Stock analyst critical of Alaska gas line provisions in energy bill

Larry Persily

Petroleum News Juneau Correspondent

An energy industry analyst for a major investment firm says the potential spending on a federal loan guarantee for the proposed Alaska natural gas pipeline would do more good for the nation’s energy shortage if it had been directed at helping independent oil and gas producers around the country.

He says the same thing about the proposed federal tax credits to boost the use of corn-based ethanol fuels.

“The needless and politically motivated spending on loan guarantees for the Alaska gas pipeline and ethanol subsidies could have been reallocated to meaningful tax credits for E&P independents — the only companies that really contribute to slowing down the decline in U.S. output of oil and gas,” analyst Wayne Andrews of Raymond James and Associates’ Houston office said in a Nov. 24 briefing report posted on the company’s web site.

“Unfortunately, we live in the real world, not a fantasy one,” he concluded in his report.

The ethanol tax credits and Alaska pipeline loan guarantee are among the hundreds of provisions in the national energy policy bill that awaits senators when they return to work after the holidays. Though the House passed the bill by a wide margin, the Senate fell two votes short last month in voting to cut off debate and pass the measure.

Senate leaders could bring up the bill for another vote at any time after the chamber reconvenes in January.

Energy bill would mean little to oil and gas companies

“Specifically, the bill’s provisions as they relate to oil and gas will not materially change the dwindling supply of domestic petroleum or encourage energy companies to spend more money extracting oil and gas from the ground.”

Andrews did not return a phone call to Petroleum News for comment on his report.

“We recognize that politics demands compromises, and obviously tax dollars are not limitless, but much more would have to be done to make the drilling incentives in the bill relevant to the companies that they are supposed to incentivize,” he said in his report.