Empire editorial: Palin, lawmakers: Don't let Conoco derail pipeline plan

Posted: Sunday, January 27, 2008

ConocoPhillips is like a kid on the playground who doesn't like the rules of the kickball game and is trying to woo kids away to create another competition it knows it can win.

When it comes to who's going to build a natural gas pipeline in Alaska, the state's largest oil producer is engaged in a sort of bullying, though far more subtle and complex than anything you'd see on a playground. A few legislators seem to be suckers for Conoco's tactics, but let's hope Gov. Sarah Palin and the majority of lawmakers have the moxie and intelligence to resist the oil company's ploys.

The governor already has told Conoco it can't play in the pipeline building game because it didn't meet the criteria the state set in its bidding process. Instead, Palin has chosen to pursue a proposal by TransCanada Corp., one of five companies that presented plans according to state guidelines.

Ignoring that, Conoco pitched its proposal for the pipeline to the Senate Resources Committee this last week and wants to meet with the administration to discuss its gas line proposal. The company also has launched a public speaking tour and an advertising campaign to push its own plan.

Conoco says the sticking points are taxes and what it calls a long-term commitment to "fiscal stability." It wants to know how gas flowing through the pipeline will be taxed.

Under the Alaska Gasline Inducement Act, designed to bring about the building of a natural gas line, the first producers to ship gas in the pipeline will get a 10-year tax break. Oil producers don't like that and much preferred the 45-year tax deal former Gov. Frank Murkowski proposed.

But the Legislature rejected the idea of giving up the state's taxation powers for such a long time. And Palin has said taxes and pipeline construction are two issues that are separate and should stay that way.

Despite the fact oil companies rake in billions of dollars in revenue from Alaska oil fields, Conoco wants to pressure the state into a deal that gives even more to the oil and gas industry and less to Alaskans, who actually own the oil. And oil companies know full well that they're getting stability in Alaska that they certainly don't have from other oil-producing entities, such as Angola or Nigeria.

After intense debate and negotiation, the Alaska Legislature approved the gas line act 59-1 last year. The oil producers didn't like it because it lacked the giveaways to the industry that Murkowski was more than happy to include in his gas line plan.

We finally have leaders who are more willing to stick up for Alaskans and the resources they own. The governor and other legislators need to stand their ground and not let ConocoPhillips change the rules of the game.

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