Alaska Gov. Frank Murkowski on Friday accused state lawmakers of “deliberately” trying to slow down plans to contract with North Slope producers BP plc, ExxonMobil Corp. and ConocoPhillips to build a natural gas pipeline and said unless there’s a turnaround in the next few days, the state may lose its chance to build a gasline. Murkowski also discounted reports that BP CEO John Browne wants to slow down negotiations. The governor said he had been “assured” of the producer’s commitment.

In a teleconference on Friday to discuss progress in securing a gas pipeline contract between producers and the state, Murkowski detailed some of his discussions with state lawmakers. Facing two Republican challengers in a primary election on Aug. 22 that could determine his political future — as well as that of the proposed pipe’s — Murkowski said he is encouraged by the state legislature’s mood regarding the pipeline, but he said the time was now to decisively act. A special legislative session that has focused on Murkowski’s pipeline negotiations with the producers is scheduled to end by Thursday (see NGI, July 17).

“The legislature is for overwhelmingly moving ahead with the gasline, with 58 to 28 in favor of signing an agreement now,” Murkowski said. “We had a good discussion, and we are working hard. But we need results. The public expects results…We have a promise to keep to rural Alaska.”

The support Murkowski claims to have is debatable. On Thursday, the Alaska Senate Special Committee for Natural Gas Development rejected amendments proposed by Murkowski to the Stranded Gas Development Act. The amendments would have given the governor the authority to legitimize the pipe contract with the producers. The amendments’ rejection does not necessarily mean the stranded gas portion of the pipe deal is dead, but its chances for passage in the current special legislative session are slim.

“It almost looks like they [the legislators] are deliberately trying to slow this thing down,” Murkowski said of the amendments’ rejection. “For the life of me, I can’t understand a particular vote by the committee. After approving individual sections, they vote the entire thing down…I hear I’m not working with the legislature, and they’re not working with me. It’s extraordinary to have a Republican legislature, a Republican governor, and we can’t seem to work together…This is the greatest opportunity ever to come by any of us. It would anchor the economy for 50 years.”

After the committee failed to pass the amendments, Murkowski chief of staff Jim Clark said their passage now was “clearly an uphill climb.” Murkowski on Friday did not detail what he plans to do to encourage legislators to change their mind in the remaining days of the session. Without the amendments to the stranded gas act, the contract Murkowski has so negotiated with the producers would not be legal (see NGI, May 15). Among other things, the changes would allow the governor to negotiate oil taxes as part of a gas pipeline contract and allow the state to freeze the producers’ taxes for a specific period of time.

Besides the contentious legislature, Murkowski’s push to approve a pipe plan also appeared to be criticized by the BP CEO. In Alaska on Wednesday and Thursday to meet with community leaders about BP, Browne said there was “no need to rush from pressure from [President] George Bush or Murkowski on a gasline agreement.” Browne added that BP had “no specific window or timeline window” to build an Alaska gas pipeline.

Asked what Browne meant, Murkowski said he had been “assured” by the CEO on Thursday of BP’s commitment to the gasline and the company’s willingness to work with the other producers. “Browne reassured me that BP stands behind a long tradition of supporting the economy in the state of Alaska, and their belief is that it is time to wind up negotiations on the gasline unless there’s a good reason not to…I assure you BP has been very cooperative on the timeliness of moving on this.” Murkowski said Browne had only expressed “frustration” at the producer’s inability to complete the limited partnership to jointly operate the pipeline. He offered no other details.

Meanwhile, Alaska Senate President Ben Stevens (R-Anchorage) on Thursday proposed another bill that would require BP, Conoco and Exxon to spend at least $1.5 billion to plan and permit the gas pipeline project before Jan. 1, 2011. The producers would have to establish an escrow account or a letter of credit that would ensure they would live up to their commitment in helping to build the gas line. If they did not live up to their commitments, the account proceeds would be forfeited to the state.

Also Thursday, executives from the Alaska Gasline Port Authority presented the latest version of their project to the Senate Special Committee for Natural Gas Development. The Port Authority is urging an “all-Alaska line” that would run 800 miles parallel to the Trans-Alaskan Pipeline System to Valdez, AK, where gas would be liquefied and shipped to the domestic West Coast.

Murkowski called the port authority proposal unworkable, and he said the state had to focus on the producer contract. However, Port Authority officials said both the all-Alaska and Alaska-to-Canada routes are doable.

Port Authority Executive Director Jim Whitaker said the all-Alaska route would pay for itself, bring Alaska more money and be operational four years sooner than the proposed Alaska-to-Canada gas pipeline.

“We have no higher goal than to keep as much of that wealth as possible in the state,” Whitaker told legislators.

The Port Authority proposal has been endorsed by, among others, former Gov. Wally Hickel. He told Senate committee members on Thursday that he believes the all-Alaska line is important for the state.

“I’m not trying to convince anybody, but that is exactly the one that belongs to the owner state,” Hickel said. “God bless you for looking at what’s best for Alaska.” He added, “If it’s good for Alaska, do it. If it’s bad for Alaska, screw it.”

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