Bill sets stage for gas pipeline bidding
Unhappy with terms, BP indicates it will not submit a proposal
By SABRA AYRES
Anchorage Daily News
Published: May 12, 2007
Last Modified: May 12, 2007 at 05:14 AM
JUNEAU -- Gov. Sarah Palin's gas pipeline bill sailed through both houses of the Legislature on Friday as last-minute opposition pushed by the state's big oil producers melted away.
Passage of the bill kicks off a competitive bidding process for the right to build a multibillion-dollar North Slope gas line. Palin refused to compromise with opponents in the Legislature's closing weeks, saying her bill would get a pipeline built on terms favorable to the state.
And, as threatened, one North Slope producer said after the votes Friday that it will not participate in the project.
Palin called the bill's passage a historic moment for the state and a crucial step toward ensuring a healthy economy for future Alaskans. Once built, the pipeline would push trillions of cubic feet of North Slope natural gas to market and boost state revenues, her gas line team said.
"We have a lot of confidence in where we are going today," Palin said, flashing a smile at a triumphant press conference packed by state officials and legislative leaders.
The House and Senate bills have one technical difference to iron out before they can be passed by the Legislature and moved to the governor's office. Rep. Mike Chenault, R-Nikiski, and Sen. Bert Stedman, R-Sitka, said their Finance Committees expect a bill would be ready for final approval by late Friday or early today.
The bill, called the Alaska Gasline Inducement Act, sets out guidelines for companies wishing to compete for the right to build a gas line. In exchange for inducements designed to fast-track the project, applicants must agree to meet criteria the administration says will maximize state profits.
The bill passed unanimously in the Senate. In the House, lawmakers reinserted a collective bargaining requirement removed by the House Finance Committee.
Majority Leader Ralph Samuels was the only "no" in the first of two House votes Friday. The bill needs language that "would get a few more companies to get in the game," he said.
In a reconsideration vote, Samuels changed to yes.
Democrat Rep. Mike Doogan of Anchorage praised his House colleagues for the bipartisan hard work they had all committed to the bill.
"I hope today is the day we drive the golden spike," said Sen. Hollis French, D-Anchorage. "It's been a long struggle."
Palin was elected to office in November after promising to succeed where her predecessor failed. Former Gov. Frank Murkowski negotiated a gas line deal with the state's three largest oil producers that lawmakers rejected as giving too much to the industry with too few returns for the state.
Palin's gas line team insisted AGIA would create a fair and transparent selection process. The state would grant a license only to a pipeline builder agreeing to the state's terms.
BP, Exxon Mobil and Conoco Phillips, as well as other industry groups, quickly criticized the bill. In hours of committee testimony, they urged lawmakers to strike the state's strict requirements and make them more flexible. They wanted guaranteed long-term tax stability to balance what they called the enormous economic risks of the project.
Some experts have put the cost at up to $30 billion.
In final testimony last month, the three big oil companies told lawmakers that if AGIA passed as is, they would not participate.
"We're disappointed," said Steve Rinehart, a spokesman for BP, after AGIA approval Friday. "We made our issues and point of view as clear as we could during the process. The way the bill looks to us now, we don't see a way we can submit a proposal. This gas line is a crucial piece of business. It needs to be built, and it needs to be successful."
Exxon Mobil and Conoco Phillips did not return requests for comment Friday.
Palin's philosophy of creating more independence from the oil companies caused concern with lawmakers and other critics, who said the pipeline would never happen without the producers.
Senate President Lyda Green, a Republican from the governor's hometown of Wasilla, told reporters on May 1 that she doubted AGIA as written would "attract anyone."
The governor's popularity ratings outside the Capitol suggested she would win a fight on the floor, and any pre-floor fight that might have happened in the House and Senate Finance Committees was overtaken by events.
On May 4, two former and one current House members were indicted on federal charges of bribery and conspiracy associated with legislative action last year on state oil taxes. Rep. Vic Kohring, R-Wasilla, and former Reps. Bruce Weyhrauch, R-Juneau, and Pete Kott, R-Eagle River, all pleaded not guilty.
On Monday, Bill Allen and Rick Smith of Veco Corp, a company with extensive oil industry interests, pleaded guilty to charges they bribed the accused legislators.
The corruption scandal created a black cloud over the Capitol; few lawmakers wanted to be associated with sympathy for oil industry pipeline concerns.
AGIA picked up momentum and moved swiftly through both finance committees. A week later, both houses passed the bill.
"The tide did seem to shift then, certainly within these four walls," Palin said. "Boy, what a difference a week makes." |
