Anchorage Daily News

JUNEAU -- U.S. Sen. Lisa Murkowski said Tuesday that time is running short on Alaska to get a natural gas line project moving -- while competing natural gas projects are gaining ground.

She wouldn't criticize Gov. Sarah Palin's Alaska Gasline Inducement Act, but the tone of urgency in her annual speech to the Legislature was clear.

"We are slipping and cannot afford to slip any further," she told members of the House and the Senate. "Our competitors are moving ahead. Our oil production is dropping. Steel and construction prices just climb higher every year."

Getting a gas line was the thrust of Murkowski's sweeping message to the Legislature, but she also touched on health care, education, and the Arctic.

The former state representative spoke in familiar tones, often referring to lawmakers by their first names, and was clearly versed on what priorities the Legislature faces this session.

A gas line topped Murkowski's list, and will likely be addressed in a special session after the Legislature adjourns from a 90-day session April 13.

So far, the state believes it may have found the company that can build a pipeline to ship 35 trillion cubic feet of North Slope reserves into Midwest markets.

TransCanada was the only application the state says has complied to date with the regulations set forth under AGIA. The Legislature continues to wait to see whether the Palin administration will recommend the company for a state license.

If the Legislature gets Palin's proposal -- she's not offered any timeline -- it has 60 days to approve or reject it.

Houston-based Conoco Phillips, however, says it's got a plan outside the state's bid requirements if the state would just negotiate what it calls fiscal certainty.

This sets long-term tax and royalty terms for the North Slope leaseholders who have wanted these terms negotiated before a pipeline license gets awarded.

This approach failed under the senator's father, former Gov. Frank Murkowski. Last month, U.S. Sen. Ted Stevens stressed the need to establish the fiscal terms.

Conoco Phillips still has plans to begin more than $40 million worth of field work this summer for its plan.

Murkowski told lawmakers the competition is strong and in varied locations, stretching from projects in Texas and Appalachian states to those close to U.S. borders in Mexico and Canada.

She placed equal onus on the state; North Slope leaseholders Conoco Phillips, Exxon Mobil and BP; pipeline companies, and the federal government to keep things moving.

After her address, Murkowski said she believes progress is being made, even as competing projects seem to be emerging, but still wants to see substantive work being done this summer.

"I think we clearly have a track that is moving forward," Murkowski said. "I appreciate that. I recognize the value of the AGIA process.

"But, clearly Conoco is on its own track. Is it wrong to have a duel track? In my opinion, anything that will get us a gas line sooner is worthwhile."

Murkowski also hit on several other forefront issues, including:

• Health care: Murkowski expressed concern about caring for the senior citizens, the fastest growing population.

She said Medicare needs a payment formula, " ... so that physicians can afford to take on new clients and not drop existing patients. It is unacceptable that many of our seniors cannot find a doctor who will see Medicare patients."

• Education: Murkowski praised the Legislature for passing an education funding package; it is estimated to inject an extra $180 million into education over the next five years. She stressed its potential value in beefing up the state's work force.

"Alaska has one of the highest unemployment rates in the nation," she said, "yet I am constantly hearing from employers that they cannot find the workers that they need."

• The Arctic: Murkowski implored lawmakers to keep an eye on Arctic development, whether it's environmental protection or resource development.

"The United States is an Arctic nation because of Alaska," she said. "We shouldn't let the federal government even think about Arctic issues without consulting Alaska."

Murkowski said the state has to do its part if it's to be a key player nationally, whether it's funding education or forcing its way to the table of global and national debates.

"She's right," said House Rules Chairman John Coghill, R-North Pole. "We have to take a leadership position on some of these issues. That's up to us."

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