Project manager says decision on oil taxes could impact gas line effort; senator disagrees

The decision Alaska voters make on an oil-tax referendum next month could have implications for a proposed liquefied natural gas project, the senior project manager said Tuesday, a point deemed a scare tactic by one state lawmaker.

In an interview, manager Steve Butt said the state and companies that hold leases have a shared interest in making money off the resource. He said if decisions are made that benefit one party at the expense of another, it compromises the project.

Butt said he didn't want to be an alarmist and declare the project would be killed if voters overturn the oil tax cut championed by Gov. Sean Parnell and approved by lawmakers last year. But he said every action taken either moves the gasline forward, by reducing risks and costs, or jeopardizes the viability of the long hoped-for project by increasing those factors.

If any of the parties "do something that hurts alignment, increases risk, increases costs, it hurts the project," he said.

Alignment is the buzzword for the state, TransCanada Corp., and the North Slope's three major players — BP, ConocoPhillips and ExxonMobil Corp. — being on the same page in pursuing the mega-project.

Others have made comments similar to Butt's as an argument for keeping in place the oil tax cut, insisting that a healthy oil industry, to help carry lease costs associated with producing gas, is important to the fortunes of the gas line project. Oil companies have been major contributors to the campaign that opposes the repeal of the tax cut.

But Sen. Bill Wielechowski, D-Anchorage, said he sees no connection between oil taxes and the gas line project. Wielechowski, a vocal critic of the current tax structure who supports the referendum, said the argument is being used as a threat so companies can continue to get tax breaks.

Parnell spokeswoman Sharon Leighow said by email that without a healthy oil industry, "it's hard to picture a scenario where a gas line is built."

She said liquefied natural gas is about long-term commercial agreements, "where a country commits to Alaska to provide a portion of its energy supply."

"Instability tells the international market that Alaska's actions may not be trusted in the long-term, which could hinder our ability to compete in a global market," Leighow said.