Wednesday, October 27, 2004

I'm a big Fox critic (there are so many more people scrutinizing the New York Times than Fox) but credit where credit is due. This is an important story.

In a rush of pre-election 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," Sen. Ted Stevens, R-Alaska, said after Congress agreed to the incentive package.

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

Tax credits if Alaska 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' 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.

Two parties competing to see which one can offer more subsidies. The fossil fuel companies are nervous about the risks - but politicians are pushing the project. Limits on corporate welfare are imposed more by concerns of competing corporations than concern for the taxpayer.

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