Sen. Murkowski has pipeline deal reservations

Posted: Monday, July 24, 2006

FAIRBANKS - U.S. Sen. Lisa Murkowski was among federal officials encouraging the Alaska Legislature to approve a natural gas pipeline contract with North Slope producers.

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But Alaska's junior senator says she's not demanding the contract be approved as is.

"Given what we've got in front of us today, I would say that there are still some issues that have to be worked out," Murkowski told the Fairbanks Daily News-Miner.

She understands Alaska legislators' worries about locking in oil tax rates for 30 years, she said.

"I would share their concerns," she said.

However, she wants the Legislature to approve a contract this year.

"I believe very strongly that the basic proposal ... is something that we can make work," she said of the contract negotiated between the North Slope oil companies and her father, Gov. Frank Murkowski.

"Let's figure out a way to get to 'yes' on this project rather than just killing it," she said.

State Sen. Gene Therriault, R-North Pole, said the Legislature could approve the contract this year - if there's a willingness to make changes.

The Legislature does not have the power itself to change the contract, Therriault noted. It's a deal between the administration and the companies. The Legislature is being asked simply to vote yes or no, he said.

There has been discussion about whether a yes vote could be conditional upon changes worked out between the administration and oil companies, he said.

So far, Therriault said, the administration has not been willing to make those changes, despite warnings dating back a year to 18 months that some provisions are not likely to fly.

The oil companies are not likely to act independently, he said.

"I don't expect the producers to read the public comment and then go back to the administration and request them to change," he said. "It's got to come from the administration."

Legislators are concerned about locking in oil taxes for 30 years as well as gas taxes for 45 years, he said.

They also want stronger guarantees that the North Slope major producers cannot exclude other potential gas producers.

They also have misgivings about the state taking possession of its royalty gas to market the gas itself, he said.

At a hearing last week in Washington, Sen. Pete Domenici, R-N.M., the chairman of the Senate Energy and Natural Resources Committee, spent several minutes telling Drue Pearce, President Bush's nominee for federal gas line coordinator, about his worries over the slow pace in Alaska.

Vice President Dick Cheney, Energy Secretary Samuel Bodman, U.S. Sen. Ted Stevens, R-Alaska, and the Federal Energy Regulatory Commission all have said in recent weeks that an agreement should be reached soon.

Therriault said he's not viewing the comments as criticism.

"I take them more as encouragement to keep focused," he said.

Federal officials have a different set of priorities, he said.

"It's not their sworn duty as an office holder to look out for the best interests of the state of Alaska," he said. "When I raise my hand and take that oath, that's what I swear to do."

Sen. Murkowski, a former state legislator, acknowledged that her perspective is different these days.

"I'm talking to people who are talking about the world picture and are expressing concern," she said.

Also, while legislative efforts to strengthen the contract are commendable, something else is delaying the process, she said.

"I do think that there are some who, for political reasons, would much rather that this governor not achieve success with this gas line," she said.

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