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Administration, Alaska delegation: North Slope gasline needs federal incentives Committee will move forward with price-floor tax incentives for gasline, absent alternative plan from administration Steve Sutherlin PNA Managing Editor
Unless the administration develops an alternative incentive plan, the House-Senate conference committee on H.R. 4 is prepared to move ahead on a North Slope gasline provision using price-floor tax incentive language contained in the Senate version of the energy bill, Sen. Frank Murkowski said in a statement.
After Sen. Ted Stevens, Rep. Don Young and Murkowski met with U.S. Energy Secretary Spencer Abraham and administration officials July 18 at the White House to discuss potential federal incentives for the gasline, Murkowski said, “The delegation made clear our position that we are prepared to move forward with our current proposal unless the administration tables a workable alternative.”
Murkowski said the administration expressed concerns over the specific price mechanisms in the Senate energy bill, but it did commit to find common ground.
“Without some federal safeguards, Alaska natural gas will stay in the ground for a very long time,” Murkowski said. “The President recognizes the critical role Alaska gas plays in securing our energy supply and meeting our future needs. I am encouraged by the overwhelming willingness of each of the departments to move us forward on this project.”
Knowles pushes gasline, ANWR In a July 22 letter to 61 members of the U.S. House and Senate, Gov. Tony Knowles urged support for an Alaska Highway natural gas pipeline and for oil development in the Arctic National Wildlife Refuge.
Knowles told lawmakers that Alaska would join federal efforts to provide financial incentives and other assistance to facilitate pipeline construction.
“The state views this project as an important component of our own economic development,” Knowles said. “I have proposed the use of tax-exempt Alaska Railroad bonds to finance the construction of the pipeline, and I support a number of other means at the state’s disposal to advance this project.”
Knowles said the state wants to make sure the line is built on the Alaska Highway route, which he said has clear advantages over a route that crosses under the Beaufort Sea.
The Beaufort route “faces enormous environmental and regulatory obstacles and strong opposition from North Slope Eskimos because of its potential risk to subsistence whaling in the Beaufort Sea,” Knowles said.
Both the House and Senate bills prohibit the northern route.
Knowles advocated the price-floor tax incentive for the gasline.
“Buffers against commodity price swings, and other incentives are accepted approaches to mitigating the high risk associated with vital projects like the Alaska gas pipeline,” he said.
Knowles said Canada is in no position to criticize the tax credit provision, and it is not true that tax incentives for the Alaska Highway route would destroy the viability of a Mackenzie Valley pipeline.
“Various types of incentives to encourage investment are a fixture in the Canadian oil patch, the American industry, and throughout the world’s petroleum sector.
“Alaska believes there is no conflict between the two projects, and both are needed to meet the growing demand for clean-burning natural gas.”
Knowles said much of the gas transported through a Mackenzie Valley pipeline likely would be used for development of oil sands deposits in Alberta, and in recognition of that, Alberta and the Yukon have expressed strong support for an Alaska Highway gas pipeline and a separate Mackenzie Delta pipeline.
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