A Citizen’s Guide

Former Gov. Tony Knowles, the Democratic candidate for governor, said Thursday he wants to see new proposals for a gas pipeline within two months of his taking office. Sarah Palin, the Republican candidate, said she would reject the law Gov. Frank Murkowski used to negotiate his pipeline contract, introduce a substitute, then welcome all pipeline proposals.

Both held news conferences in Anchorage to detail their plans. Knowles and running mate Ethan Berkowitz made the trip to Fairbanks, too, for a news conference beside a stack of steel pipe at Flowline Alaska Inc.

“We’ve got to get the best deal for Alaska,” Knowles said, standing before blue campaign signs reading “Alaska’s Gas on Alaska’s terms.”

The two candidates’ announcements came the day after Murkowski finally gave up the push for action on his pipeline proposal because of opposition from state lawmakers.

Knowles and Palin both rejected the Stranded Gas Development Act, the law Murkowski used to make the deal with BP, ConocoPhillips and Exxon Mobil to develop North Slope gas. The law lets the governor and his administration change the state’s tax and royalty terms for a gas line contract and grant as much fiscal “certainty” as possible. The idea is to sweeten the deal, but the law only applies when a pipeline project isn’t otherwise economic–when the gas is “stranded.”

“As the governor who initiated that act,” Knowles said, “I think it’s very clear to all parties concerned that the Stranded Gas Act does not apply in the situation that Alaska is in today.”

Palin agrees.

“We can’t accept that huge concessions are the only way to get a gas line built,” she said.

But that doesn’t mean the three companies should throw out their pipeline proposal, both candidates said.

The companies just won’t get the benefits allowed in the Stranded Gas Act.

Knowles spelled out a list of terms for pipeline proposals, including work commitments, “scheduling benchmarks,” and the ability for the state to get out of the contract if benchmarks aren’t met. There have to be provisions for a spur line to Southcentral, a project labor agreement, and “low cost” energy for Alaskans.

“Oil taxes are not part of any gas line contract,” he wrote in a Thursday news release.

“Oil taxes will not be part of any gas line contract,” Palin wrote in her own release.

Palin called for guaranteed jobs, “pre-construction benchmarks,” and provisions for pipeline expansion, among other things. Those basic requirements would be set forth in a bill Palin would introduce to lawmakers in January. The bill would also lay out incentives, including tax deferrals, accelerated permitting, and options for state participation.

Knowles’ terms also include the option of state participation.

Both said they would welcome proposals from the oil companies, the Alaska Gasline Port Authority, TransCanada and MidAmerican Energy Holdings Co., all of whom have expressed interest in building the line.

“There’s going to be four proposals, I think, right off the bat,” Knowles said.

Palin said it was a coincidence that the two press conferences were held on the same day.

Meanwhile, Independent candidate Andrew Halcro, an Anchorage businessman and former Republican lawmaker, said he would pick up where Murkowski left off and try to fix the governor’s proposal.

Halcro put out his gas line plans a week ago. While the governor’s contract has come under criticism, he wrote in a position paper, it’s still the best foundation to move forward.

Halcro agreed with Palin and Knowles about stripping out oil taxes and called for a project labor agreement, a reduction of incentives on the Point Thomson field, a shortened period of fiscal certainty, and language that lets the state develop the gas if the companies fail to. But he disagreed about the Stranded Gas Act and questioned whether other pipeline builders were really interested.

“It’s like, where are they?” he said. “What is their proposal?”

He stressed the importance of working with the oil companies and said spending time on other proposals would just sidetrack the state.

“It’s all platitudes,” Halcro said of his competitors’ gas line plans. “‘Alaska’s Gas on Alaska’s Terms?’ Of course!”

Halcro said the Division of Elections hasn’t yet certified him as a candidate but claimed he had the signatures he needed.

Knowles and Palin both promised quick action on a gas line.

“By January 31, every proposal should be on my desk,” said Knowles, who promised to pick one or more proposals and present a negotiated contract to lawmakers by the end of the regular session in May.

Palin said her administration could get a deal going “in a matter of months.” She also disputed the claim made by Murkowski’s administration that forcing the oil companies to sell gas to an independent pipeline company would require years of litigation.

“We can’t allow them not to honor their lease requirements,” she said.

According to port authority officials, the three oil companies have refused to sell them gas for their “all-Alaska” pipeline. Palin has called an “all-Alaska” line her preferred proposal.

Richard Schok, Flowline’s president, said the visit didn’t amount to a company endorsement of Knowles.

“He called me up to use the facility and I agreed,” he said.

He would have done it for anyone, he added.

Staff writer Stefan Milkowski can be reached at smilkowski@newsminer.com or 459-7577.