Alaska natural gas pipeline proposal gaining momentum

To ease investors' concerns, Governor Frank Murkowski of Alaska is proposing to make the state part owner of the pipeline. His administration is expected to announce a state proposal this week, prompting charges by Democrats that Murkowski was rushing the issue to help his daughter's Senate campaign.

Murkowski denied that politics was involved in the planned announcement. "I didn't create the timing," he told reporters this week.

The state's chief negotiator said he wanted a state proposal completed by the end of October so a final agreement with the private companies could be completed for legislative action in January.

In a rush of preelection business, Congress gave the Alaska pipeline fresh momentum by promising loan guarantees for 80 percent of the pipeline's cost, and gave developers other tax breaks as well as promises of less burdensome permitting requirements.

"After working for more than 20 years . . . we have finally taken steps to make the Alaska natural gas pipeline happen," Senator Ted Stevens, Republican of Alaska, said after Congress agreed to the incentive package.

The incentives were touted as a major breakthrough by Alaska's other senator, Lisa Murkowski, but quickly became fodder in her closely contested election race. Her opponent, former governor Tony Knowles, a Democrat, criticized her for failing to get a better incentive package, including gas price supports, to further ease pipeline developers' concerns.

Tax credits if Alaskan gas fell below a certain price had been sought by the Alaska senators and some of the potential pipeline investors, but were strongly opposed by the Bush administration as being unfair to gas producers in the lower 48 states.

The companies that own the Alaska gas -- ExxonMobil Corp., ConocoPhillips, and BP PLC -- have praised Congress's action, but remain reluctant to push headlong into a $20 billion investment. They are seeking more advantages and security from the state to mitigate their risk in what has been described as the largest private construction project ever in North America. If given the go-ahead, the pipeline would take 10 years to plan and construct.