The major oil companies have never wavered from their statements that the state needs to make stronger commitments on future tax rates before a gas pipeline is going to be built.
The tax question is one of the uncertainties facing the project. An even bigger one is that shale gas developments in the Lower 48 may provide lots of natural gas at a cheaper rate than any Alaska project could match.
The Parnell administration and most legislators have declined to focus on long-term taxes before the election, suggesting that it would be better to do so next year when the full results of the open seasons may be clear.
Part of the reluctance stems from the near certainty that fiscal certainty is not going to be universally popular in Alaska.
And in some quarters, a new round of negotiations between the state and the oil companies will lead to questions about whether the Alaska Gasline Inducement Act process backed by Gov. Sean Parnell will work.
In any event, Jim Mulva, the chief executive of ConocoPhillips, tells the Financial Times that his company is going to have to reassess the economics of the pipeline project to Canada.
"The decision will be based on the fiscal certainties provided by Alaska and how competitive the gas will be against that being produced in the Lower 48 states through shale and other unconventional extraction methods," the newspaper said.
The newspaper said there is so much gas now that Conoco has shut down production in parts of the Lower 48, awaiting higher prices.
“We’d rather keep it in the ground for when it will have a greater financial impact,” he said.
No comments:
Post a Comment