JUNEAU Mar 02, 2007 (AP)
Gov. Sarah Palin introduced natural gas pipeline legislation she said Friday is the first step in ultimately delivering trillions of cubic feet of North Slope reserves to the U.S. market.
The multibillion dollar pipeline has implications for North America's long-term energy supply for heating homes and businesses, and already is being widely discussed by lawmakers, energy regulators and oil company executives from Juneau to Washington, D.C.
Palin warned that the state can't afford to let gas supplies sit when Americans depend on foreign imports to fuel homes and businesses. "Alaska can and must help," she said.
By presenting Alaska's lawmakers with the proposed Alaska Gasline Inducements Act, also known as AGIA, Palin formally sets aside failed efforts by her predecessor Frank Murkowski.
It also means Exxon Mobil Corp. (XOM), BP PLC (BP) and ConocoPhillips (COP), which had an agreement in principle with Murkowski, must start over, but this time compete on a larger playing field. At least 12 groups or companies have expressed an interest in bidding for the right to build the pipeline.
Palin's bill sets project criteria which energy companies must meet in exchange for inducement incentives from the state to build a pipeline. It was not immediately known when the legislature would start hearings on the plan.
One of those inducements is a stake up to $500 million to offset startup costs for the company or group of companies selected to build the pipeline. The successful bidder must match that amount in order to receive the state subsidy.
The bill also affords tax incentives and royalty breaks for North Slope oil and natural gas lease holders Exxon Mobil, ConocoPhillips and BP or others who are among the first to ship gas in the pipeline.
Copyright (c) 2007 Dow Jones & Company, Inc.
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