Lawmakers: Too late to call special session for pipeline

Session would set out terms for taxes, royalties, state's share of $20 billion project

Posted: Monday, October 17, 2005

ANCHORAGE - Lawmakers on both sides of the aisle say Gov. Frank Murkowski probably has run out of time to call the Legislature into special session this year to consider a natural gas pipeline contract.

"We've probably passed the point to get to it this calendar year," said Rep. Ralph Samuels, R-Anchorage, a legislative leader on natural gas line issues.

Republican Gov. Frank Murkowski had said for several months that he planned to call the Legislature into special session this fall to consider a natural gas pipeline contract. The contract would set out terms for taxes, royalties and the state's share of the estimated $20 billion project.

However, negotiations continue between the administration and major petroleum companies.

The delay could put consideration of a high-stakes, complex gas line contract alongside issues subject to dealmaking and vote-trading of the regular legislative session.

"There would be way too much temptation for basically hostage-taking over votes," said Rep. Mike Hawker, R-Anchorage. "It is such an important issue that it needs to be evaluated on its own merits."

Hawker said the practical deadline passed last week for the governor to strike a deal in time to have a special session this year.

Hawker suggested the scheduled Jan. 9 start date for the regular 2006 legislative session could be postponed. Then, if the contract was ready for ratification, the Legislature could hold a special gas line session in early January.

Murkowski said on Oct. 6 that the state had delivered its contract proposal to the oil companies and that he expected an answer "within the next few days." Last week, the governor said the companies were still considering it.

"I still expect to hear from them soon," Murkowski said.

If a deal is struck, the commissioner of revenue must prepare a report on why the contract is in the best interests of the state. The law also requires at least 30 days for the public to comment, and Murkowski wants a longer public period than that.

Changes to the contract as a result of public testimony would require the state to renegotiate with the oil companies.

Only then could the Legislature have a special session on whether to approve the deal.

The contract has been two years in the making through negotiations between the governor's office and the major North Slope oil companies - Exxon Mobil, BP and Conoco Phillips. Murkowski also is proposing the state invest about $4 billion to be a 20 percent owner of a pipeline from the North Slope to the Lower 48.

Rep. Eric Croft, D-Anchorage, said the governor has been saying for well over a year that a gas contract was imminent.

"Frank's plan is to ask pretty please over and over," Croft said. "I'd suggest that isn't working and is never going to work."

Croft is running for governor next year. He is pushing a ballot initiative to tax the companies on the gas reserves if the pipeline is not built.

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