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Legislators look again at incentives for gas line

Posted: Tuesday, February 11, 2003

Alaska Lawmakers have started work on legislation to provide the "fiscal certainty" major oil and gas companies operating in Alaska say they need to pursue a natural gas pipeline from the North Slope.

Rep. Hugh Fate, Republican of North Pole, is pushing a bill that would revive, with changes, the so-called Stranded Gas Act the Legislature passed in 1998.

That law allowed the administration to negotiate a special tax contract that would make a liquefied natural gas project more attractive to developers. The contract would come back to the Legislature for approval.

The law was intended to spur quick action on a project, with the provisions being available only until June 30, 2001.

Representatives of Conoco Phillips and BP said at a hearing last week they support renewal of the law, although they and other lawmakers questioned some of the new bill's provisions.

"Passage of House Bill 16 is the first step that the Alaska government can take toward addressing necessary legislation to move the gas pipeline forward," said Joe Marushack of Conoco Phillips. "It looks to me like generally it works and provides what we need it for."

Fate's bill is much broader than the previous law. Rather than being restricted to liquefied natural gas, it would apply to any project to export gas as long as the project would produce at least 500 billion cubic feet within 20 years.

There would be no deadline for companies to take advantage of the provisions.

Rep. Beth Kerttula, D-Juneau, questioned whether the new proposal was too broad, and whether requiring no deadline for application would make the measure less effective in spurring prompt action.

"It looks like it's all gas, anywhere, anytime," Kerttula said.

"It is broad," Fate said. "It was intended to stimulate the industry in getting on with a gas pipeline in the state of Alaska."

The bill may come up for a second hearing this week in the House Oil and Gas Committee.



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