Sitnews - Stories In The News - Ketchikan, Alaska - Opinions


Governor: Energy Bill Defines Framework for Gasline
Appreciates Hard Work Done by Congressional Delegation


November 19, 2003
Wednesday - 12:50 am

Washington, DC - Governor Frank Murkowski said Tuesday that he was very pleased that the compromise federal energy bill provides the basic federal policy framework for a $20 billion natural gas pipeline to the Lower 48.

"I would like to first acknowledge the strong team we have on this issue with our Congressional delegation ­ Senator Ted Stevens, Senator Lisa Murkowski, and Congressman Don Young - and with Arctic Power and the labor unions that have devoted so much time and energy to this bill," Murkowski said. "They did a tremendous job."

"Now that we know the federal parameters with which we are dealing, we can proceed with the gas pipeline," Murkowski said. "The bill contains significant incentives for its construction. And it prohibits the over-the-top route. I believe the incentives in the bill will be sufficient to allow the highway project to go forward."

The three major incentive provisions include a federal loan guarantee of 80 percent of up to $18 billion for construction of the pipeline and gas processing plant, accelerated depreciation on the main pipeline from 15 to seven years, and a tax credit on the processing plant.

"We will continue looking to see what we can do at the state level to assist both the highway and LNG projects," Murkowski said. "We will continue to meet with the producers, major pipeline companies, and commercial interests in Canada and around the Pacific Rim to move a gas transportation project to construction."

Murkowski said the state also scored well in provisions relating to the National Petroleum Reserve-Alaska and federal offshore leasing. The bill authorizes the Secretary of the Interior to extend existing and new leases in NPR-A, as well as to reduce the federal royalty as an incentive for exploration in marginal areas. It also authorizes a royalty reduction in federal outer continental shelf leasing off Alaska.

The Governor vowed to revisit the Arctic National Wildlife Refuge issue in Congress. "We will not give up on ANWR, which is this nation's best opportunity for a real increase in production of domestic oil," he said. "We will be back."

Murkowski stated that the conferees should have included a per barrel tax credit on heavy oil. "We estimate there are about seven billion barrels of recoverable heavy oil in the Prudhoe Bay area," he said. "We could easily increase our domestic production by that much, if an incentive can be devised to offset the added cost of producing it. We will also be back to pursue federal action on this issue at some future time."

The delegation was successful in including a number of important provisions that will benefit Alaska's energy needs, Murkowski said. These include:

  • Up to $50 million per year for 20 years to the Denali Commission for energy development and transmission throughout the state. Much of the funding would come from the federal share of NPR-A leasing.
  • $5 million authorized per year for seven years to power cost equalization, a state-funded program designed to reduce the cost of power in rural areas.
  • Authorization for the Department of Agriculture to make additional funds available to the Denali Commission for power development and transmission.
  • Authorization for a loan of up to $125 million for the Healy clean coal project through the Department of Energy.

Source of News Release:

Office of the Governor
Web Site


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