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Friday, 21 November, 2008, 17:50 GMT | more >>

Alaskans snub gas tax



By Upstream staff 

Alaska voters shot down a proposal to tax oil companies $1 billion a year until they build a pipeline to take the largest reserve of natural gas in the US from the North Slope to the lower 48 states.

The tax would have been levied against the leaseholders of the North Slope's 35 trillion cubic feet of natural gas reserves until the gas starts flowing to market.

Opponents of the measure claimed the tax would have killed the $25 billion pipeline project, while supporters claimed the tax was the only way to force oil companies to build the pipeline.

With more than 98% of Alaskan precincts reporting, 66% of voters came out against the proposal.

Anchorage Democratic Congressman Representative Eric Croft told the Associated Press he believed the results showed Alaskans wanted to give upstream players the chance to commit to a gas pipeline.

"Everybody wants a gas line, but they want to see if we can do it without taking out a big hammer," Croft said. "That's fair enough, I trust the people. We'll give that a try. But if these people continue to hold the gas hostage, we may see it again."

The initiative proposed levying a 3-cent tax on every 1000 cubic feet of proven natural gas reserves in Prudhoe Bay and Point Thomson that North Slope producers did not extract and ship to market.

Once a pipeline is built, the tax would be repealed and a portion of the money collected from the oil companies would be refunded through credits.

Thursday, 09 November, 2006, 12:12 GMT  | last updated: Thursday, 09 November, 2006, 16:24 GMT

Taxing issue: Alaskan voters opted not to tax North Slope players over stranded gas
 

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