Sen. Murkowski: No guarantees on federal energy bill

Posted: Friday, January 16, 2004

The time is now for a pipeline pumping Alaska natural gas to the Lower 48, but there are no guarantees the federal energy bill - which includes provisions essential to the project - will pass, Sen. Lisa Murkowski said Thursday.

The bill did not go to a Senate vote last year because legislators couldn't muster the 60 votes necessary to end debate. If the bill does go to vote, it needs 51 to pass, and Murkowski said she thinks the votes are there.

"There are some who are just opposed to one provision or another," she said during an interview with the Juneau Empire.

The energy bill carries authorization language for building the pipeline and a package of financial incentives the major gas companies say are imperative to development of a natural gas line. The incentives include a loan guarantee that would kick in if the project is not completed, accelerated depreciation for the pipeline for tax purposes, and a tax credit for the cost of a natural gas conditioning plant on the North Slope to prepare gas for shipment.

Murkowski wouldn't make any predictions about the energy bill's chances of passing. She said if it doesn't pass early this year, it likely will be stymied by politics related to the upcoming presidential election. She also noted that if the bill does fail, the financial incentives and other provisions to enable design and permitting of the pipeline could be introduced in a free-standing bill.

Murkowski told members of the state chamber of commerce and the Juneau Chamber Thursday that if the pipeline isn't built soon, Alaska will miss its chance to get into the domestic gas market.

"We've got a narrow window of opportunity for the gas line," Murkowski said.

"Demand is only going up, and the domestic sources of supply in the country are just not able to keep up."

The senator said other countries are signing long-term contracts with gas producers to tap the U.S. market. She said Indonesia recently signed a 15-year contract with BP, and Qatar has made a 25-year agreement with Exxon.

Gov. Frank Murkowski said in his state of the state address this week that building the gas pipeline was the administration's top priority, but cautioned its benefits might not be reaped for a decade. Gas companies are working on applications to build the pipeline. None have been submitted yet.

Democrats in the state Legislature are stressing the pipeline's importance. Rep. Eric Croft of Anchorage said political obstacles have held up its construction.

"We have no shortage of ways to get it done. What we have is a shortage of political will to get it done," Croft said, suggesting that the Murkowski administration was reluctant to "deal very aggressively" with companies that donated to the governor's campaign.

• Masha Herbst can be reached at masha.herbst@juneauempire.com.



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