Murkowski returns to the pipeline scene

Posted: Wednesday, January 30, 2008

Former Gov. Frank Murkowski wants to be a player again in the high-stakes game of building a pipeline to tap North Slope's natural gas.

Murkowski has re-emerged after a year out of office and the public eye.

When he was the state's chief executive, he couldn't garner enough legislative support for a deal with Exxon Mobil Corp., ConocoPhillips and BP that he hoped would eventually lead to a pipeline.

Now, Murkowski says he's planning to meet with oil companies in an unspecified role as the Legislature moves forward on Gov. Sarah Palin's gas line plan - a rewrite of Murkowski's failed attempt.

First up was a Monday meeting with officials at ConocoPhillips, which is touting an alternative plan to the one backed by Palin, who trounced Murkowski in the GOP gubernatorial primary.

Palin already has rejected the ConocoPhillips plan, but the Houston-based company is waging a public relations campaign with full-page newspaper ads and television spots, all while courting lawmakers for reconsideration.

Murkowski's reappearance begs the question, will his efforts be welcome in the state capital?

"I certainly would welcome him, sure," Palin said Tuesday at a news conference. "With all due respect to any former governor, we'll certainly listen to what he has to say."

Efforts to reach Murkowski on Tuesday were not immediately successful, but Murkowski told Anchorage television station KTUU on Monday he wants to do everything he can to help.

Murkowski said he also plans to meet with Exxon Mobil, BP and TransCanada, whose application was the only one deemed compliant under the Alaska Gasline Inducement Act, or AGIA.

"The bottom line is to get this moving and how can we collectively work together to have the producers, the owners of the gas and TransCanada come together with the state of Alaska to get this project under way," he told KTUU.

In the final months of his own term as governor, Murkowski's pipeline deal with the major producers fell apart.

In closed-door meetings, Murkowski basically settled in principle with BP, Exxon Mobil and ConocoPhillips on fiscal terms - taxes and royalties - for producing the North Slope gas.

The deal, struck under the Stranded Gas Development Act, would have frozen oil taxes for 30 years and gas taxes for up to 45 years for the three major oil companies.

However, it did not guarantee a pipeline would get built; rather, the hope was it would enable producers to move forward with a pipeline.

Critics said his proposed tax breaks to producers were too generous and the Legislature never voted on it.

Once she took office in December 2006, Palin chose a new route, saying she would not resume negotiations. Instead, she rewrote the law, saying the state would broker a deal from a position of strength.

Six months later, the Legislature passed AGIA, which calls for bidders to guarantee progress toward pipeline construction and is friendly toward new energy exploration. It also offered state incentives, like $500 million to help with initial costs such as permitting.

While Palin says she'll listen to what Murkowski has to say, it doesn't appear her mind will be changed by going back to how he approached a pipeline.

"This process has been the antithesis of the Murkowski process," Palin said Tuesday. "We are on two different roads. We based our process on transparency and competitiveness.

"We are confident our process will get us a gas line as opposed to the four years of speaking behind closed doors, negotiating solely with an entity made up of the three producers."



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