April 23, 2002
12:00 AM
WASHINGTON -- Alaska Sen. Frank Murkowski today won Senate approval for a tax incentive designed to make construction of an Alaska natural gas pipeline to the Lower 48 economically feasible. Moments before a key vote on a cloture motion that would have prevented the provision from being included in the bill, the Senator won approval of the gas tax amendment co-sponsored by Sen. Ted Stevens. The amendment provides a federal income tax credit to builders of a southern route for a gas line if the price of natural gas is below $3.25 per thousand cubic feet (roughly 1 million btu). The credit would stay in place for 15 years after the gas line is completed. Gas producers would be required to repay the credits in full when the cost of gas rises above $4.85 per thousand cubic feet. The payback provision would never expire until all of the credits are paid back. “This was a tremendous step forward to help make a natural gas pipeline for Alaska a reality,” said Murkowski. “This provides the financial ‘safety net’ that should allow for financing and construction of the pipeline. Alaskans are ready to do their part to protect America’s energy security. This provision helps ensure the economic viability of the gas line. Without these safeguards, Alaska natural gas could stay in the ground for a very long time,” said Murkowski. “This tax provision is the final critical piece of the comprehensive package needed to finance and construct the gas pipeline. The adoption of this tax credit is good news for Alaska and America. It means more revenue for the state’s budget, more jobs for Alaskans and access to gas resources for in-state use,” said Sen. Stevens. Murkowski noted that the amendment should have no net cost to taxpayers because the payback provisions will require the companies to repay any tax relief granted during periods of high natural gas prices. “This truly is a win-win situation for all involved,” Murkowski said. “The nation will benefit because of the increased supplies of this clean burning fuel. Alaskan communities will benefit from the construction jobs and access to natural gas that will fuel their future energy needs and their economies. And in the end, because of the payback provision, it won’t cost the federal government a penny.” The energy bill contains a package of amendments designed to further construction of an Alaska gasline. The other provisions include: · A ban on a northern route; · Clarification of how the state will control the gas to promote economic development within Alaska; · Establishment of an expedited permitting process for a line; · Regulating how the pipeline will be expanded; · $20 million for a worker training program, including local hire provisions. The energy bill also keeps alive other proposals for use of Alaska natural gas, from construction of an LNG facility for export of gas, to potential petrochemical plant development in the Railbelt. The amendments should help the companies build the gasline that should produce more than 3,500 jobs in Alaska and provide the state with $22 billion in revenue over the life of the gas line. The Senate early this afternoon also voted to invoke cloture on the energy bill, so it is likely the measure will come to final passage on Thursday of this week.