Gov. Sean Parnell Wednesday night set out a “road map” for getting access to North Slope gas.
In his annual State of the State address to the Alaska Legislature, Parnell said he talked with the CEOs of Alaska’s major oil producers within the previous 24 hours and it was clear they have not reached agreement on key issues. So he delivered what he calls a “road map” for an Alaska natural gas pipeline.
“First, these companies need to agree to resolve the Point Thomson litigation,” he said. “If no settlement in the state’s interest can be reached with all parties, the state will fight for Alaska’s interest at the Alaska Supreme Court hearing on February 8th in Anchorage.”
Parnell said he also expects the companies to align under the framework of the Alaska Gasline Inducement Act (AGIA) and consolidate all gasline projects. By the third quarter of the year, he wants financial estimates and work schedules for a large-diameter Liquified Natural Gas (LNG) pipeline through Alaska to tidewater.
“If these milestones are surpassed, the 2013 legislature can take up gas tax legislation designed to move the project forward,” he said. “The path ahead is better defined, and benchmarks for progress are in place. And while a lot more work remains, Alaska is closer to the day when our gas can move from the ground to Alaskans and to markets beyond.”
Parnell also took time during the speech to promote the budget he made public last month, saying it holds the line on government spending while adding nearly $4 billion to the state’s savings accounts. He also repeated his call for reducing oil taxes in an attempt to increase North Slope oil production.
“For many years, the TransAlaska Pipeline has provided a pathway to prosperity for Alaskans. But where more than 2-million barrels of oil per day once flowed through the pipeline, less than 600,000 barrels now inch through. And unless we act to reverse this decline, we will pay a stiff price in lost jobs, lost state revenues and lost opportunities,” Parnell told legislators.
Oil taxes promise to be one of the most controversial issues during this year’s session. After the speech, Senate President Gary Stevens said the governor’s tax plan table is flawed and he would like the Senate to introduce its own plan.
Minority Response
House Democrats pledge to fight the governor’s plan to reduce oil taxes.
In the House Minority response to the governor’s State of the State address, Minority Leader Beth Kerttula called Parnell’s plan a “give-away.”
“Alaskans are already investing hundreds of millions of dollars every year in the oil industry in tax credits – three billion dollars in the last four years. Through these credits, actually, we are the biggest investor on the North Slope,” she said.
Kerttula said Alaskans should know where their money is going.
House Democrats voted against Parnell’s bill last session when it passed the House. The caucus this year supports legislation that would increase reporting requirements for oil companies claiming tax credits, including the number of jobs created and the number of Alaskans employed in those jobs.
Democrats also advocate legislation that would invest $10-billion of Alaska’s nearly $13-billion surplus into the state’s Permanent Fund.
“We’ve got to save some of our surplus in the Permanent Fund. That’s what that fund does. It turns a resource that’s not renewable into a future resource for future generations of Alaskans,” she said.
Kerttula also called for investment in education and job training. She criticized Parnell’s education budget, which includes money for rural school construction and college scholarships, but the amount districts receive for operations is the same as last year. Districts across the state stand to lose revenue.
House Democrats are calling for legislation that would require the state to annually adjust the base student allocation for inflation.
