Legislature(2009 - 2010)BARNES 124
02/03/2009 03:00 PM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| HCR2|| HCR3|| HCR4|| HCR5 | |
| HCR2 | |
| HCR3 | |
| HCR4 | |
| HCR5 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HCR 2 | TELECONFERENCED | |
| *+ | HCR 3 | TELECONFERENCED | |
| *+ | HCR 4 | TELECONFERENCED | |
| *+ | HCR 5 | TELECONFERENCED | |
HCR 2-IN-STATE GAS PIPELINE HCR 3-IN-STATE GAS PIPELINE HCR 4-IN-STATE GAS PIPELINE HCR 5-IN-STATE GAS PIPELINE 3:03:36 PM CO-CHAIR MILLETT announced that the order of business would be HOUSE CONCURRENT RESOLUTION NO. 2, Requesting the governor to provide energy security for all Alaskans by pursuing development of a natural gas bullet pipeline from the North Slope to the Cook Inlet region; and requesting the governor to identify and negotiate with one or more persons capable of producing natural gas from the Gubik area, and other areas on the North Slope if necessary, in sufficient quantities to support a bullet pipeline project; HOUSE CONCURRENT RESOLUTION NO. 3, Requesting the governor to provide energy security for all Alaskans by taking and encouraging all action that would support a natural gas bullet pipeline from the North Slope to the Cook Inlet region, including initiating any necessary negotiations to reopen the Agrium plant in Kenai; HOUSE CONCURRENT RESOLUTION NO. 4, Requesting the governor to provide energy security for Alaskans by taking and encouraging all action to support development of a natural gas bullet pipeline from the North Slope to the Cook Inlet region including advocating an increase in the amount of natural gas that may be exported under authority granted by the United States Department of Energy; and HOUSE CONCURRENT RESOLUTION NO. 5, Requesting the governor to provide energy security for all Alaskans by working on significant elements and components to support the timely construction of a natural gas bullet pipeline from the North Slope to the Cook Inlet region and to take necessary action to assist and facilitate the process for a private entity to make a final investment decision to commit to the pipeline before November 1, 2010. 3:03:49 PM CO-CHAIR EDGMON moved to hear as a block HCR 2, HCR 3, HCR 4, and HCR 5, and objected for discussion purposes. [Therefore, the committee heard the resolutions individually.] HCR 4-IN-STATE GAS PIPELINE CO-CHAIR MILLETT announced that the next order of business would be HOUSE CONCURRENT RESOLUTION NO. 4, Requesting the governor to provide energy security for Alaskans by taking and encouraging all action to support development of a natural gas bullet pipeline from the North Slope to the Cook Inlet region including advocating an increase in the amount of natural gas that may be exported under authority granted by the United States Department of Energy. 3:45:22 PM CO-CHAIR EDGMON moved to hear HCR 4 and objected for purposes of discussion. 3:45:38 PM REPRESENTATIVE RAMRAS reiterated that a 500 mcf per day gas pipeline requires an annual flow of 180 bcf to fill the pipe and allow for a minimum tariff. As discussed, all of the residential and light commercial gas usage in the Railbelt area would be approximately 60 bcf per year and the Agrium plant would also use 60 bcf per year. Since the annual capacity of the pipe is 180 bcf, there is a potential shortage of 60 bcf; therefore, HCR 4 encourages the governor and her administration to advocate for an increase in the amount of natural gas that may be exported under authority granted by the United States Department of Energy. Representative Ramras related that an official of the Federal Energy Regulatory Commission (FERC) conveyed that it is critical to Alaska that the U. S. Department of Energy be involved in securing gas for the pipeline; in addition, the official warned that export licenses are difficult to grant because the U.S. energy supply is sometimes robust and sometimes very lean. 3:48:16 PM REPRESENTATIVE RAMRAS emphasized that it is important for the administration to open a dialog for the purpose of expanding the capacity of Alaska's export license. Expanding the capacity of the license would lessen the tariffs for Alaskans. Furthermore, exported gas is subject to a production tax thus creating an important additional income stream for Alaska's general fund (GF). 3:49:24 PM REPRESENTATIVE PETERSEN asked whether studies have been done as to how the $4 billion construction cost of the bullet line would affect the price of natural gas. 3:49:48 PM REPRESENTATIVE RAMRAS reminded members that HCR 4 speaks to the export component of the bullet gas pipeline project. He further explained that gas coming from the Gubik area, or near the North Slope, is subject to negotiations between the Regulatory Commission of Alaska (RCA) and the supplier of gas. In this case, Cook Inlet is a depleted field and exploration and production costs there would be higher than in the Gubik area where gas is abundant. He stressed that the tariff cost to consumers will increase with a pipeline that is only partly full. He advised Representative Pedersen that the state is far better off to be early in applying for an expansion of the export license in order to reduce the tariff by filling the pipe. 3:51:34 PM REPRESENTATIVE TUCK asked for the amount of natural gas that was exported out of the Kenai peninsula at its height of production. 3:51:51 PM REPRESENTATIVE RAMRAS estimated 12 bcf per year and deferred the question to Mr. Thayer. 3:52:46 PM MR. THAYER offered to provide an estimate at a later date. 3:53:08 PM REPRESENTATIVE TUCK asked whether there will be a need to build another gas liquids plant or will the existing one be able to handle the full capacity of the bullet line. 3:53:25 PM REPRESENTATIVE RAMRAS assured the committee that there will not be a need to expand the LNG plant if the dialog with U.S. Department of Energy to expand the export license is not initiated right away. 3:54:09 PM REPRESENTATIVE TUCK further asked whether there will be a uniform price for gas, or differences in price for Agrium, exported gas, and in-state commercial and residential use: In short, one is subsidizing another. 3:54:39 PM REPRESENTATIVE RAMRAS said that has not been determined. The pipeline company has two businesses: negotiating for gas, selling it, and collecting a premium for the transmission of gas; and shipping gas for large consumers. He assumed that Agrium, because it would be consuming one-third of the gas in the bullet line, would receive pricing preferential to that of residential and commercial customers; however, Alaskan residential and commercial customers will still see relief from the present situation of paying the highest prices for natural gas in the U. S. 3:55:53 PM CO-CHAIR MILLETT opened public testimony. 3:56:06 PM MR. ABEGG expressed his frustration with the extension of the LNG license for ConocoPhillips Alaska, Inc., (Conoco) because in some ways the extension has precipitated the problem of limited gas supplies in Cook Inlet; however, Conoco's past investment has also provided opportunities for Alaska. He agreed that the gas pipeline does need a large industrial user and he supported extending the license for the LNG plant in Kenai for a limited number of years, based on in-state uses for the gas. He suggested that in-state opportunities for the use of gas such as development of the Susitna Dam, a possible cement industry, mining discoveries, and the coal-to-liquids plant, will come along. Mr. Abegg concluded that he was in favor of [expanding the export license] on a limited basis. 3:58:08 PM REPRESENTATIVE RAMRAS remarked: Wouldn't it be great if we didn't have a legal limitation of 500 million cubic feet a day and we could afford to have an export component and, a, pursue other value-added opportunities instead of being capped off like we are because of the AGIA legislation that was signed into law last year? 3:58:36 PM MR. ABEGG agreed, because there is a lot of potential gas along the bullet line, he said. Producers in the Nenana fields area are expecting reserves of two trillion cubic feet (tcf) to ten tcf, additionally gas reserves are anticipated in Yukon Flats, Stevens Village, North Slope, and Gubik field. Although 500 [mcf of gas] will make the line work, additional capacity is desirable. 3:59:25 PM REPRESENTATIVE RAMRAS asked: If we were successful in getting the export expansion of the license and that bumped us up right at 500 million cubic feet, and then the development of International Tower Hills ... came up, and if ... a gas-to-liquids [plant] opened up, and if the Mat-Su concrete plant opened up, and we were otherwise committed and we couldn't take our usage up above 500 million cubic feet because we had promised those rights away to a Canadian company, Transcanada, that would be a shame, wouldn't it? 4:00:00 PM MR. ABEGG said yes. 4:00:08 PM CO-CHAIR MILLETT closed public testimony. 4:00:28 PM CO-CHAIR EDGMON removed his objection and moved to report HCR 4 out of committee with individual recommendations and no attached fiscal note. Hearing no objections, it was so ordered. 4:00:48 PM The committee took an at-ease from 4:00 p.m. to 4:03 p.m. 4:03:02 PM
| Document Name | Date/Time | Subjects |
|---|---|---|
| Sponsor Stmt HCR 2 020309.pdf |
HENE 2/3/2009 3:00:00 PM |
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| Sponsor Stmt HCR 3 020309.pdf |
HENE 2/3/2009 3:00:00 PM |
|
| Sponsor Stmt HCR 4 020309.pdf |
HENE 2/3/2009 3:00:00 PM |
|
| Sponsor Stmt HCR 5 020309.pdf |
HENE 2/3/2009 3:00:00 PM |