Phillips would endorse southern route in exchange for federal gasline legislation

Kristen Nelson

Joe Marushack of Phillips Alaska Inc. told the U.S. Senate Energy and Natural Resources Committee at an Oct. 2 hearing in Washington, D.C., that Phillips was willing to endorse a southern route for the gas pipeline in exchange for regulatory and fiscal certainty.

The debate over the route has “obscured the need for adequate enabling legislation to allow fast-track regulatory authority for construction of the pipeline,” Marushack said.

Phillips, he said, sees “certain advantages to a southern route” and is willing to endorse it if that endorsement “would materially improve the prospects for passage of a bill granting the fast-track regulatory authority needed to move forward…”

But, he said, there are strings attached to that route endorsement, including federal legislation resulting in “a coordinated, streamlined regulatory process,” federal fiscal relief, Alaska fiscal certainty and no mandated requirements for either a project labor agreement or the use of solely U.S. steel.

Phillips, ExxonMobil and BP have provided draft legislation “that would provide an expedited process that is fair, simple and efficient for obtaining permits and other approvals” for the gasline project — and requiring a full-scale environmental impact statement.

Phillips is opposed to mandating project labor agreements or sole sources of steel, he said, because these decisions should be made through normal competitive processes. A mandate for U.S. steel would be impossible to meet because only one U.S. mill could provide this pipe and the sheer size of the project will require steel from many sources. And a mandated project labor agreement, he said, gives labor an unfair advantage in negotiations.

Phillips wants two federal fiscal incentives: accelerated depreciation (seven years instead of 15) and a credit against federal income tax if natural gas prices in the Lower 48 are at low levels.