Murkowski may back off plans for gas pipeline session

Governor doesn't want to undermine Palin's own plans

Posted: Wednesday, August 30, 2006

JUNEAU - Gov. Frank Murkowski may be backing off his pledge to call a new legislative session in September to reconsider his contract proposal for a natural gas pipeline to Canada.

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Murkowski Chief of Staff Jim Clark said approving the contract has to be something the Legislature and the oil companies that would own the pipeline want to do.

"This has got to be legislative-driven at this point," Clark told the Alaska Public Radio Network. "By that, I mean the Legislature has got to come to us and say here are the things that we would require in order for a contract to go forward."

Murkowski made his draft contract with Exxon Mobil Corp., BP and ConocoPhillips public in May. Since then, the Legislature has twice failed to pass bills that would make the terms negotiated in the contract legal, and the contract has gone back for revisions after a public comment period.

Lawmakers had concerns over the favorable tax and royalty terms for the oil companies in Murkowski's proposal, and the governor's loss in last week's Republican primary may have made it more difficult to gain legislative support for the deal.

After conceding defeat Aug. 22, Murkowski said he would call legislators back to the Capitol to finish work on the gas contract.

Republican nominee Sarah Palin has said Murkowski's ouster is a signal that voters want "a more sensible project to be considered." She, like Democratic nominee Tony Knowles, have called for opening the negotiations to other pipeline proposals. Palin also has publicly supported a North Slope-to-Valdez liquefied natural gas proposal.

Clark said the governor does not want to undermine the Republican nominee by pushing his own plan. He said the reason the administration continues to press for the contract is because Alaska risks not getting a gas line, estimated to cost $25 billion to build.

"Time is not our friend," he said.

House Speaker John Harris, R-Valdez, said he is polling his majority caucus members on what, if any, changes can be made to Murkowski's contract.

"I don't know whether or not the producers, No. 1, would agree to it, and No. 2, I don't know whether the administration would agree to it," Harris said.

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