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Senators Introduce Bill to Encourage Development of New Gas Technologies

FOR IMMEDIATE RELEASE:  January 20, 2010


(ANCHORAGE) – Senator Lesil McGuire (R-Anchorage), chair of the Senate Energy Committee and co-chair of the Senate Resources Committee, and Senator Bill Wielechowski (D-Anchorage), co-chair of the Senate Resources Committee introduced Senate Bill 228 to provide incentives for the in-state use of natural gas in a gas-to-liquids (GTL) plant or other petrochemical process.

“While a natural gas pipeline will provide the next generation of revenues to the state, we must also consider the role refined natural gas products can play in creating thousands of new jobs and a vibrant Alaskan economy for the state,” said Senator Wielechowski.  “New gas-to-liquids technologies can open huge opportunities for Alaska.”

In a gas-to-liquid process, natural gas is converted to a synthetic crude oil or ultra-clean diesel fuel. The resulting product can then be sold for a significant premium over basic natural gas.

When the legislature passed the ACES severance tax revision in 2007, it also capped taxes for gas used in state. This provision was enacted to provide preferential treatment for the use of Alaska’s gas by Alaskans, and to limit the impact of the tax increase on Alaskan families and businesses.

SB 228 would add gas used in a GTL or petrochemical process to the definition of gas “used in state.” Currently that definition is limited to gas used for heat or power generation.

“Gas-to-liquids technology offers exciting opportunities for Alaska, especially given our proximity to the West Coast and Asian markets,” said Senator McGuire.  “The market for GTL products is growing and a GTL plant in Alaska could provide hundreds of high paying, year round jobs for Alaskans as well as the clean diesel we need in-state to meet new EPA requirements.”

The Agrium facility on the Kenai Peninsula is an example of natural gas-based industrial development. When it was in operation, the facility converted natural gas to fertilizer and was one of Alaska’s leading exporters. In 2002, Agrium employed approximately 300 Alaskans directly and 700 more indirectly. Agrium was also one of the largest property tax-payers in the Kenai Peninsula Borough until the facility closed in 2007.

SB 228 also renews a corporate income tax credit for industrial facilities, which will provide incentives for the construction of a GTL plant in Alaska.

 

 

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