To the surprise of some, and maybe the amusement of others, Gov. Sean Parnell announced on Tuesday that he’s not planning to introduce natural gas tax legislation to be considered in the upcoming legislative session. Currently, natural gas is taxed at roughly the same rate as is oil, but it’s only worth a fraction of what oil is.
Parnell says he’s not doing so because the companies that have the lease rights to the natural gas, and who would build the line that would carry the gas from the North Slope to tidewater, haven’t met all of the benchmarks he set out for them in his 2013 state of the state address.
Apparently, Parnell’s refusal to introduce gas taxes signals some sort of punishment. What kind of punishment, however, is unclear. What is clear is that the world is awash in natural gas, and other projects — potentially more profitable projects — await the companies.
Another thing that’s clear: Parnell’s announcement signals another delay in the decades-long dream of getting a large diameter natural gas pipeline.
Bill Walker, who is running as an independent candidate for governor, had a visceral reaction to Parnell’s statement. He said that Parnell is just playing into the hands of the producers. “It’s perfect for them,” Walker said. He has been an advocate for an LNG project for more than a quarter of a century, and has long advocated that the state get tough on the companies by either building the line itself or negotiating with the companies that are willing to do it.
“Parnell is trying to get tough. He’s trying to be a negotiator. But they’re just laughing at us,” Walker said. “They’re just on the floor rolling.” He said that the producers want the delay so that they can work on other projects and wait out Alaska as oil production declines, as the state’s coffers shrink, and as the state becomes increasingly desperate and increasingly willing to negotiate.
Walker ran for governor in 2010. He came in second place in the Republican primary, winning more than 33 percent of the vote on a campaign primarily advocating the construction of a gas pipeline project.
Since the 1970s, Alaska has tried to entice, and at various times demand, that the lease holders of the vast reserves of natural gas on the North Slope build a pipeline to get the gas to market.
The market for natural gas is a fickle one, however, say nothing of Alaska’s political climate. And throughout the years, every time it looked like it might actually begin to materialize, the market either crashes, or the political winds change, or a governor tries to flex his or her muscles and punish the companies, which happen to be the among the largest, most powerful, private companies in the world.
“It’s maddening,” Walker said, expressing a sentiment shared by many who have followed the long, illusive gas line story.
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