Murkowski -- who lost last week's Republican primary to Sarah Palin -- has been negotiating with BP, ConocoPhillips, Exxon Mobil Corp. and state lawmakers over a final contract to allow future construction of the project to tap the slope's 35 trillion cubic feet of reserves.
While pledging last week to call a special session to finalize the contract before his term ends, Murkowski's chief of staff Jim Clark said yesterday that a final contract on the pipeline might be left to state lawmakers and the oil companies to decide.
"This has got to be legislative-driven at this point," Clark said yesterday on the Alaska Public Radio Network. "By that, I mean the Legislature has got to come to us and say here are the things that we would require in order for a contract to go forward."
"The question at this point is if we should even go into special session," said state Rep. John Coghill (R) following last night's meeting. "We wanted to know if they're open for discussion or if we should just wait until January and start over."
The governor plans to speak at a press conference today to discuss his plans for the pipeline project (Anchorage Daily News).
New Alaska tax mitigates losses from Prudhoe Bay shutdown
While the Alaskan government stands to lose anywhere from $500 million to $2 billion in state revenues due to the partial shutdown of BP's operations in Prudhoe Bay, Alaska, a new oil tax will keep the state running, officials estimate.
Laying out four scenarios, state officials illustrated the possible hit the state may take during the current budget year from lost oil revenues due to the Aug. 6 shutdown of more than 200,000 barrels per day of production in Prudhoe Bay.
At best, the state will lose $460 million if the shutdown continues through January and oil prices average $53 per barrel. However, if the shutdown lasts through June 30 of next year and oil prices remain about $70 per barrel, the state stands to lose $2 billion.
But thanks to a new oil tax bill approved by state lawmakers earlier this month, the shutdown should not affect state revenues.
The bill shifts the state's tax from being based on gross output to a taxation of net profits. It establishes a base tax rate of 22.5 percent and increases when the price of oil is above $55 per barrel (Greenwire, Aug. 14).
At current oil prices, the new tax would add $2.3 billion in state revenue annually, nullifying any losses sustained due to the shutdown (Richard Richtmyer, Anchorage Daily News).
Copyright 2006 Greenwire. All Rights Reserved. Visit E&E Publishing for a free trial.
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