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November 2001

Vol. 6, No. 16 Week of November 11, 2001

Daschle wants to axe ANWR, substitute gasline, heavy oil tax incentives

ANWR vote will depend on mood of the momemt, says Arctic Power, and “bullets” akin to Chretien’s threats to cut off energy supplies

Kristen Nelson & Kay Cashman

PNA Editor & Publisher

At a Nov. 7 public hearing in Kenai, the Alaska Legislature’s Joint Committee on Natural Gas Pipelines was told Alaska North Slope gas legislation is tangled up in Congress with the effort to open the Arctic National Wildlife Refuge to oil and gas exploration.

John Katz, director of state/federal relations and special counsel to the governor, told the committee that the energy bill passed by the U.S. House which authorizes ANWR exploration and prohibits an over-the-top gas pipeline, could be proposed as an amendment to fast-moving bills on the Senate floor. One of four possibilities is the Democrats’ economic stimulus package, which an Arctic Power source told PNA Nov. 7 was expected to move to the Senate floor in the next few days.

There is broad, bi-partisan support in the Senate for commercializing Alaska North Slope gas, Katz said, but Senate Majority Leader Tom Daschle, D-South Dakota, and Senate Energy and Natural Resources Committee Chairman Sen. Jeff Bingaman, D-New Mexico, want to remove ANWR from the debate and substitute a gas pipeline from Alaska’s North Slope and perhaps tax incentives for heavy oil development.

“Our delegation is fighting against the separation of Alaska gas and ANWR,” said C.J. Zane, with Dyer, Ellis and Joseph, a Washington, D.C. firm that serves as an adviser to the Legislature. Their message, he said, is, “If you want our gas, you give us ANWR.”

But Zane said Daschle would love to offer this instead as a quid pro quo: “No on ANWR, yes on gas line.”

Daschle has pulled the Senate energy bill out of committee and has his own staff working on it – a move that Duncan Smith of Dyer Ellis and Joseph said is very unusual. The last time this parliamentary maneuver was used was by Majority Leader Lyndon Johnson in 1960. Bingaman’s staff is working on energy recommendations to send to Daschle with a goal of delivering those Nov. 9.

Zane said Dashel is going to put some sort of energy bill on the calendar – but that doesn’t mean he will move it.

Arctic Power told PNA Nov. 7 it is more likely to see the first Senate vote on ANWR in an amendment to another bill, such as the economic stimulus package. The organization expects a vote for cloture to be filed on the amendment. It will need 60 votes to remain attached to the bill.

Do they have 60 votes?

Arctic Power said no one will know until the vote is cast, that no polling of ANWR votes has been done recently.

“It will be surprisingly close either way, I think, but so much depends on the mood of the moment, the psychology of the day,” an Arctic Power spokesman told PNA Nov. 7.

“Bullets” akin to Canadian Prime Minister Jean Chretien’s threats to cut off oil and gas to the United States, will make the difference in the final moments, Arctic Power said.

“The spin that is going to be put on it — whether it catches people’s attention and is seen as a critical national security issue — is what will make the difference when it’s time to vote,” Arctic Power said.

What will catch the public’s attention?

“The president and leaders of Congress can strongly tie ANWR to national security. … Even a Democrat such as Sen. Mary Landrieu of Louisiana, who has come out in favor of drilling, could make the difference. She could stand up and make a strong statement at the time of the vote that might influence members of the Senate,” Arctic Power said.





Foothills might get window of opportunity

A number of Arctic gasline bills and proposals are floating around Washington, D.C.

At a Nov. 7 public meeting in Kenai, John Katz, director of state/federal relations and special counsel to the governor, told the Alaska Legislature’s Joint Committee on Natural Gas Pipelines that he has drafted language for federal legislation for Alaska Gov. Tony Knowles but the governor has decided not to propose it at this time.

The North Slope producers have submitted a gasline legislative proposal to Congress.

Foothills Pipe Lines Ltd. favors keeping the existing Alaska Natural Gas Transportation Act, but would consider environmental amendments. The Calgary-based company has the rights from the United States and Canada, dating from the late 1970s, to build a gas pipeline along the Alaska Highway route.

And C.J. Zane told the committee Sen. Frank Murkowski, R-Alaska, is considering introducing a proposal – one he hasn’t put on the table yet – that would allow Foothills a window of opportunity to get its project under way.

Zane, with Dyer, Ellis and Joseph, a Washington, D.C. firm that serves as an adviser to the Legislature, said Murkowski is looking at a window that would extend “perhaps through 2003.” If Foothills does not have a project put together by that time, Congress would end its priority rights to construct a gasline.

Both Katz and Zane said Foothills has been working with former partners and appears close to a memorandum of understanding on its “former partners’ liability issue.”

At the same committee hearing, Ed Small, with Cambridge Energy Research Associates, provided an updated forecast for natural gas prices and demand in the near future. Small predicted that the North American economy, currently weak, will recover next year and the price of natural gas will rise as high as $3.25 BCF by the end of 2002.


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