Oil giants accused over Alaskan gas

BP and Exxon Mobil are being sued by a government body in Alaska over allegations the energy giants are trying to drive up heating and power costs by manipulating the market in the natural resources-rich state.

The Alaska Gasline Port Authority claimsthe world's two largest oil companies have choked the supply of the state's vast reserve of natural gas to other parts of the US. It also alleges the companies are colluding in their attempts to restrict access to Alaska's natural gas.

The allegations, denied by both companies, come at a sensitive time for the US energy market. The soaring price of oil this summer provoked outrage among consumers and led to hearings on Capitol Hill over whether energy companies including Exxon, BP and Shell were profiteering. The price of oil has now fallen but many Americans are bracing themselves for the long winter.

The lawsuit is the latest development in an epic battle over the natural gas within Alaska's oilfield and its North Slope region. The 37 trillion cubic feet of gas will satisfy two years of US demand but no infrastructure is in place to pipe it to other parts of the country. The Alaska Gasline Port Authority was created in 1999 to build a gas pipeline. It wants the pipe to go from the North Slope to Valdez in southern Alaska, where it would be liquefied and loaded on to tankers. BP and Exxonwant a pipeline but are pressing for a route through Canada, over which they would have more control.

In the lawsuit, the port authority said BP's refusal to agree to ship its natural gas and Exxon's failure to develop its huge fields amount to "warehousing" an urgently needed resource to drive up prices. A spokesman for BP denied the allegation and said: "We are working as fast as we can to get a clear and durable fiscal contract with the state of Alaska so that this natural gas project can move forward."