SitNews - Stories in the News - Ketchikan, Alaska


Encourage production of gasline and discourage delay
By Eric Croft


November 03, 2006

We own Alaska's natural gas, and as owners it is up to us to make sure our gas gets to market. That means demanding performance from those who lease the rights to develop our resources. It means protecting ourselves from a situation where a leaseholder "warehouses" our gas while selling gas from other places into our markets. It means providing an incentive to perform, and gaining a means to perform if our leaseholders don't.

Our constitution requires us to manage the resources for the maximum benefit of the people. Alaska is an owner state and our constitution reminds us to act like it.

Last year, Exxon said that they do not intend to develop North Slope gas until after they have developed their Canadian Mackenzie field. Many worry that Exxon might delay until 2020 or 2025 and insist on an over-the-top Beaufort Sea route that avoids jobs for Alaska workers, value-added opportunities and gas for Alaska's consumers but maximizes Exxon's profits from assets in Canada.

This winter Exxon again refused to drill an exploratory well on Point Thomson and was held, once again, in default. They will pay a $20 million fine rather than drill a $20 million to $30 million well. This only makes sense if Exxon wants to delay both Point Thomson and an Alaska gas line in order to develop their Canadian Mackenzie assets first.

No owner would stand for this. We shouldn't either. Our gas is valuable, and we need to encourage production and discourage delay.

The Alaska Gasline Now initiative, now known as Ballot Measure 2, provides an incentive for production rather than delay. Large leases on the North Slope with undeveloped gas reserves would pay an annual reserves tax of 3 cents per thousand cubic feet. The payments are repealed when a gas line, any gas line, is built, and the leaseholders start getting their money back as a deduction from other gas taxes owed to the state. If the line is built soon, they could get all their money back, but if they delay more, it will cost them more.

In effect, the oil companies have to build the line or pay the fine. Either way, Alaska wins.

That is why great Alaskans like Wally Hickel, Jay Hammond and Fairbanks Mayor Jim Whitaker sponsored the initiative last year. That is why 47,000 Alaskans signed to place it on the ballot. Oil industry ads that claim these Alaska sponsors or signers didn't know what they were doing are insulting and wrong.


About: Rep. Eric Croft (D-Spenard) is a member of the Alaska House and is a sponsor of the Alaska Gasline Now initiative.



Note: Comments published on Viewpoints are the opinions of the writer
and do not necessarily reflect the opinions of Sitnews.


Send A Letter -------Read Letters

E-mail the Editor at

Stories In The News
Ketchikan, Alaska