HomeMy WebLinkAboutRESOLUTION 1985-96F
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Suggested by: City Council
CITY OF KENAI
RESOLUTION N0. 85-96
A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, URGING
THE STATE OF ALASKA, THE FEDERAL GOVERNMENT, AND COOK INLET
REGION, INC. NOT TO PURSUE HIGHER ROYALTY GAS PAYMENTS FOR GAS
ALREADY CONSUMED BY THE USERS AS NOT IN THE BEST INTERESTS OF THE
STATE OR THE PUBLIC.
WHEREAS, Union Oil is the lessee of gas field rights in the Kenai
gas field, and
WHEREAS, the Lessors on these leases are the State of Alaska, the
Federal government and Cook Inlet Region, Inc., and
t WHEREAS, these Lessors have made demands for increased royalty
payments from Union Oil and the U. S. Department of the Interior has
e initially ruled that increased royalty payments are due, and
WHEREAS, the demands are based in general upon market prices at
. the time of production, and in some cases these demanded prices
- on which royalties would be based exceed the price received by
n Union Oil under its contract for supply of gas, and
WHEREAS, the imposition of these higher royalty payments would
' severely negatively impact the economy of the Kenai Peninsula
~,I Borough and south central Alaska due to the increase of cost in
the operation of the fertilizer plant owned by Union Oil located in
E the Nikiski area of the Kenai Peninsula Borough and would effect
~~ higher natural gas prices for avast majority of the population
in south central Alaska including the Kenai Peninsula, Anchorage,
- `~ and the Matanuska-Susitna Borough, and
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'.'~ WHEREAS, ENSTAR, the chief supplier of residential consumer
~ ~` natural gas in south central Alaska will likely pass through any
~~ increased costs for natural gas to industrial a<<d residential
~.`~ consumers thereby resulting in a negative economic impact on the
~'- constituents in south central Alaska.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF
KENAI, ALASKA, that said Council urges the State of Alaska not to
impose or request any increased royalty payments on its share of
the royalty gas, more especially for the the Nast production from
the Kenai gas fields by Union Oil. In addition, the City Council
of Kenai, Alaska opposes action by the United States Department
of the Interior and Cook Inlet Region, Inc., that would require
payment of a $100 million bond to cover any back royalty payments
and urges the Department of the Interior to hold such payment in
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abeyance pending final determination of this matter. Be it
further resolved that the Kenai City Council interprets the
actions by the United States Department of the Interior in this
--, matter as a subtle way of forcing the users of the gas from the
Kenai gas fields as paying the $100 million in back royalty
payments and therefore not in the State's best interest or ttie
constituents' best interest. BE it further resolved that copies
of this resolution shall be sent to Honorable William Sheffield,
Governor of the State of Alaska, Senators Frank Mu.rkowski and Ted
Stevens, Congressman Don Young, Don Hodel of the United States
Department of the Interior, Senators Paul Fischer, Jalmar
Kerttula, Edna DeVries and John Sackett and Representatives Mike
Navarre, Andre Marrou, Bette Cato and Mike Szymanski.
PASSED SY THE COUNCIL OF THE CITY OF KENAI, ALASKA this 2nd day
of October, 1985.
Tom Wagoner, Mayor
ATTEST:
Jsnet Whelan, City Clerk
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