Legislator wants to know why MidAmerican talks collapsed; asks Warren Buffet to testify

Larry Persily

Petroleum News government affairs editor

The chairman of Alaska’s House State Affairs Committee wants to know why the state’s gas line talks fell apart with MidAmerican Energy Holdings Co., and he is planning a legislative hearing for April 7 to ask questions.

The public has a right to know what happened, “rather than through dueling press releases,” said Rep. Bruce Weyhrauch, a freshman Republican from Juneau.

“I want to know what happened,” he said, adding the question, “Are there any policy impediments that led to the breakdown?”

MidAmerican walked away from its negotiations with the state earlier this month, ending talks at reaching a long-term fiscal contract in lieu of state and municipal taxes on the company’s proposed Alaska North Slope natural gas pipeline. The company said the governor’s office went back on its acceptance of MidAmerican’s demand for “sole developer status” as a condition for the company to invest money in trying to put together the pipeline deal.

The governor’s office has denied the accusation, responding that it never promised the company an exclusive deal.

Gov. Frank Murkowski said it would not have been in the state’s best interest to block future talks with other potential pipeline developers, solely in the hope that MidAmerican might follow up and build the line.

Weyhrauch said he would invite officials from the administration and MidAmerican to his April 7 committee hearing, along with representatives from the three major North Slope producers. The chairman also said he would invite Carl Marrs, president of Cook Inlet Region Inc., to testify before the committee. The regional Alaska Native corporation had signed on as a partner to MidAmerican’s plan to build an Alaska gas line.

Though State Affairs is not the usual committee to hear oil and gas issues, Weyhrauch said he has two reasons for taking on the issue: “The gas line is tremendously important to the affairs of the state,” he said, and the committee’s jurisdiction includes oversight of the governor’s office.

The chairman said he wants to ask whether the governor did the right thing in rejecting MidAmerican’s demand for a five-year exclusive right to the gas pipeline. The committee can fill the need for an “independent entity to look at the transaction,” Weyhrauch said.

In addition to MidAmerican officials, the legislator wants to reach all the way to the top of the corporate structure. He is trying to reach Warren Buffet, chief executive officer of Berkshire Hathaway Inc., which controls MidAmerican. He wants Buffet to testify at the committee hearing.

“I’m a shareholder. He’ll take my calls,” Weyhrauch said.