Alaska's new freshman US senator, Republican Lisa Murkowski, has a familiar face and name within the oil and gas community; she was a leader in the state's House of Representatives and championed efforts to expand leasing to the Arctic National Wildlife Refuge coastal plain and to build a natural gas pipeline to the Lower 48. She is also very familiar because she is the daughter of Frank Murkowski, now Alaska's governor.
The governor in December appointed his daughter to fill the remaining 2 years of his US Senate term, marking the first time in Alaska history a woman will hold statewide federal office and the first time in US history a father and daughter will each have served in the Senate.
"This is an awesome responsibility for me, and I know it was a very difficult decision to make because there were some truly fine people considered for selection," Lisa Murkowski said then of her father's selection. "I am deeply honored by the faith and trust that has been placed in me to carry forward Alaska's agenda in Washington, DC. And I will do so with the same energy, openness, and enthusiasm that I maintained throughout my years in the legislature. We need ANWR opened now. We need a natural gas pipeline from Alaska to the Lower 48. And economic development does not happen without funding for transportation projects."
The senior Murkowski said he chose his 45-year-old daughter as his replacement because he wanted someone who shared his values and political philosophy, could win reelection to the seat in 2004, and was young enough to serve long term and build seniority.
"She has established her own credentials as a legislator and, as the incoming majority leader in the (Alaska) House, others have demonstrated their confidence in her abilities," Gov. Murkowski said.
The younger Murkowski is seen as more of a moderate on some social issues. In the state legislature she supported a statewide tax to close Alaska's budget gap. She also favored an increase in the gasoline tax and corporate taxes. On energy issues however, father and daughter are on the same page.
Leadership roles
Sen. Murkowksi has assumed leadership roles quickly in the 108th session, being selected to serve as a deputy whip, assisting Majority Whip Mitch McConnell (R-Ky.) on voting strategy and other leadership functions. She was also selected as chairman of the class of new senators elected in 2002.
Scarcely a month after assuming office, Murkowski faced an early and daunting legislative challenge when congressional leaders called for an early vote on ANWR leasing.
Murkowski and her supporters, including fellow Alaskan Ted Stevens, the powerful chairman of the Senate Committee on Appropriations, on 48-52 vote narrowly failed last month to keep an ANWR leasing provision in the budget blueprint. In an interview at her Senate office, the Alaska native called that vote "an early disappointment" and said she and her supporters think a leasing provision can still happen this Congress.
"It is conceivable (that can happen during) this Congress. You are looking at a person who says the glass is half full (not half empty). There is still a possibility this year," she said. "Issues are at play, and we are going to be checking for every possibility to make it happen."
The next debate over ANWR is expected to come this spring as the House and Senate reconsider comprehensive energy legislation. Republican Senate leaders have pledged not to include an ANWR leasing provision in their bill because they don't want opponents of the measure to have an excuse to stall it. A Senate plan is expected to include a title that encourages an Alaskan natural gas export line with fiscal incentives. In the House, an ANWR leasing provision was included as part of a larger comprehensive bill, which passed Apr. 11, that will have to be later reconciled with the Senate. Whether ANWR leasing could survive a conference between House and Senate is uncertain. But the prospects could improve if world events cause a severe oil supply shock or record high fuel prices that last longer than a few months, lobbyists say.
This year, tax breaks for an Alaskan gas line may also be challenging, given current budget woes and escalating costs for the war in Iraq. A pending Senate plan within the Finance Committee calls for $16 billion in energy tax incentives. The Committee also voted Apr. 2 to add a production credit for Alaska gas shipped via a new line. A pending House energy tax package does not include incentives.
Sen. Murkowski declined to speculate on the odds Congress and the White House will endorse loan guarantees and other sweeteners.
"I hope it won't be either-or. To be honest, we don't know how it will play out," she said. And on the chances Congress can actually pass a comprehensive energy bill, she declared she is optimistic.
Pipeline push
Lisa Murkowski's style may for now at least be a bit more subtle than her father's, but she says she is as equally determined to continue pressing for ANWR and the Alaska gas pipeline during her term.
In the case of the pipeline, father and daughter are working together to get the deal done.
She said negotiations between industry and policymakers over what role the federal government should play in building the project are "still in process of coming together."
Gov. Murkowski last month held a day-long meeting on the issue in Alaska with senior management officials from ConocoPhillips, BP PLC, and ExxonMobil Corp. He pledged to find ways to lower the cost of the $20 billion project and to "establish fiscal terms that enhance project feasibility."
Back in Washington, DC, Lisa Murkowksi says she believes that a fiscal package is tenable, but "we'll need to educate members." As for producers, she said the Alaskan delegation, including herself, Stevens, and Don Young, the chairman of the House Committee on Transportation, are asking producers: "What still needs to be done to make this happen?"
They are also lobbying the White House to reconsider its position that price mechanisms are not an acceptable option.
The most recent tax plan supported by producers is a so-called "hybrid" plan adopted by the Senate Finance Committee that avoids a price floor that several members, particularly from gas producing states in the Lower 48, opposed.
Instead of a controversial floor price, producers BP and ConocoPhillips support a production tax credit that provides as much as a 52¢/MMbtu credit for Alaska gas transported to market. The credit phases out as the price at the wellhead rises above 83¢/MMbtu. The credit is not available if the price at the wellhead rises above $1.35/MMbtu (indexed for inflation).
The Senate may also consider a related plan for the US government to guarantee up to 80% of the total capital cost of the project. BP and ConocoPhillips argue that the risk of default is low, and there is precedent for policymakers. Loan guarantees previously have been used in Canada and to support troubled industries. Producers also want the government to allow pipeline owners to accelerate depreciation of the asset to 7 years from 15 years. Finally, they would like to see a 35% tax credit for a gas treatment plant connected with the project.
ExxonMobil has officially stayed silent on the plan.
Sen. Murkowski acknowledged that, under tightening budgets, the gas line plan may faces challenges from both the White House and fiscal conservatives.
"There is a concern, and this stems from [proposed] legislation last year that included a price floor. There is a whole group of free-market people that say price floors are something we can't possibly go with," Sen. Murkowksi said. "But the hybrid doesn't act as a floor. There have been some meetings with administration and our legislative staff to clearly walk through that. This is different than last year. And hopefully these conversations will get support we need," she said.
Bush administration officials have offered varying degrees of support for the gas line's construction. Federal Energy Regulatory Commission Chairman Pat Wood, for example, told the American Petroleum Institute last fall it was one of his agency's "top priorities" and pledged to endorse efforts to streamline permitting between his agency and its Canadian counterparts. But recent testimony to Congress by Sec. of the Interior Gale Norton and a top deputy, Rebecca Watson, an assistant secretary who oversees the department's onshore oil and gas programs, does not include any endorsement of the gas line.
In a separate interview with OGJ, Watson said the administration supports the idea of a gas export line but thinks its construction could prove difficult. She said Congress and the administration must work together to "be creative." However, that creativity may stop short of actual federal monetary involvement. The administration, Watson said, feels any compromise should not put producers without Alaskan interests in an unfair position. "We have to respect the market and investments that have been made," she said.
The White House's May 2001 energy strategy blueprint endorses a gas export line along with other new Alaska energy proposals. It recommends the leasing of the 1002 area of the ANWR coastal plain and expanded leasing opportunities within the National Petroleum Reserve-Alaska. With regard to the gas export line, the report recommends that President George W. Bush direct the secretaries of Energy and State, coordinating with the secretary of Interior and the Federal Energy Regulatory Commission, "to work closely with Canada, the state of Alaska, and all other interested parties to expedite the construction of a pipeline to deliver natural gas to the Lower 48 states."
Then as now the White House has yet to endorse any tax incentives or loan guarantees to encourage construction, saying the pipeline if built should be market-driven.
Considerations
Sen. Murkowski, however, said that current events, such as the war wrapping up in Iraq, may lead policymakers to have a change of heart.
"At some point in time the administration will have to figure out which policy is more important," she said. And the White House's insistence that there is no precedent for using some kind of price mechanism to support a large construction project is "quite honestly a false statement because there have been price supports or enabling legislation for all kinds of things whether they are dams or ports or whatever," she said.
"Realistically, this is no different. We have the administration on one hand saying we shouldn't be going there [using fiscal incentives], but then they have another policy that's a policy of energy independence to the extent possible and a desire to be more reliant on domestic sources of energy. They need to take a look at this and say, 'OK, since we are talking about energy security and increasing domestic production, how can we make that happen?' Which policy will be a priority?"
Transition to Washington
When asked what about Washington surprised her the most, Sen. Murkowski said that Senate parliamentary procedure was a shock: "It's a different animal than anything you'll see."
And voting on the federal budget blueprint was an eye-opening experience, she noted.
"I am just thankful ANWR had an opportunity as an amendment to have some debate on that issue. We probably logged about 4 hr of debate on ANWR out of a total debate of about 50 hr. But there were huge issues involving billions of dollars to be added or subtracted that were given a minute of debate on either side. That process to me is about as undignified a legislative process as you can find," she said.
"There were certainly amendments that were brought up that were repeats of what we had seen six amendments prior. And when you looked at it, you knew the reason it was there was because it was a campaign commercial for or against somebody."
Career highlights
Lisa Murkowski began her term as Alaska's sixth US senator on Dec. 20, 2002, appointed by her father, Frank Murkowski, who served before her in the same senate seat before assuming the governorship last year. She is the first Alaskan-born Senator to serve the state and is only the 33rd female to serve the US Senate since its founding in 1789.
A member of the Senate Energy and Natural Resources Committee, Sen. Murkowski chairs its Subcommittee on Water and Power and serves on its subcommittees on Energy and Public Lands and Forests. Murkowski also is a member of the Senate Environment and Public Works Committee, serving on the subcommittees of Transportation and Infrastructure and Fisheries, Wildlife, and Water. In addition, she serves on the Veterans Affairs Committee and the Indian Affairs Committee.
Employment
Prior to joining the US Senate, Murkowski was elected to three terms in the Alaska State House of Representatives, beginning in 1998. Murkowski's state house colleagues selected her as House Majority Leader for the 2003-04 term, a post she resigned when she was appointed senator. She has been a member of the Alaska Bar Association since 1987, served as an Anchorage District Court attorney for 2 years, and worked in private practice with an Alaska commercial law firm for 8 years prior to her work as a sole practitioner.
Education
Sen. Murkowski graduated from Georgetown University with a degree in economics in 1980 and earned her law degree from Willamette College of Law in 1985.
