Major energy companies are declining to participate in building a natural gas pipeline from Alaska's North Slope, saying legislation meant to lure them makes too many demands and offers too few assurances. Exxon Mobil Corp., BP PLC and ConocoPhillips have told the state Senate and House finance committees the Alaska Gasoline Inducement Act will not generate competitive bids to build a pipeline, according to AP. «Unless (the act) is adjusted, ConocoPhillips would be unable to make an ... application,» said Brian Wenzel, vice president of ConocoPhillips' North Slope gas development. Under the act, producers and independent pipeline companies can vie for the right to build a pipeline that lawmakers hope will ship trillions of cubic feet of natural gas to market.The administration of Gov. Sarah Palin also believes the act will encourage pipeline expansion and further development on the North Slope. The act requires that companies bidding to build the pipeline propose a route, construction timetable and deadline for getting commitments to ship gas in the line, all as part of their license application. Incomplete proposals could be rejected by the Palin administration. Producers say that structure is too restrictive. They want broader objectives. ConocoPhillips and Exxon Mobil Corp. told the House Finance Committee on Wednesday that the act is overly stringent. Exxon Mobil's Marty Massey, who oversees commercialization of the Irving, Texas, company's Alaska gas resources, challenged the intended spirit of the act. «AGIA, as it's written today, does not encourage market-based competition due to its prescriptive nature,» he said «We have consistently advised the Legislature and the administration that AGIA in its current form, will not encourage competitive proposals and will not result in a commercially viable project.» The act also provides tax breaks for 10 years to the first companies pledging to ship gas in the pipeline, but companies also want other considerations in areas such as royalties, property taxes and income tax. Producers have also long said they need the state to provide assurances that resource production costs, such as royalties and taxes, would remain constant and predictable. -- SPA
