Exxon, BP Ask for Changes in Alaska Pipeline Plan

ExxonMobil and BP asked Alaskan lawmakers last week to amend the state's proposal for a natural gas pipeline from the North Slope.

Gov. Sarah Palin's (R) proposal that would bring large North Slope natural gas reserves to markets in the lower 48 states includes set criteria for applicants who want to build the pipeline.

But representatives from both companies told the state Senate Resources Committee that a producer-owned pipeline would be best value for all parties, applications that want to build the pipeline should be able to set their own criteria for financial certainties and other terms of inducements.

"The best way to allow competition is to allow applicants to come up with whatever inducements they feel are necessary," David Van Tuyl, the commercial manager for BP's Alaska Gas division.

Uncertainty over the proposal's financial terms poses a serious risk for potential builders, said Martin Massey of ExxonMobil. "We are willing to take on the geologic, cost and future commodity rate risks, but we can't take on the risk of any unknown changes to the fiscal terms," Massey said.

Neither offered any specific alternatives or changes to Palin's Alaska Gasline Inducement Act, but lawmakers want the companies' input.

"I would genuinely like to see what kind of inducements they want or need," said state Sen. Bill Wielechowski (D). "We have a process here where people can come forward with suggestions on legislation. We can do this without the producers, but I think it's preferable to do it with them" (Sabra Ayres, Anchorage Daily News, March 24).

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