Associated Press 

Slow pace of gasline development dismaying to Gov. Walker

Administration hopes terms of key contracts be settled before session ends


Gov. Bill Walker said he wants the state and the North Slope's major producers to reach agreement on key contracts and issues related to a major gas project before the end of the current legislative session.

"If agreements are not reached by the end of the regular session, we will need to consider all of our options going forward," Walker said in a statement to The Associated Press on Wednesday. "However, at this time we do not know what all of those options would be."

In a letter to leaders of BP, ConocoPhillips and Exxon Mobil dated last week, Walker made clear his desire to reach agreement on eight outstanding issues before the regular session ends. He said he would have "no other choice" but to consider other options for commercializing Alaska's gas if agreement is not reached.

Sen. Cathy Giessel, R-Anchorage, and chair of the Senate Resources Committee, said Walker may view this as a negotiating technique. The companies are partners with the state in pursuing a major liquefied natural gas project.

Officials with the companies, state and the state-sanctioned Alaska Gasline Development Corp. appeared before the House and Senate Resources committees Wednesday to provide updates about the project.

Deputy Natural Resources Commissioner Marty Rutherford told House Resources that the administration is committed to the Alaska LNG project, but it is also concerned about the "slow pace" of the commercial agreements. At one point, it was hoped that agreements would be brought to lawmakers for consideration last year. Instead, a special session about the gas line last fall focused on the state buying out TransCanada Corp.'s position in the project. The Alaska Gasline Development Corp. took over TransCanada's interests.

Now, the hope is that lawmakers will have the agreements and a constitutional amendment related to fiscal terms for a project to consider during a special session this spring, Rutherford said.

Dave Van Tuyl, regional manager for BP in Alaska, told the House Resources Committee he would love for the agreements to be done, but he said they are complex and will take time to work out. The underlying agreements will bind the parties together for decades, making it essential that the agreements are done fairly and well, he said.

Rutherford said it's the administration's hope to get agreements to the legislature by the end of March - weeks before the scheduled end of the regular session - to set up a special session.

The schedule is driven in part by the desire to get a constitutional amendment on the ballot for this year's general election, she said. The producers have said they want predictable and durable tax and royalty terms. The attorney general has said a constitutional amendment would be needed to support that "fiscal stability" agreement, Rutherford said.

The next general election is 2018.


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