House action sets up more incentives for Alaska gas pipeline

Authorization measure expedites permitting OK, loan guarantees worth up to $18 billion

Posted: Sunday, October 10, 2004

WASHINGTON - Congressional action authorizing language and fiscal incentives for an Alaska natural gas pipeline is significant progress for an idea decades in the making, Alaska's congressional delegation said Saturday.

The authorizing measures - including expedited permitting approval and loan guarantees worth up to $18 billion - were tucked into a 2005 military construction funding bill approved by the U.S. House Saturday as both chambers hustled to clear bills before Election Day Nov. 2.

The legislation now goes to the U.S. Senate as early as today.

"This project now will be started, and I'm excited about that because we've tried for 21 years to get this done - 21 years to try to get a gas line," said U.S. Rep. Don Young, R-Alaska.

Two fiscal incentives in the form of accelerated depreciation and a tax credit to help build a North Slope gas conditioning plant cleared the House Thursday but were stalled in the Senate.

Sen. Ted Stevens, R-Alaska, predicted the legislation carrying the gas line measures will survive.

"When the Senate passes a bill - and it will before we go home - this will be the complete authorization for the natural gas pipeline," he said.

Alaska lawmakers said the federal authorizing language and fiscal incentives will spur along the process of getting some form of the gas line built.

Sen. Lisa Murkowski, R-Alaska, said Saturday's action was big news for the state. It could also be a campaign boost for her in the upcoming election.

Murkowski and Democratic challenger Tony Knowles have sparred over who would be best able to move the gas line project along.

"This is the greatest piece of news that we have had as a state for the jobs, for the energy opportunity, the energy accessibility that we have had in years, in decades," Murkowski said. "This is great news for Alaskans, and the fact that I happened to be able to affect this good news certainly can't hurt me in my effort to ask Alaskans to allow me to continue to represent them."

A spokesman for Knowles, a former Alaska governor, called the bill's passage a tribute to Stevens and "his relationships on both sides of the aisle that he was able to get this done."

"It's also proof certain that when you work across party lines, Alaska benefits," spokesman Matt McKenna said. But he said it's not enough because Congress has not approved federal tax credits sought by ConocoPhillips to protect Alaska producers against low prices for their gas.

"There is still work to be done," McKenna said. "Industry has said they're not going to move forward without the wellhead tax credit and Tony Knowles will work closely with Sen. Stevens and Rep. Young to make sure that it passes next year."

ConocoPhillips could not be reached Saturday, but a spokesman for BP's Alaska gas unit said the legislation was a positive development for the pipeline project.

"We have said all along that the production tax credit would help to reduce risks associated with this massive project and as such would be helpful. However, that's something for Congress to decide," said Dave MacDowell. "The essential elements are the regulatory enabling legislation and fiscal incentives, such as loan guarantees and accelerated depreciation."



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