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SCR 8: Encouraging the Regulatory Commission of Alaska expeditiously to complete its investigation of the Cook Inlet Gas Gathering System.

00                    SENATE CONCURRENT RESOLUTION NO. 8                                                                   
01 Encouraging the Regulatory Commission of Alaska expeditiously to complete its                                           
02 investigation of the Cook Inlet Gas Gathering System.                                                                   
03 BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                               
04       WHEREAS, in October 2004, the Regulatory Commission of Alaska received a                                        
05 complaint filed by Agrium U.S., Inc., a major buyer and consumer of natural gas and a                                   
06 producer and distributor of fertilizer and other agricultural products and services, against                            
07 Marathon Oil Company and Union Oil Company of California (Unocal) for operating for                                     
08 more than 30 years the Cook Inlet Gas Gathering System (CIGGS) in violation of the Alaska                               
09 Public Utilities Regulatory Act and the state's Pipeline Act; and                                                       
10       WHEREAS the Agrium complaint alleges three bases under which the commission                                     
11 should exercise jurisdiction to regulate CIGGS:  (1) as a public utility under the Alaska Public                        
12 Utilities Regulatory Act, (2) as a natural gas pipeline, as defined in AS 42.06.630(10), and (3)                        
13 as a pipeline operating for hire and as a common carrier, as defined in AS 42.06.630(16); and                           
14       WHEREAS the Agrium complaint was supported by two affidavits, one of which                                      
15 appends a gas exchange agreement and a Unocal invoice for exchange fees; and                                            
16       WHEREAS Marathon and Unocal have answered the complaint by asserting  that                                      
01 none of the bases identified by Agrium in the complaint is a valid basis under which the                                
02 commission must regulate CIGGS; and                                                                                     
03       WHEREAS, in December 2004, the commission determined that the Agrium                                            
04 complaint "has shown good cause to our satisfaction," in that the complaint posits several                              
05 plausible bases and, for each basis, has alleged facts which, if proven, would mandate that the                         
06 commission regulate the Cook Inlet Gas Gathering System or exempt it from regulation; and                               
07       WHEREAS the commission found that Agrium has met the regulatory  requirement                                    
08 in that the complainant had presented a sufficient quantum of evidence to support a finding                             
09 that "probable  cause" exists to investigate this matter further, and, for the purpose of opening                       
10 an investigation only, the commission further found that Agrium has presented sufficient                                
11 evidence to conclude that the CIGGS pipelines may be transporting natural gas for persons                               
12 other than CIGGS' owners for a fee, that CIGGS may be a gas transmission public utility, and                            
13 that it may be a natural gas pipeline, as defined in AS 42.06; and                                                      
14       WHEREAS the complaint is against two companies that operate a particular set of                                 
15 pipelines that are located wholly within the state and that transport gas exclusively in                                
16 intrastate commerce; and                                                                                                
17       WHEREAS the Regulatory Commission of Alaska regulates intrastate pipelines                                      
18 transporting gas under two separate chapters, AS 42.05, the Alaska Public Utilities Regulatory                          
19 Act, and AS 42.06, the Pipeline Act; and                                                                                
20       WHEREAS the complainant asks the commission to determine that this particular set                               
21 of pipelines falls under AS 42.05 or AS 42.06, or both; and                                                             
22       WHEREAS none of the parties has contested the commission's jurisdiction to make                                 
23 that determination, and the commission has affirmed that it has jurisdiction to determine                               
24 whether CIGGS falls within its regulatory purview;                                                                      
25       BE IT RESOLVED that the Alaska State Legislature encourages the Regulatory                                      
26 Commission of Alaska expeditiously to complete its investigation of the Cook Inlet Gas                                  
27 Gathering System so that Cook Inlet gas exploration initiatives may proceed with greater                                
28 certainty as to whether critical Cook Inlet natural gas transportation services are subject to                          
29 commission oversight as regulated services.                                                                             
30       A COPY of this resolution shall be sent to Kate Giard, Chair of the Regulatory                                  
31 Commission of Alaska.