Legislators aim to head off gas monopoly

Three oil giants control 90 percent of North Slope gas reserves

Posted: Friday, February 04, 2005

House Minority Leader Ethan Berkowitz on Thursday warned of potential antitrust problems for Alaska's proposed natural gas line - if it is owned and operated by North Slope oil producers.

Three major oil companies hold more than 90 percent of the proven North Slope gas reserves. The companies - BP, ConocoPhillips and ExxonMobil - also own the Trans Alaska Pipeline System (TAPS) and are negotiating with Alaska over a proposed $20 billion gas pipeline from the North Slope to the Midwestern United States.

Berkowtiz, an Anchorage Democrat, asked the Federal Energy Regulatory Commission on Jan. 4 to resolve whether the companies have a possible antitrust problem.

Commission Chairman Pat Wood wrote back to Berkowitz Jan. 28 telling him that antitrust matters won't be evaluated until a gas line application is filed with the commission.

Rep. Gene Therriault, R-North Pole, said he is also interested in resolving the antitrust question.

The Joint Legislative Budget and Audit Committee, chaired by Therriault, has directed Don Shepler, an attorney in Washington, D.C. to look into the issue, Therriault said Thursday.

"At some point we'll take it up with (the Murkowski administration) to find out what they are doing about this," Therriault said.

BP spokesman David MacDowell said that ownership and operation of the gas line is still being negotiated.

"No decisions about project ownership or commercial structure have been made at this time," he said.

U.S. antitrust laws are written to prevent companies from restraining trade and controlling the marketplace so that other companies can't compete.

Rep. Beth Kerttula, D-Juneau, said that the gas line should be open for access by more than just the major producers to ensure that the big three companies don't exert a monopoly hold on North Slope gas.

"On its face, the (companies') levels of market share raise questions about antitrust that must be resolved before the State Legislature can responsibly determine how to respond to any application" for a gas line, Berkowitz wrote to Wood.

The Legislature may vote in this session or a special session this summer on one or more proposed gas line agreements with energy companies, as submitted by the Murkowski administration.

"We need to take care of the bottlenecks before they materialize," Berkowitz said at a press conference Thursday.

• Elizabeth Bluemink can be reached at elizabeth.bluemink@juneauempire.com.

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