A $2 billion subsidy to help finance the construction of a new natural gas liquefaction facility and tankers to transport LNG to West Coast markets has been folded into a massive omnibus spending package that the House is expected to take up Monday (Dec. 8), according to Rep. Edward Markey (D-MA). A Senate vote on the $820 billion appropriations bill may not come until late January.

Markey sent a letter to Republican Reps. Joe Barton of Texas and John Shimkus of Illinois last Tuesday alerting them that the Alaska LNG subsidy, which was struck from the energy bill during conference, has resurfaced in the seven-bill appropriations package. Both Barton and Shimkus joined Markey and other Democrats in defeating the proposal, which had been offered by Rep. W.J. “Billy” Tauzin [R-LA) to subsidize facilities to ship LNG from Valdez, AK, to the West Coast, said a Markey spokesman. The proposal came as a “surprise” at the end of the final House-Senate conference session last month on the energy bill [HR 6].

As a result, “the energy bill, which [was] chock full of pork barrel subsidies…, didn’t include this egregious and unwarranted taxpayer giveaway,” said the Massachusetts lawmaker. But “this bad idea has now resurfaced as a rider to the final appropriations bill, ensuring that ExxonMobil, ConocoPhillips and BP get the taxpayers to subsidize LNG facilities and tankers in Alaska.”

But Don Duncan, vice president for federal and international government affairs at ConocoPhillips, said Markey had his facts wrong. “We are not only not pushing this [LNG project], we are opposing this,” he noted, adding he hadn’t heard about the $2 billion subsidy until last week.

Transporting LNG to the Lower 48 states “does not make much sense for Alaska; the economics are way off,” he told NGI. “If it were economic, we would have been pushing it [LNG] long ago” rather than focusing on the construction of a natural gas pipeline from the North Slope. “A $2 billion loan guarantee is not going to do much for a project like that,” Duncan said.

Markey, in a press statement, said the omnibus spending measure would authorize funds so that the broad energy bill, if it clears Congress, could provide $2 billion in federal loans for the construction and operation of an LNG facility in South Central Alaska. The energy bill is stranded in Congress, having passed the House only to be blocked in the Senate. The Senate has vowed to take up the measure again in January.

“In recent years, a number of existing LNG terminals have either been expanded or reopened to meet increasing demand, while numerous other liquefied natural gas terminals are currently being planned for construction at various sites around the country. At the same time, new LNG tankers are being ordered and built — all without the provision of any taxpayer-subsidized loan guarantees. I see no reason why the American taxpayer needs to subsidize this particular project,” Markey wrote in his letter to Barton and Shimkus.

Given “your prominent place in the shaping of energy policy for the Republican caucus, I urge you to take immediate action to strip this controversial provision from the consolidated appropriations bill, or barring that, to join me in voting against this bill.”

©Copyright 2003 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.