Alaska gov. plans third try at gas pipeline - Yahoo! News

ANCHORAGE, Alaska (Reuters) - Outgoing Alaska Gov. Frank Murkowski said Wednesday he plans to call a third legislative session to try to win approval for a more than $20 billion natural gas pipeline deal that would pump badly needed fuel to the U.S. Midwest.
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Murkowski, whose re-election bid was ended by an overwhelming defeat last week in the Republican primary, said he wants to start the special session on September 19, giving lawmakers enough time to approve the contract before the November general election.
To make his pipeline deal more appealing, Murkowski said he and the North Slope oil producers -- BP, ConocoPhillips and Exxon Mobil -- have invited lawmakers to participate in a new round of negotiations.
The lawmakers, to be selected for their committee positions and other special expertise, will help rewrite contract provisions that have drawn the most public criticism, Murkowski said at an Anchorage news conference.
The provisions include promises for a long-term oil tax freeze that critics believe violates the state constitution and construction and labor commitments that critics consider vague and inadequate.
"The producers indicated that, as far as they were concerned, that these items were negotiable and they were willing to pursue it," Murkowski said.
The gas pipeline, a decades-long dream of Alaska officials, would run about 3,600 miles from Prudhoe Bay to Chicago or some other U.S. Midwest hub.
It would provide a means for shipping the known 35 trillion cubic feet of natural gas reserves in North Slope oil fields, primarily Prudhoe Bay. The pipeline would take several years to build, according to state officials.
Murkowski's proposed contract with the North Slope producers, unveiled in May, establishes terms for taxes, royalties, lease duration and a 20 percent state investment in the project.
Critics say the deal's terms concede far too much to the oil companies and would surrender important state powers necessary to protect the public interest, including the power to take disputes to court. The critics include the GOP gubernatorial candidate, former Wasilla Mayor Sarah Palin, and the Democratic candidate, former Gov. Tony Knowles, who is seeking a return to his old job.
Murkowski said Wednesday that even though he will be replaced by a new governor in December, there is a need to renegotiate and ratify the contract quickly.
That is because Alaska voters are likely in November to approve a ballot initiative that would charge the oil companies a reserves tax of nearly $1 billion a year for the known North Slope natural gas that is not being shipped to market, he said. The gas pipeline contract, if signed, would negate the reserves tax and its associated threat of litigation by the oil companies, he said.
Delays in getting the contract in force would also increase the likelihood of natural gas from elsewhere displacing the potential for Alaska gas in the U.S. market, Murkowski said.
"It's certainly appropriate that we recognize that delay could put this project in significant peril," he said.
House Minority Leader Ethan Berkowitz, an Anchorage Democrat, said chances for legislative approval in another special session were slim. He noted that Murkowski has invited only members of the Republican majority to participate in new pipeline negotiations.
"If they're intent on having an all-Republican pipeline instead of considering an all-Alaskan answer, there's no point in having a third special session," Berkowitz said.