With governor loss, doubt over gas plan ____________________________
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By RICHARD RICHTMYER
Anchorage Daily News
Published: August 22, 2006
Last Modified: August 23, 2006 at 12:34 AM
Gov. Frank Murkoswki’s defeat in Tuesday’s Republican primary casts a cloud of uncertainty over the fate of his proposed natural gas pipeline contract with Alaska’s big three oil companies.
The governor had put the gas proposal at the center of his campaign, in many ways equating his bid for re-election to a referendum on the pipeline contract, which so far has curried scant support in the Republican-led Legislature.
Murkowski has said it is urgent to get the pipeline deal inked before the end of this year because delaying it might prompt the oil companies to focus on other projects.
The proposed contract has a long way to go before it can be signed. Murkowski has said he will seek significant changes after hearing concerns from the Legislature and the public on key parts of the deal. And all three of Alaska’s big oil companies - BP, Conoco Phillips and Exxon Mobil - need to agree to those changes.
What happens next will depend on how Murkowski, who remains governor until Dec. 4, handles his lame-duck status.
“He will continue to push it,” said Paul Laird, general manager of the Alaska Support Industry Alliance, a trade association of businesses that support oil field operations. “He very much wants to get it done under his leadership.”
Jim Clark, the governor’s chief of staff, said Murkowski will give Republican primary winner Sarah Palin a detailed briefing on the negotiations.
“We need a concrete plan for the people who are going to carry the torch forward,” he said.
Palin said Tuesday night that if she wins November’s general election, she wants to open negotiations to other projects that might compete with the oil the three oil companies are pushing.
“We’ll deal with the oil companies and their plan to study if they want to build a gas line. At the same time, we’ll open it up to other entities that are interested in this project. We’ll start weighing those objectively and fairly, and I’ll work with the Legislature, not against them, in the process.”
Ken Boyd, a former state oil and gas director who now consults for smaller oil companies, said it would be irresponsible to simply toss Murkowski’s proposal and start over, notwithstanding Palin’s campaign criticism that the contract is not the best deal for Alaskans.
“Nobody with any sense would say, ‘I’m throwing this whole thing out and starting over,’ “ Boyd said. “You have to acknowledge that a whole bunch of work has been done and some parts of (the contract) have to be preserved, no matter who is ultimately elected governor.”
Murkowski and his top aides negotiated the contract with the companies in private for about two years, aiming to spark a pipeline project that would allow producing the North Slope’s huge reserves of gas.
But it is not a deal to build a pipeline. Instead, it would set state tax, ownership and other terms if the producers build one.
A large number of lawmakers from both parties have been vexed by some terms in the draft contract, including a decades-long freeze on oil tax rates, partial state ownership of the line and a lack of harder commitments to actually build a pipeline. Lawmakers also must agree to change state law before some contract terms can be allowed. They failed to do so during two special sessions this summer.
Murkowski said Monday that he plans to call lawmakers back to Juneau for another go at contract-related legislation in late September.
Legislative leaders will compare Palin’s vision of a pipeline deal to Murkowski’s, then figure out what changes they want and how quickly they want the governor to make them, said House Speaker John Harris, R-Valdez.
Harold Heinze, a former Alaska oil company executive who now heads a small state agency voters created in 2002 to spur a gas line project, said teamwork within the Republican Party could go a long way toward getting a pipeline deal done in the wake of Murkowski’s defeat at the polls.
If Murkowski decided to strongly support Palin, he’d stand a much better chance of bringing his party together to get the contract approved before he leaves office, Heinze said.
“If he becomes a statesman, backs the nominee and finds some common ground, the odds would greatly increase that they could work something out with the companies,” he said. “If that doesn’t happen, then it’s a big mess.” |
