I guess I'd be surprised if the Alaska gas pipeline is completed within 10 years. It's a very expensive and ambitious project. Leaving the environmental and political obstacles aside for the moment, it's a very high risk investment for an oil company to make.
It only makes sense to do if the company can recoup its investment in building it, but completion of it will flood the market with gas, dropping the price per mcf. That's why there has been discussion about setting a "floor" price for the gas, so that if gas drops below that level, the oil company will get a tax credit equal to the difference.
It only makes sense to do if the company can recoup its investment in building it, but completion of it will flood the market with gas, dropping the price per mcf. That's why there has been discussion about setting a "floor" price for the gas, so that if gas drops below that level, the oil company will get a tax credit equal to the difference.I have realized the "flood the market" potential, I'm unfamiliar with the floor price concept. Is that part of either version of the Energy Bills.
Does it apply only to the producers selling through the Alaska line or across the board?