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Federal Pipeline Coordinator: Negotiate with the ProducersSo there was no mistaking his message today -- give the producers some comfort on state taxes, or forget about the gas line.Related Content
A major natural gas pipeline to lower 48 markets will not be built unless state officials negotiate fiscal terms with North Slope producers. That was the message of the federal coordinator for the gas line project, in a presentation to Commonwealth North today. Larry Persily has been a state government official in two administrations, a newspaper managing editor, an opinion page editor, and a legislative aide. In all of those roles, he has been known for saying what's on his mind -- directly. So there was no mistaking his message today -- give the producers some comfort on state taxes, or forget about the gas line. Persily worked in the administration of Governor Frank Murkowski, but he says when pondering a gas line, Alaskans just have to get over him. "You know I don't use the word 'fiscal certainty' because people associate fiscal certainty with Frank Murkowski, which they associate with bad things, and I don't want to connect the dots there. But if you're going to get a $40 billion project, you're going to have to have some sort of fiscal deal with the state. Because no company is going to invest that money with the unknowns. Now that doesn't have to be a 35-year lockdown on taxes, as Murkowski had proposed." Persily reported to Commonwealth North that the gas line project by Transcanada and Exxon is on track -- on paper. The Federal Energy Regulatory Commission is set to start public scoping meetings on the project in January. Persily said he sees no roadblocks to a favorable environmental impact statement. "I have not heard anyone say this will not end in a certificate. That's not to say someone won't challenge it in court, or the EIS, but I haven't heard anyone say that this isn't going to end in a certificate and a full EIS." But Persily says that will end up being a very expensive certificate if there is no financing for the project. He compared the Alaska Gasline Inducement Act to a building permit without the construction of a house. "Unfortunately there are people who believe AGIA was a deal for a pipeline. I'm sorry to break it to them, either they misunderstood or I think, truthfully, they were misled. AGIA doesn't get you a pipeline. Never did, never will; can't." Persily's message resonated with Dave Harbour, who has been tracking gas line issues for years. Harbour, publisher of the website Northern Gas Pipelines, says it's folly not to negotiate with the producers. "It stems from greed for this generation. We're always thinking about section 8 of the Constitution, maximize the money from natural resources for the people. But the truth of the matter is, if we don't maximize resource income for this and future generations of people, all we do is squeeze every drop of income we can out of the investors for this current, greedy generation and leave nothing for the children -- no jobs, no services." But former gubernatorial candidate Bill Walker says the state should just do a project to tidewater on its own, shipping liquefied natural gas to Asian markets. Walker says the producers just need to be told to cooperate. "And they will do it. I have no question that they will do it. Once it's time that they realize that their gas -- you know, that they control; our gas, which we own -- will go to market, they will step up to the plate and say ok we will produce it for you." Persily says the LNG project would not be eligible for the package of incentives passed by Congress in 2004 -- including loan guarantees and a tax credit for a gas treatment plant. He says the best thing for the next 50 years is the major line through Canada, with a spur line serving Alaska’s natural gas consumers after that.
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jmacinak said on Saturday, Aug 13 at 1:53 AM
Persily performed a similar rant, making assumptions that are no longer true. We have a newspaper reporter telling us to sell our gas into the wrong market for Alaska, and tells us to give the producers more tax breaks and credits to do what they were supposed to do anyway if they found oil and gas. The extortion continues apace. If we can keep these yahoos from giving away the farm until the next gubernatorial election maybe Mr Walker would consider taking a new shot at Mr Parnell. And Mr Persily, Alaska doesn`t need those federal guarantees. We`ll build our own gasline and pay the wellhead value. That seems to be what it will take. From the comments I read Alaskans are ready to take the initiative on an all-Alaskan project to tidewater. We don`t need no stinking federal guarantees. Alaska still has a triple credit rating, and Japan will take all that "anchor" gas we need to sell them in order to keep the in-state tariff low for Alaskans.
72284794Anonymous said on Saturday, Aug 13 at 2:01 AM
Our own federal Energy Information Agency said any gasline from Alaska to the lower 48 wouldn`t be economic for 50 years at least because of shale gas and horizontal drilling. Why is Persily repeating his failed mantra? Your guess is as good as mine. Money talks. He`s a paid lobbyist to get Alaska gas to the tar sands as cheaply as possible to conform with politically popular projects. Alaska`s most lucrative choice is LNG to Japan. In the unlikely event the lower 48 would ever need Alaska gas, a free market would provide a way to get more. Hopefully we will win the "warehousing" case against Exxon. That would add Pt.Thomson to the flow.
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