Parnell Waiting for Answers from Oil CEOs

Governor Parnell says he has not yet gotten answers from the CEO’s of Exxon, BP and ConocoPhillips who met with him in Anchorage earlier this month.   He revealed at his State of the State Speech last night that he had called each of them within the previous twenty four hours to tell them he expected them to make decisions on issues that were left hanging after their face-to-face meeting.

Meeting with reporters this morning,  Parnell says there has been no agreement among the companies – although he is aware that company and state employees are meeting to work out details of his call for formulation of a natural gas development project – and settlement of Point Thomson litigation.

I think Alaskans are tired of waiting.   I’m tired of waiting.   But I also will give them credit in the sense that I know from hearing from my people at the Department of Natural Resources as well as the companies’ executives, that these teams are working very diligently to try to pull these companies in alignment on a gas project.

Parnell insists that any new development needs to be done within the framework of AGIA – the Alaska Gas Inducement Act.  He says the AG IA legal structure protects the state’s interests if a project were to develop.  He does recognize that all three companies initially rejected participation in AGIA and that Conoco-Philips and B-P have closed their competing project.  He was asked what he was hearing from those companies that gives him encouragement that they have changed their minds.

I think that’s a better question to ask them.   But I will tell you that the state of Alaska views the protections of the Alaska Gasline Inducement Act as significant.  And Exxon thought them workable enough to come alongside TransCanada.  And if the largest oil company and gas company in the world thinks they can work with the framework – they’re not under the framework at this point – but thinks they can work with it,  I don’t see a reason why the other two companies might not as well.

Parnell also said that markets have changed from the time the original offerings made to potential AGIA shippers.   He says the original offers were focused on delivering gas to North American markets.   But the focus now is on exporting Liquefied Natural Gas to the Pacific Rim.

Time and economics appear  to have moved,  which is why I have asked these companies to take a serious, hard look at LNG.

Parnell said this morning that the most important element to bringing the companies into alignment over any gas project is resolution of the litigation at Point Thomson.   That was the first element he called for during last night’s speech.  He says the gas from Point Thomson fields is essential to filling the pipeline.

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