Congress working on gasline bills, fate of incentives uncertain

Petroleum News Alaska Staff

Congressional committees are once again working on legislation to promote building a natural gas pipeline from Alaska’s North Slope to the Lower 48.

House and Senate versions of a comprehensive national energy bill won’t contain financial incentives because of a decision that incentives approved by the Senate last year would amend federal tax law, putting them under jurisdiction of the finance committee.

This year, gasline incentives are being developed in consultation with the Bush administration and the finance committee, Sen. Lisa Murkowski, R-AK, said March 26.

Last year the Bush administration opposed tax credits for the line. The administration reportedly has new advisors on the subject this year, but on March 4, Jim Slutz, deputy assistant secretary of fossil fuel management for the U.S. Department of Energy, told a Calgary conference that the Bush administration has no intention of supporting floor prices or tax credits to develop Alaska gas because of its belief that the market should be the driving force in developing gas resources.

North Slope gas owners ConocoPhillips and BP have said the project isn’t feasible unless the federal government steps in to reduce the risk.

Senate Energy and Natural Resources Committee Chairman Pete Domenici has co-sponsored a bill in the finance committee proposing the same tax credit found in last year’s Senate bill.

The Senate Energy and Natural Resources Committee will start its markup of energy legislation April 1 and 2. A subcommittee of the House Energy and Commerce Committee approved an energy bill similar to legislation passed by the Senate last year. The Senate committee has added Alaska gasline proposals to a draft version of its energy bill.

Murkowski said the provisions would ban a northern route, speed permitting and construction, address in-state access and use, provide worker training and promote in-state hiring.