Stripped-down gas bill passes Senate committee

Posted: Sunday, August 06, 2006

A Senate committee on Friday took a big step toward dooming a bill that would have legitimized Gov. Frank Murkowski's proposed natural gas pipeline contract.

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The Senate Special Committee on Natural Gas Development stripped the bill of language that would have granted Murkowski the authority he needs to execute his deal with BP, ConocoPhillips and Exxon Mobil Corp.

The new version of the bill would simply give the Murkowski administration more time to summarize public comments made on the draft contract and negotiate changes to the deal.

Murkowski Chief of Staff Jim Clark acknowledged that chances are dim that the Legislature will move on the contract before the Aug. 10 end of the special session.

"I'm figuring we're not going to get much more than this," Clark said of the new bill.

If the bill passes the full Legislature, the administration will have 120 days instead of 30 to make changes to the contract, then return to lawmakers for changes to the Stranded Gas Development Act and a vote on the contract.

Revenue Commissioner Bill Corbus told the commission he needs the extra time to sift through the 2,000 comments received by the July 24 end of the public comment period.

The original bill would have authorized Murkowski to freeze the three oil companies' oil taxes for up to 25 years while the $20 billion pipeline is under construction and during its first operating period. The bill had other provisions, but without that key section, Murkowski's contract proposal would not be legal.

The Senate committee rejected that bill Thursday night.

Clark said the provisions in the original bill would have given the administration direction to renegotiate contract changes. Without that direction, Clark said lawmakers will likely second-guess every provision when the administration returns with a revised deal.

"Their day of decision has been put off and that's to the detriment of the contract," Clark said.

Also failing to make the bill was an amendment proposed by Senate President Ben Stevens, R-Anchorage, that would have bypassed the Legislature and let voters decide in the Nov. 7 election whether to approve the governor's proposed contract.

Stevens said his amendment would have allowed the Legislature to act on the draft contract at any point in the 95 days before the election.

If the Legislature can't move on the gas pipeline proposal in that time, let the public make the decision, he said.

"I've had it to the point where I can't listen to it anymore," Stevens said.

The contract setting tax and royalty terms with the oil companies is just one step in making the Alaska-to-Canada pipeline a reality. But many legislators have said Murkowski's deal gives too much to the oil companies.

Stevens' ballot vote proposal failed on a 3-7 vote of the committee.

Sen. Kim Elton, D-Juneau, said he voted against the proposal, and against the Stranded Gas Development Act amendments the night before, because changes based on public comments, as well as the pipeline ownership agreement, have not yet been incorporated.

Elton said he was reluctant to pass along a very complex decision to Alaskan voters, particularly after the hours of hearings and hundreds of documents he has needed to go through to understand the issues.

"I see it as a fundamental abdication of my role," Elton said.

Sen. Lyman Hoffman, D-Bethel, took the opposite view when he voted for Stevens' proposal. Hoffman said the Legislature had failed in its duty, and "I'll have to pass that responsibility back to the people who sent me here."

Committee Chairman Ralph Seekins R-Fairbanks, said he wasn't ready to say the Legislature had failed. He voted against Stevens' amendment.

"I don't know if this is the right time to say we can't get it done," Seekins said.

Murkowski is likely to call another special session to again take up the contract and Stranded Gas Development Act changes.

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