Murkowski urges congressional panel to visit Alaska, weigh gas potential

Alaska governor Frank H. Murkowski is urging congressional task force members studying US natural gas supply alternatives to visit Alaska to evaluate firsthand that state's potential role in supplying gas to the Lower 48.

Aug. 1, 2003

2 min read

By OGJ editors

HOUSTON, Aug. 1 -- Alaska governor Frank H. Murkowski is urging congressional task force members studying US natural gas supply alternatives to visit Alaska to evaluate firsthand that state's potential role in supplying gas to the Lower 48.

In letters to Energy Committee Chairman Billy Tauzin and House Committee on Resources Chairman Richard Pombo this week, Murkowski stressed that Alaska's North Slope contains 35 tcf of proven reserves, with another 65 tcf estimated. He said the $20 billion pipeline system required to make this gas available to the Lower 48 is a better alternative than importing volumes in the form of LNG, which would cost at least $26 billion.

"And, it is better for the United States from a balance-of-payments point of view," said Murkowski.

Tauzin and Pombo cochair the Speaker's Task Force for Affordable Natural Gas.

The US Senate has approved a tax credit for the project to reduce the financial risk of fluctuating gas prices, but the House has not. The industry has said this tax consideration is critical for the project to proceed.

"I believe that the panel's visit to Alaska would help members in considering such issues as pipeline route, federal and state financial incentives, and regulatory issues," Murkowski said. "Panel members would be able to see existing operations on the North Slope and in Cook Inlet, future exploration sites, and possible transportation routes," and could hear testimony from government and private witnesses with expertise in natural gas development, transportation, and financing.

"Your panel's visit to Alaska would significantly facilitate the development of recommendations to the Speaker by the Sept. 30 deadline," Murkowski said.

The Senate late Thursday approved the energy bill proposed last year by Democrats that includes a $10 billion loan guarantee for the pipeline, and a tax credit to be triggered when the Alberta hub price falls below $3.25/MMbtu. The White House and the House endorse the idea of a pipeline but still have serious reservations about the incentives (OGJ Online, Aug. 1, 2003).