State may help pay to develop Point Thomson
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JUNEAU - Alaska could partially subsidize development of the Point Thomson natural gas field through oil-tax credits generated under a bill the Legislature is considering, the governor's petroleum consultant told lawmakers Saturday.
That's a turnaround from the state's position last year, when the Department of Natural Resources' Division of Oil and Gas found Point Thomson operator Exxon Mobil Corp. in default for not developing the field itself and threatened to revoke its leases.
Under Gov. Frank Murkowski's net-profits tax bill, Exxon Mobil would be able to use tax credits on both oil investments and gas investments to develop the North Slope field and its 9 trillion cubic feet of gas, said consultant Pedro van Meurs.
The field has sat undeveloped for nearly 30 years and now figures prominently in negotiations between Murkowski and three oil companies, including Exxon Mobil, to build a $25 billion natural-gas pipeline to Canada and Midwestern markets.
Before a fiscal contract for recovering North Slope gas and building a pipeline is released to the public, Murkowski says the Legislature must pass the net-profits tax bill. The tax rates and credits will be rolled into the contract, which lawmakers will then have to ratify.
Under the tax bill, Exxon Mobil would be able to claim credits for both oil and gas for Point Thomson's development. Van Meurs said it would be too complicated to separate industry's oil investments from its gas investments, plus the field will generate condensates essential for maintaining oil production.
Assuming it will cost $2 billion to build the facilities to tap into those reserves, and with a credit for 20 percent of capital costs, that adds up to a $400 million state subsidy to develop Point Thomson, van Meurs said.
Sen. Kim Elton, D-Juneau, said Exxon's "foot dragging" over Point Thomson may pay off. The oil company will end up benefiting if the net-profits tax is approved in its present form, Elton said.
"There are wells that haven't been drilled that should have been drilled that I think would get a credit," Elton said.
Soldier remembered at memorial service
FAIRBANKS- Dan Fowler summed up Army Spc. Joseph Love-Fowler's dynamic life.
"If there were two words to describe my son, they are accidental hero," Fowler said.
Love-Fowler, 22, of North Pole, was remembered in a celebration of life Saturday night.
The soldier died April 9 while serving in Iraq with the 94th Engineer Combat Battalion, 8th Sustainment Command from Schofield Barracks, Hawaii.
A roadside bomb detonated near his Humvee during a convoy operation in Balad, seriously injuring him. He died a short time later.
A funeral and burial were held last week in Washington for Love-Fowler.
The soldier graduated from Fairbanks Youth Alternative School in 2003 and joined the Army last year.