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State responds to gas contract comments
The preliminary best interest findings and determination on the fiscal contract between the State of Alaska and BP Exploration (Alaska), ConocoPhillips Alaska and ExxonMobil Alaska Production were released in May, along with the contract, and on Oct. 20 the state released its response to public comments received during the public comment period.
Commissioner of Revenue Bill Corbus said the public process was initially set for 45 days and extended to 75 days. The state received 2,169 submissions, of which 1,385 or 65 percent favored the contract and 609, 29 percent, opposed it.
Corbus said the department continues to work on the interim fiscal interest finding and the limited liability corporation pieces of the contract process and expects to release those documents in mid-November.
He said that after going through the public comments, the administration continues “to hold that the gas on the North Slope is stranded.” If there was a gas pipeline the gas would not be stranded, Corbus said.
“The public process reconfirms the administration’s belief that the original contract that we issued was good for Alaska and finally that we must as a state proceed expeditiously with a gas line and move Alaska from an oil- to a gas-based economy.”
Release of these public process documents was required under the Stranded Gas Development Act, he said, and the administration believes it is good public process to give the public a response.
Interim finding will include LLC document The interim fiscal finding will be released in November “because it is going to add to the preliminary interest finding everything that has occurred since then and will provide a successor administration a document … they can go to, to find out everything that this administration accomplished and that will give them a platform to go forward and hopefully to consummate a gas line contract,” he said.
Corbus said the release in November will not be a final finding, but an interim finding. This administration will not issue a final finding, he said.
The interim interest finding will include the administration’s “recommendations for changes to the contract that will include an LLC document.” The limited liability corporation pieces of the contract are almost complete, Corbus said.
Steve Porter, deputy commissioner of Revenue, said the administration has “come a long way” with an LLC document, but “there’s still a number of provisions that we’re trying to wrap up with the sponsor group.”
Porter said there will be a number of issues left unresolved in the interim fiscal finding, but what will be included will be “what the state believes it could agree to as a participant” in the gas pipeline. He said an operator has not been named. “We think that the operator-of-the-pipeline question will be one that will be resolved in the future between the parties after we have agreement as to who’s participating.”
“We think that the LLC will be formed simultaneously with the decision on the operator,” he said.
Porter said some 95 percent of the LLC document “are terms and provisions have been agreed to by the sponsor group” so it will provide the public with a “template of what an LLC agreement would look like and what the state’s participation in that LLC would be.” He said certain voting provisions “critical to decision making” are still outstanding, along with some less critical issues.
—Kristen Nelson
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