Alaska gas reserves tax approved for ballot _______
news.yahoo.com
By Yereth Rosen
Tue Mar 7, 6:31 PM ET
An initiative to force Alaska's major oil producers to pay a special $1 billion-a-year reserves tax for leaving known North Slope natural gas in the ground will be on November's general election ballot, state officials said on Tuesday.
Alaska's Division of Elections determined initiative sponsors gathered more than enough petition signatures from registered voters to qualify the measure for the ballot, said a spokeswoman for Lt. Gov. Loren Leman, who is in charge of elections management.
The measure was spearheaded by three Democratic state legislators who have tried unsuccessfully to get similar legislation passed.
The initiative would levy an annual tax of 3 cents per thousand cubic feet of conventional natural gas that is not being shipped to market. Once at least 2 billion cubic feet a day of the gas is delivered by pipeline to markets, the tax would be lifted under the initiative.
The reserves tax is an important strategy for nudging the major North Slope oil producers -- ConocoPhillips, BP and Exxon Mobil -- into action for a project that has been in the proposal stages for decades, said state Rep. Eric Croft, one of the initiative sponsors.
It is an alternative to the fiscal incentives that Republican Gov. Frank Murkowski negotiated with the oil companies, said Croft, who is also running for governor.
"Our approach is to demand it instead of begging for it," Croft said. "It's the difference between a carrot and a stick. I think the mule has sat on our porch for 20 years eating our carrots, and I want to take out a big two-by-four."
The North Slope holds approximately 35 trillion cubic feet of known natural gas reserves, primarily in the Prudhoe Bay and Point Thomson fields. The resource is state-owned; energy companies hold leases on the oil fields that allow them to produce.
Energy companies have been shipping oil out of the North Slope since 1977, but the associated natural gas that lies within the oil fields has remained stranded for lack of a system to transport it to markets.
Each day, the companies pump up about 8 billion cubic feet of natural gas in conjunction with oil production; the natural gas is re-injected into the reservoir to be conserved for future use and to help improve oil recovery.
The major North Slope producers estimate it would cost more than $20 billion to build a natural gas pipeline to deliver product to Lower 48 markets. The companies say the reserves tax would be counterproductive.
"This initiative does nothing to move the gas project forward and it sends the wrong message to any company interested in developing an Alaska natural gas pipeline or companies that want to explore in Alaska," said a statement issued by ConocoPhillips Alaska Inc.
"This project cannot be taxed into existence."
Also opposing the initiative is Murkowski, who last month announced that he had struck a tentative deal with the three major producers.
"Gov. Murkowski's focus all along has been on getting a negotiated agreement. He believes that is the best way to get a pipeline built," said Murkowski spokeswoman Beck Hultberg. "A reserves tax won't get a pipeline built, but it will lead to delay and litigation."
Murkowski's negotiated agreement, which has yet to be made public, must win legislative approval. |
