The governor this week abandoned hopes of signing a fiscal contract for a gas pipeline that Alaskans have sought for three decades, after he was resoundingly defeated in his party's gubernatorial primary election last month.
That loss, public dismay about poor maintenance of corroded pipelines at the Prudhoe Bay oil field and news of a criminal investigation into oil-industry influence peddling in the state legislature undermined an imminent pipeline deal.
Murkowski canceled plans for a third special session that would have started later this month and given lawmakers an opportunity to approve his deal with ConocoPhillips, BP Plc and Exxon Mobil Corp., said the governor's deputy press secretary, Will Vandergriff.
“We're continuing to negotiate and trying to bring about a resolution,” Vandergriff said. “We're trying to set it up, the best final product that we can to hand over to the next administration.”
Murkowski administration officials are still working on a document that would spell out tax, royalty, regulation and state investment terms for the proposed 3,600-mile pipeline, estimated to cost more than $20 billion, he said.
Many lawmakers said the governor's proposal makes too many concessions to the three oil producers. Those concessions would short-change the public financially and strip the state government of important powers to regulate the companies and control natural-gas development, according to critics.
Former Gov. Tony Knowles, who is trying to regain his old job, said if elected he would solicit competing proposals for a natural gas pipeline and make them subject to public and legislative review.
“Competition counts,” he said at a news conference. “I'm going to invite the gas line proposals from any entity that can get the project developed on Alaska's terms.”
Gubernatorial candidate Sarah Palin said she also wants to consider alternative proposals to build the pipeline, offering incentives only if needed to get the project done quickly.
“We're going to open competition. We're going to allow the free market to work,” Palin said at her own news conference. Any gas pipeline discussions should go on the backburner after last week's raids on several state lawmakers' offices by Federal Bureau of Investigation agents as part of a criminal probe into lawmakers' financial ties to oilfield services company VECO Corp., House Speaker John Harris said.
“Members believe a cooling off period is essential in order to distance the legislature from this perception of corruption,” Harris, a Republican from Valdez, wrote in a letter sent to Murkowski Tuesday.
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