By OGJ editors
HOUSTON, July 26 -- Alaska Gov. Frank H. Murkowski has expanded the call of the legislative special session now under way to study the feasibility of a natural gas spur line to south-central Alaska from the proposed Alaska gas pipeline.
The state's legislature convened in special session in Juneau July 12 to discuss issues about partial state ownership of a proposed pipeline to carry gas from the North Slope to the Lower 48 (OGJ, July 24, 2006, Newsletter).
On July 25, Murkowski added a $4 million appropriation bill for the Alaska Department of Natural Resources for the feasibility study of a spur line.
"It is important to get this process started now," Murkowski said of the spur study. Alaskans are concerned about provisions for in-state use of North Slope gas, he added.
"This appropriation will help show all Alaskans we are committed to providing the best information for getting a line built to our most vital region," Murkowski said. "The Kenai Peninsula will be the engine that drives the economics of a spur line."
The special session initially was called to consider oil tax changes and other legislation related to a proposed pipeline contract. In May, Murkowski made public a draft gas pipeline agreement between the state and BP PLC, ConocoPhillips, and ExxonMobil Corp.
Separately, Alaska Sen. Gene Therriault, who chairs the legislative Budget and Audit Committee, released a 52-page letter outlining what he sees as flaws in the contract with producers.
The contract calls for the state to freeze certain oil taxes for decades to encourage producers to commit to the $20 billion pipeline project. Therriault said the contract lacks enough commitments from the producers that they actually will build a pipeline.
"It has no time limits or performance standards," Therriault said of the contract. He recommends definite work commitments, including project milestones and deadlines for reaching those milestones.
A Murkowski spokesman confirmed the administration had received Therriault's letter, but he said the administration had no immediate comment.
