Lawmakers listen to gas pipeline criticism

Ousted officials warn of concessions to Big Oil; administration says warnings are out of context

Posted: Friday, January 13, 2006

A former Murkowski administration commissioner urged a critical eye when legislators consider the governor's proposed contract for a North Slope natural gas pipeline.

Republican and Democratic legislators eagerly lent their ears Thursday to Tom Irwin, Murkowski's ousted natural resources commissioner, who warned them that Alaska could end up with too many concessions to oil companies in the proposed contract.

With the administration's strategy, Alaskans also could end up with "billions of dollars of unnecessary and unfortunate risk," said Mark Myers, the state's former gas director. Myers left the Department of Natural Resources with his boss, Irwin, and five other senior officials in October after clashing with the administration over the multibillion-dollar contract.

Irwin's replacement, Mike Menge, said Irwin's warnings lack the proper context, which won't be available to legislators until the confidential negotiations are over.

"This is a world market (for natural gas). ... We have to compete with that market," said Menge, the governor's former energy adviser before taking over Irwin's position.

Irwin and Myers urged legislators who attended a packed Thursday Republican legislative meeting to give careful review to all the data in the contract. Irwin said the Legislature must step in as the "champion" to protect Alaskans from too much investment risk and too many concessions to the oil companies.

The terms of the gas line contract - now under negotiation in Juneau with BP, Exxon Mobil and ConocoPhillips - could be announced in a matter of weeks, state officials said this week.

The duo's comments "just accentuated things that I was already worried about," said Rep. Bill Stoltze, R-Chugiak, after the caucus.

Despite the buzz created throughout the Capitol on Thursday after Irwin's and Myer's warnings, some Republican leaders said they aren't too worried about getting an adequate review of the contract terms.

House Speaker John Harris, R-Valdez, said he is confident that all the serious issues with the pipeline will get careful consideration.

Since Irwin's ouster, the gas line negotiations have progressed for months.

"Maybe all of these things are taken care of now," Harris said.

But House Minority Leader Ethan Berkowitz, D-Anchorage, said Irwin's and Myers' comments are "building a mountain of skepticism that gets harder and harder for the governor to climb."

Two legislators who closely track contract talks because they co-chair the Legislative Budget and Audit Committee - Sen. Gene Therriault, R-Fairbanks, and Rep. Ralph Samuels, R-Anchorage - were notably absent from the Thursday caucus.

Samuels said in an interview after the caucus that legislators simply don't have the details yet to evaluate the terms of the gas line contract. As far as risky investment, Samuels said, "Everybody's got a different take on how much risk the state should take ... . That issue has been discussed for months."

"Most legislators are taking great pains to keep open minds" while awaiting the gas line contract, Berkowitz added.

A number of legislators thanked Irwin and Myers for their work on behalf of the state, and for their integrity.

"Hopefully, we'll all be better off for what you did," Rep. Mike Kelly, R-Fairbanks, told Irwin during the caucus, referring to Irwin's fall 2005 memo to Alaska Attorney General David Marquez raising legal questions about the gas line negotiations.

Murkowski released Irwin's memo to the media without Irwin's prior knowledge. It is a document Irwin thought would "never see the light of day," he told legislators during Thursday's caucus.

Murkowski said at the time that he removed Irwin because he needed a commissioner who supported his administration's goals for the gas line.

Also on Thursday, Democratic legislators criticized Murkowski's tactic to link new oil tax reform to the gas line negotiations.

Rep. Les Gara and Sen. Hollis French, both Anchorage Democrats, told reporters that Murkowski's strategy for tax reform could delay fair compensation to Alaskans for windfall oil profits for years.

The Democrats have their own oil tax reform proposal, which will get a hearing today in the House Ways and Means Committee.

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