By the OGJ Online Staff
WASHINGTON, DC, Jan. 30 --Alaska North Slope producers will meet with US officials and pipeline companies Feb. 4 in Washington to review regulatory obstacles that could delay or postpone a proposed arctic gas pipeline, according to industry and government officials.
Alaska Gov. Tony Knowles (D) was invited but will not attend, a spokesman said. He said the governor has already held similar meetings with producers and pipeline companies in Alaska. Instead, Knowles' Commissioner of Natural Resources Pat Pourchot will represent the governor at the meeting.
It is unclear who will represent the Bush administration, industry sources said, although the White House has several high-level policy analysts with extensive knowledge of the issue. Vice-Pres. Dick Cheney's top energy policy aide Andrew Lundquist is the former chief of staff to Sen. Frank Murkowski (R-Alas.), the lawmaker who organized the meeting last December (OGJ Online, Dec. 13, 2001).
The vice-president's office could not be reached for comment on whether Lundquist or another White House official will attend the meeting. Sources said that at a minimum they expect representatives from either the Federal Energy Regulatory Commission, which oversees pipeline permitting, or someone from the Departments of Interior or Energy.
A Senate Republican energy bill authored by Murkowski does not have a specific provision for the gas line, but Murkowski said last month the federal government may need to step in to make sure the line gets built in a timely fashion (OGJ Online, Dec. 13, 2001).
The Senate Democrats' pending energy bill includes an Alaskan gas pipeline proposal by Jeff Bingaman (D-NM), Committee on Energy and Natural Resources chairman.
The Democratic bill would provide federal loan guarantees of as much as $10 billion for an Alaska gas pipeline, provided the applications for permitting certificates are filed within 6 months after the bill is passed. Democrats do not endorse a specific route but call for expedited federal review if a pipeline application is filed.
A BP PLC official said last month that under current economic conditions, the $15-20 billion pipeline will have a difficult time attracting capital. A more detailed picture will develop later this winter, however, when the large North Slope producers -- BP, ExxonMobil Corp., and Phillips Petroleum Co. -- review a $100 million business plan for the project (OGJ Online, Jan. 15, 2001).
Phillips last week said all three producers support legislation that would update the 1977 Alaska Natural Gas Transportation System Act that first authorized permits for a line. Producers also want accelerated depreciation on federal taxes. But Phillips alone is publicly supporting additional tax incentives. The company wants a price-sensitive tax incentive that would kick in when wellhead prices fell to $1.25/MMbtu, company officials said.
Neither BP nor ExxonMobil have said they want tax incentives to make the project more attractive, although BP said earlier this month it would accept them if offered. ExxonMobil has stayed publicly silent on the issue.
Another point producers agree on is that they are route-neutral. The Alaskan government and the US House of Representatives are on record as favoring a more expensive southern route paralleling the oil pipeline to Fairbanks and then the Alaska Highway to British Columbia. Canadians favor a northern route from Prudhoe Bay field east across the Arctic Ocean to the Mackenzie Delta, and then south along the Mackenzie Valley.
Both producers and pipeline companies say plans by Canadian producers to proceed with their own pipeline from the Mackenzie Delta will not compromise plans for a line to move North Slope gas.
