 September 11, 2003
"The Bush administration has identified its positions relative to the key issues of the natural gas pipeline, which is meaningful to Alaska and the conferees on the energy bill," Murkowski said. "They have come out in support of three of the four elements of the incentive package that are contained in the Senate version. Those are the loan guarantee, the enhanced oil recovery tax credit, and accelerated depreciation provisions. We also appreciate that they have reiterated their strong support for opening ANWR to oil and gas exploration." "There are two issues on which we differ with the White House, which are that they object to the prohibition of the over the top route, and to the commodity risk provision. Both the House and Senate versions prohibit the over the top route. "Regarding the commodity risk provision, which the administration continues to cast as a subsidy, I would make two points. First, if it is viewed as a subsidy, I think it is worthwhile to note just a few of the many other subsidies the federal government provides for energy. These include incentives in the current legislation, as well as existing federal law, for ethanol (at 56 cents a gallon), nuclear energy, deep water royalty relief, and coal bed methane, to name a few. The Tennessee Valley Authority and the many hydroelectric dams on the Columbia River are a few others. "Second, this is not a straight subsidy in the normal sense of the word. If the price of gas falls below $1.35, a tax credit kicks in. The maximum tax credit is 52 cents per million Btu of natural gas, less than the subsidy on a gallon of ethanol. Moreover, given the current price of natural gas, it is unlikely the tax credit would ever kick in." Murkowski said he is confident
the energy bill will reach its final form within the next few
weeks and will be signed by President Bush. "It is very
important that the new energy bill identify new sources of energy,
and that is just what ANWR and the North Slope natural gas pipeline
can do. Without these new sources of energy, the bill has a huge
void," Murkowski said.
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