Murkowksi won't rule out federal role for Alaska gas line

The federal government may be needed to help build a proposed Alaskan gas pipeline, Sen. Frank Murkowski (R-Alas.), ranking member of the Committee on Energy and Natural Resources, said Thursday.

Maureen Lorenzetti
OGJ Online

WASHINGTON, DC, Dec. 13 -- The federal government may be needed to help build a proposed Alaskan gas pipeline, Sen. Frank Murkowski (R-Alas.), ranking member of the Committee on Energy and Natural Resources, said Thursday.

"Let's keep all our options open," Murkowski said in an interview at his "hideaway" office near the Senate floor. "It's too early to make any determinations."

Murkowski said he plans to host a stakeholders' meeting in Washington next month to see where negotiations stand between pipeline companies and producers. Senior White House officials will also attend the meeting, at a location still to be determined. Gov. Tony Knowles (D) will also be invited, he said.

A pending energy plan recently unveiled by Senate Democrats includes an Alaskan gas pipeline proposal authored by Murkowski's counterpart, Jeff Bingaman (D-NM). Bingaman succeeded Murkowski as chairman when the Democrats took control of the Senate in June.

The Democratic bill would provide federal loan guarantees of up to $10 billion for an Alaska gas pipeline, provided the applications for certificates to move forward were filed within 6 months after the bill was passed. Democrats do not endorse a specific route but call for expedited federal review if a pipeline application is filed.

An energy bill passed by the Republican-led House does not offer the loan guarantees but calls for expedited permitting. Murkowski's own energy plan, introduced earlier this year, does not contain Alaskan gas line language.

Murkowski said he was open to considering Bingaman's plan when the Senate begins debating energy reform legislation early next year, but wants more discussion before endorsing one proposal over another.

The senator suggested that producers are not terribly receptive to the idea of loan guarantees because "of the bad PR that might be involved."

BP PLC, one of the companies with North Slope gas production, said although it had not sought the loan guarantee proposal in the Bingaman bill, the measure would contribute to a "clear predictive market-driven regulatory framework."

Ken Konrad, BP's Alaskan gas vice-president, said the pipeline won't be built unless it is supported by economics and the Canadian and US governments.

Konrad said BP is neutral regarding the route. He predicted the line would take 8-10 years to plan and build, and it would have a life of up to 50 years.

Industry officials told the committee earlier this year that today's lower natural gas prices are discouraging interest in the pipeline, which could cost several billion dollars to build.

Murkowski said pipeline companies plan to present a business plan to producers early next year that may shed more light on what policy makers should do next.

"I'm not suggesting that we [the Alaskan delegation] wouldn't support it, but you have to be careful of the trade-offs involved," he said. "The bill is route-neutral, and my preference is for a southern route that will help Alaskans."

He added it may make sense for the state to hold an equity position in any future line, but reiterated it was "too soon" to make any formal decisions on the matter.

"We have to be careful," he said. Alaskans want the line built "but it has to done with the state's interests in mind."

In a related effort, Murkowski said he plans to meet with White House officials Thursday afternoon to discuss the gas pipeline and other energy issues.

One likely topic of discussion between the senator and administration officials will be how to pass a comprehensive energy bill next year that includes a leasing provision that could open a portion of the coastal plain of the Arctic National Wildlife Refuge to drilling.

Murkowski said the White House plans to expand its involvement in the issue, and will help spearhead a "task force" that includes other key Republican leaders, including Larry Craig (R-Ida.), chairman of the Republican Policy Committee, Craig Thomas (R-Wyo.), and Jon Kyl (R-Ariz.).

The junior senator from Alaska also downplayed criticism from his political opponents that he will not be an effective advocate for ANWR because he is now running for governor of Alaska. Murkowski said there will be plenty of time for him to campaign in the state and take care of business when Capitol Hill is in session.

"They have recesses all the time around here," he said.

And whether Murkowski is in Washington or not, the issue has taken on a life of its own, he said. Political momentum is building for ANWR exploration and "the timing is moving in our direction."

Helping to keep that momentum going will be the White House, which plans to step up its ANWR lobbying, he said.

Contact Maureen Lorenzetti at maureenl@ogjonline.com

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