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Senator lists natural gas line demands Lisa Murkowski says Alaska should require developer to pay into school accounts; Houle advises caution Larry Persily Petroleum News Government Affairs Editor
U.S. Sen. Lisa Murkowski has sent the governor and Alaska legislators a three-page letter listing what she thinks the state should require of any company wanting to build a North Slope natural gas pipeline.
The Alaska Republican, who is running for election this year, said she wants state negotiators to secure for individual Alaskans the right to invest in the pipeline project. She also wants whichever company builds the line to help pay the bill for Alaska’s elementary-through-college public schools.
“This can best be done by requiring of participating companies a commitment and willingness on their part to invest their own funds … into protected accounts designed for long-term education funding in Alaska,” she said in her Feb. 6 letter to the governor and lawmakers.
The companies will need a well-trained labor force and should be willing to help pay the costs, Murkowski said.
“The state is in the driver’s seat when it comes to negotiating this deal,” she said.
The state constitution prohibits dedicated funds, and Murkowski did not explain in her letter how Alaska could set up the “protected accounts” she proposed for education. Letter comes as state starts gas line talks The senator’s letter came the same week the state started talks with its two applicants under the Stranded Gas Act, which allows a gas line developer to negotiate a long-term fiscal contract for scheduled payments to the state in lieu of possibly fluctuating state and municipal taxes on the project.
Pipeline operator MidAmerican Energy Holdings Co., of Des Moines, Iowa, and a consortium of the three major North Slope producers each submitted an application to the state to set up a fiscal contract should either decide to proceed with the multibillion-dollar investment.
“I call upon the state to ensure any deal agreed to under the Stranded Gas Act negotiations includes strong provisions to allow individual Alaskans the right and opportunity to invest their own money in the pipeline,” the senator said.
The contributions to Alaska’s education funding could come under the state’s fiscal contract for the project as opposed to instituting any new taxes, said Murkowski spokesman Chuck Kleeschulte.
In addition to school funding and individual investment opportunities, Murkowski said she wants any gas line project contract to include provisions for project-labor agreements to protect Alaska union members, and “protections for the many Alaska workers who are not members of organized labor groups.” ‘Wish list’ has its risks Though not disagreeing with the intent of maximum benefits for Alaskans, “the state needs to be extremely cautious in making too many demands,” said Larry Houle of the Alaska Support Industry Alliance. An expensive “wish list” can burden a project’s economics, he said.
The senator’s list “sounds like a cornucopia of good things” that could drive up the project’s cost, he said. Alaska needs to realize it’s in a competitive world for oil and gas investment dollars, said Houle, general manager of the industry support organization.
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