• Scattered clouds
  • 57°
    Scattered clouds
http://sealaska.com
  • Comment

Parnell eyeing ways to further advance gas line

Posted: October 12, 2012 - 12:03am

JUNEAU — Alaska Gov. Sean Parnell said Thursday that an all-encompassing fiscal package for a major natural gas pipeline project won’t happen next year.

The governor said earlier this year that the 2013 Legislature could take up gas tax legislation if TransCanada Corp. and the North Slope’s major players — Exxon Mobil Corp., BP and ConocoPhillips — met a number of milestones in 2012. All of those benchmarks have been met, including cost estimates and a rough timeline for a potential project.

But in an interview with The Associated Press on Thursday, Parnell said there wouldn’t be an overall fiscal package unless the companies were ready to make a final investment decision on the project, which is estimated to cost between $45 billion and more than $65 billion.

The companies have said that such a decision is at least a few years away and would require such things as a competitive oil tax regime from the state and predictable and “durable” fiscal terms for the liquefied natural gas project.

Oil and gas are taxed together under Alaska’s current system. Parnell said it’s possible that legislators next year could take up a first phase of gas tax legislation, which could involve separating oil and gas production for tax purposes but not setting a new gas tax rate.

The governor said his focus during the upcoming session will be on increasing oil production, which he considers a nearer-term issue and critical for the state. Parnell has so far been unsuccessful in getting an oil-tax cut through the Legislature.

“If we have healthy oil production and a healthy oil industry, we can get a gas line,” he said.

The two issues are linked, because oil and gas come from the same well, he said.

Parnell wasn’t sure whether he would set new benchmarks for progress on a gas line. He has said his first series of benchmarks came from frustration with the lack of progress on a line.

The goal is to ensure that the companies continue investing in the gas line project, he said, adding that the state would take “commensurate and proportionate” steps to do the same.

The early stages of the companies’ timeline calls for investments of tens of millions of dollars during the concept selection phase, which involves looking at project specifics and potential routes, and building to hundreds of millions in the next phase and eventually billions.

Parnell said the state has already “put at risk” up to $500 million in reimbursable costs under the Alaska Gasline Inducement Act, the law meant to advance a gas line project.

“When the producers have put that much at risk in what they’re doing, then we’ll talk about, what are the next steps,” he said.

The AGIA contract is only between the state and TransCanada — and doesn’t involve the three producers, a fact the governor readily acknowledged.

Parnell, who recently returned from a trip to Japan and South Korea to promote Alaska natural gas, said he will continue to push the companies, with the end goal being commercialization of North Slope gas. But he said it will take time for the companies to complete a project of this size.

The companies have said the project will be “of unprecedented scale and challenge.”

  • Comment

Comments (2)

Add comment
ADVISORY: Users are solely responsible for opinions they post here and for following agreed-upon rules of civility. Posts and comments do not reflect the views of this site. Posts and comments are automatically checked for inappropriate language, but readers might find some comments offensive or inaccurate. If you believe a comment violates our rules, click the "Flag as offensive" link below the comment.
Latitude58
14434
Points
Latitude58 10/12/12 - 07:11 am
5
0

Unprecedented

"The companies have said the project will be “of unprecedented scale and challenge.”

Really? These companies do big pipelines all over the world. I have a very hard time believing this one is "unprecedented". More likely they're trying to make this appear 'darn near impossible' in order to puff up their demand for concessions.

The only thing we can expect will be unprecedented are the tax giveaways Parnell shovels them.

bluesriff
22
Points
bluesriff 10/13/12 - 01:09 pm
1
0

No he is not

You will know someone is serious when they take the oil companies to court to discuss breach of contract on the leases in regards to gas production and bringing that gas to market. Until then, this is all just another part of the oil tax givaway circus.

Every state that produces gas has a clear and common sense understanding with their producers about their leases. Most state supreme courts have reaffirmed the fact that " if you are going to produce resources you are obligated to get them to market."

Parnell will never make big oil do what is the most basic concept in a business agreement. Is there gas there? Yes. Shouldn't marketing it be a part of the lease agreement?

Back to Top

Spotted

Please Note: You may have disabled JavaScript and/or CSS. Although this news content will be accessible, certain functionality is unavailable.

Skip to News

« back

next »

  • title http://spotted.juneauempire.com/galleries/376863/ http://spotted.juneauempire.com/galleries/359852/ http://spotted.juneauempire.com/galleries/376858/
  • title http://spotted.juneauempire.com/galleries/376853/ http://spotted.juneauempire.com/galleries/376843/ http://spotted.juneauempire.com/galleries/368637/
  • title http://spotted.juneauempire.com/galleries/376838/ http://spotted.juneauempire.com/galleries/376833/
Fire Academy Graduation

CONTACT US

  • Switchboard: 907-586-3740
  • Circulation and Delivery: 907-586-3740
  • Newsroom Fax: 907-586-3028
  • Business Fax: 907-586-9097
  • Accounts Receivable: 907-523-2270
  • View the Staff Directory
  • or Send feedback

ADVERTISING

SUBSCRIBER SERVICES

SOCIAL NETWORKING