportionment formula does not create a risk of duplicative taxation; it was therefore error to declare the ordinance unconstitutional as applied,” the Supreme Court said.

Several shippers, including Polar Tankers, a ConocoPhillips subsidiary, challenged the Valdez tax, an ad valorem property tax on large boats and vessels not used for commercial fishing and not docking at city-owned docks which the city adopted in 1999.

The Valdez Marine Terminal, where tankers dock, is owned by the owners of the trans-Alaska oil pipeline.

The city council adopted an apportionment formula in 2000 and several tanker owners joined Polar in a suit, filed in 2000. The city settled with all except two over the next three years. The Superior Court issued its final judgment in early 2006 and three parties, including Valdez, appealed. SeaRiver, the ExxonMobil tanker company, dropped its appeal and appeals by Valdez and Polar were consolidated.

Alaska hires PR firm to promote gas line

The State of Alaska recently hired Needham, Mass.-based MCB Communications to start a public relations campaign to promote efforts to build a natural gas pipeline.

According to MCB’s Web site, the firm specializes in “media placement” and “reputation building,” among other areas of expertise.

In an Anchorage Daily News article in early April, Kurt Gibson, deputy director of the state oil and gas division, said, “The idea is to talk with somebody who is a communications consultant, who has direct access, kind of desktop Rolodex access to major media outlets in major population centers, so that the governor’s team can talk directly to those major media outlets.”

A notice in the Boston Business Journal said the effort is designed “to promote greater understanding of the $30 billion project throughout the rest of the country.”

Although MCB won the job after a competitive bid, the state did not put the contract out to the broader public, choosing instead to target select companies. The state can bypass the public notice process for smaller contracts.

Gov. Sarah Palin’s deputy press secretary, Sharon Leighow, said the RFP was limited to $50,000 and MCB bid $45,000.






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