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Alaska Senate approves $1 million to go toward state gas pipeline efforts; measure moves to House next
Larry Persily Petroleum News Government Affairs editor
Alaska’s state senators have approved $1 million in additional funding to analyze and assist public and private efforts to develop a North Slope natural gas pipeline, with the measure moving next to the House for its consideration.
The administration had been seeking $3 million to share between the Alaska Natural Gas Development Authority, which wants to build a state-owned pipeline, and the Department of Revenue’s Stranded Gas Act negotiations for a privately owned project.
The authority had wanted $2.15 million for itself, but last month agreed to go along with a combined administration request to cover the state’s overall gas line work.
The Senate passed the measure 18-0, with no discussion whatsoever. Senate Bill 241 moves next to the House.
If approved by the House, some of the $1 million will go toward a study of potential social and economic effects from a multibillion-dollar gas line on communities along the route, said Steve Porter, deputy commissioner at the Alaska Department of Revenue. And some of the cash would go to the state gas authority for a study of the state’s financing options if it wants to build the project itself.
Other than those two consultant contracts, Porter said no decision has been made for spending the balance of the $1 million. The money would be available immediately after passage by the House and acceptance by the governor. Measure intended to meet needs this spring The Senate Finance Committee had determined $1 million would be enough money to meet any immediate needs this spring, while the Department of Revenue could submit a separate request for whatever it might need for the fiscal year that starts July 1.
“The exact amount that we will request has not been determined,” Porter said after the Senate vote. House and Senate members in the next several weeks will be finishing their work on the state budget for the next fiscal year.
Much of the department’s original $3 million request was directed to cover the state’s expenses as it negotiates Stranded Gas Act fiscal contracts with the three major North Slope producers and MidAmerican Energy Holdings Co. of Des Moines, Iowa.
The pipeline company and the producers have each applied for a state contract to set up a schedule of payments in lieu of state and municipal taxes on a pipeline, should either applicant decide to proceed with the project.
And while the producers have agreed to reimburse the state for up to $1.5 million in negotiating and consultant costs, MidAmerican has declined to sign a similar reimbursement agreement, Porter said March 17.
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