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Murkowski’s Feb. 4 meeting gets mixed results
Petroleum News Alaska Staff
Reactions were mixed to the Feb. 4 meeting of Alaska North Slope gas producers, U.S. and Canadian pipeline companies and state of Alaska officials who got together in Washington, D.C., at the invitation of U.S. Sen. Frank Murkowski. Participants met for about 2 1/2 hours behind the closed doors of a Senate hearing room.
Murkowski dubbed the meeting a success: “The fact that they were all together — this was their second meeting (referring to the producers and pipeline companies) I would suggest is progress in some measure.”
Prior to the meeting, Murkowski said part of its purpose was to identify what role industry saw the state and federal governments playing in the project, including what incentives were needed to move an Alaska Highway gasline forward.
The senator said he was in favor of federal incentives but wanted to know exactly what was needed before the Senate takes action this month on an energy bill that includes gas pipeline incentives.
State Rep. Joe Green, R-Anchorage, who also attended the meeting, said ExxonMobil was steadfast that financial incentives won't help the project, BP was leaning toward Exxon's view but open to listening, while Phillips has proposed a guaranteed price floor.
ExxonMobil representatives have maintained that government incentives are transitory and the project has to stand on its own economic legs.
“Some of us have a little difficulty in understanding that,” Green said. “If it's close economics, it seems to me a small incentive might be enough to push you over.”
State Sen. John Torgerson, R-Kasilof, said the meeting mostly identified barriers to the project.
“They've got a long ways to go,” he said. No progress on who will build gasline Prior to the meeting, Murkowski said he hoped the meeting would help determine who would build a natural gas pipeline from Alaska’s North Slope to Lower 48 markets — the three North Slope producers or the 10 major pipeline companies that are part of the Alaska Natural Gas Transportation System group.
A pipeline company representative at the meeting, who preferred not to be named, told PNA Feb. 5, “absolutely no progress was made on the resolution of that question.”
The producers are “still very clear that they don’t have an economic project yet.” They “can’t seem to agree on what can help make a gasline economic.”
There also continue to be differences, he said, about the route of the proposed line — whether it should follow the trans-Alaska pipeline corridor south to the Alaska Highway through Canada to Lower 48 markets or travel east along the Beaufort Sea to the Mackenzie Delta gas field in Canada and then south to the Lower, which the producers still maintain would be cheaper.
After the meeting Murkowski said any federal energy legislation must explicitly bar an “over-the- top” route that moves gas through the Beaufort Sea to Canada’s Mackenzie Delta.
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