|
Murkowski eyes state share of gas line, briefs lawmakers
Larry Persily Petroleum News government affairs editor
Alaska Gov. Frank Murkowski told a joint session of the Legislature that perhaps Alaskans should own a stake in any pipeline that moves North Slope gas to market.
The governor, however, did not provide an investment plan.
“Alaskans, in my opinion, should now consider the opportunity to invest in the gas pipeline,” he told the Feb. 4 assembly of House and Senate members.
Murkowski briefed lawmakers on the status, process and potential outcome of Stranded Gas Act negotiations with the major North Slope producers and MidAmerican Energy Holdings Co., both of which have submitted fiscal contract applications to the state. The Stranded Gas Act allows potential gas line project sponsors to negotiate a long-term fiscal contract with the state in lieu of risking frequent changes in state and municipal taxes.
Either of the applicants is capable of taking on the project, the governor said. “The receipt of these applications represents a first step in the right direction.” Governor lists state benefits That direction, he said, could lead to increased oil and gas exploration in Alaska, $600 million a year in state production tax and gas royalty payments starting sometime after 2010, construction jobs for Alaskans, job orders for Alaska contractors, a new gas supply to cover Cook Inlet’s dwindling flow for Anchorage and the Kenai Peninsula, and economic development opportunities for gas-less communities such as Fairbanks including petrochemical industries.
He also cautioned lawmakers, however, there is more work to do before construction begins. “Keep in mind the Stranded Gas Act does not compel the applicant to build the pipeline, it only assures fiscal terms should the decision to build be made.”
In addition to negotiating a fiscal contract with the state, both project developers need the federal incentives in the stalled energy bill and confidence in their construction cost estimates and market demand and price projections before committing to spending money and burying pipe.
But if either the producers or Lower 48 pipeline operator MidAmerican decides to build the multibillion-dollar Alaska gas line, the state and individual Alaskans might want to buy a share of the venture, Murkowski said. No specific plan for state ownership The governor does not have a financial plan ready for how the state or individuals could buy a share of the project, but he believes it might make sense for the state to buy in equal to the one-eighth royalty share it holds on North Slope gas production, said John Manly, Murkowski’s press secretary.
The governor also did not say if he wanted state ownership options discussed as part of the Stranded Gas Act negotiations, which will start soon and, hopefully, he said, produce a contract he can bring to the Legislature in time for adoption before its May 12 adjournment deadline.
In addition to negotiating fiscal terms for project owner payments to the state, the Stranded Gas Act negotiations could condition any development incentives on work requirements for the project, according to a fact sheet distributed by the governor’s office during the speech.
| 