Legislature(2011 - 2012)HOUSE FINANCE 519
03/21/2012 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB359 | |
| HB361 | |
| HB9 | |
| HB296 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 296 | TELECONFERENCED | |
| + | HB 359 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 361 | TELECONFERENCED | |
| += | HB 9 | TELECONFERENCED | |
HOUSE BILL NO. 296
"An Act relating to service of process on prisoners;
relating to the crime of escape; relating to the
definition of 'correctional facility'; amending Rule
4, Alaska Rules of Civil Procedure; and providing for
an effective date."
HB 296 was SCHEDULED but not HEARD.
4:47:36 PM
RECESSED
6:54:36 PM
RECONVENED
Co-Chair Stoltze apologized for the teleconference
connection difficulties that were making it hard for people
to call into the meeting.
RICHARD ODSATHER, ODSATHER INTERNATIONAL MARKETING,
FAIRBANKS (via teleconference), voiced his opposition to
the bill. He remarked that he did not understand why the
Joint Pipeline Office had not been used in making
decisions. He believed the HB 9 proposals were
counterproductive to Alaska and that the entire bill should
be killed. The major problem in Fairbanks was that one of
the spur lines extended 39 miles through some of the
state's worst soils and terminated at the university
experimental farm fields. It fell far short of the refinery
located 20 miles further south in North Pole. He said one
project would cost over $200 million and wondered who would
pay for it. The new project wanted to export gas, which was
never stated in the public hearings. Large methane tankers
could not operate in the upper Cook Inlet basin because of
water depth, steerage, and six months of ice flow. New
docks would have to be built a mile offshore to accommodate
the tankers. The public had been told that the off-takes in
Nenana and the Yukon River would have to be done after the
open season; Nenana had been told it was supposed to get a
methane and propane off-take, but it had not happened.
There were many things in the bill that need to be taken
care of. He was concerned about tariff prices.
MERRICK PEIRCE, BOARD MEMBER, ALASKA GASLINE PORT
AUTHORITY, NORTH POLE (via teleconference), did not support
the bill. He offered a shareholder and public perspective.
He stressed that hundreds of millions of dollars had been
wasted on a project that would not be built. The bill was
good for Exxon, given that there was an estimated 250
trillion feet of gas worth trillions in the Asian market.
He stated that Exxon wanted to grab the resources cheaply
then sit on them until the value increased; it had been
warehousing the gas in the North Slope and Pt. Thompson for
forty years. He believed that allowing Alaska gas to enter
the world market too early threatened Exxon profits. The
passage of HB 9 allowed for the warehousing of Alaska gas
to continue by diverting public attention, time, and
resources away from a credible project. He opined that
Alaska was afraid to act and was allowing others make
decisions about Alaska's future. He believed that HB 9
offered the wrong route, crossed the entire state with only
two take-out points, did not provide Alaskans with
affordable energy, did not provide gas for the military
bases, and sought double digit return in equity which would
cost Alaskans $420 million per year. He did not understand
what rational policy maker would want to see $420 million
transferred out of the Alaska economy to the owners of the
project. He pointed out that the projects were opposed by
the city of Valdez, North Pole City Council, Fairbanks
North Star Borough Assembly, and the Alaska Municipal
League. He cautioned that Alaska was competing with five
projects in the lower 48, Canada, Russia and Australia. He
stressed that the focus must be on a large gasline to
Valdez.
7:03:56 PM
Representative Wilson asked about the status and future
plan for the All Alaskan project. Mr. Pierce replied that
he could not publically expose who the entity was talking
with for confidentiality restrictions. He declared that it
was hard to move forward when the North Slope developers
did not want to sell the gas; it was hard to move to the
next step without the commitment of the gas.
Representative Wilson wondered whether he would be against
the project if the gas reached Fairbanks sooner rather than
later. Mr. Pierce remarked that the Wood MacKenzie research
showed a $419 billion benefit for the Alaska LNG project
with a large gasline. He stated that Alaska should be
pursuing a large gasline project to assure Alaskans get the
most affordable energy. Interior residents would see an 80
percent reduction with gas from the large pipeline rather
than a bullet line. He pointed out that time and resources
should not be spent on a project that was not economical.
7:05:55 PM
Representative Neuman asked if Mr. Pierce was proposing and
supporting spending the Permanent Fund Dividend to build a
gas pipeline.
Mr. Pierce replied that the Alaska Permanent Fund
Corporation had $41.5 billion in the different state
savings accounts; without ever touching the Permanent Fund
Dividend it could come up with the equity portion of the
project and the state take control of the project and not
wait for others who had a conflict of interest. The state
had the resources, money, and talent to build the pipeline.
Once the state has 51 percent equity position, the state
could invite partners into the project, who he believed
would come on board immediately.
LARRY WOOD, SELF, PALMER (via teleconference), testified in
opposition to the bill. In 2002 Alaska voted to build the
pipeline, but every legislature and governor had ignored
the will of the people. He pointed out that $14 million had
been spent so far and nothing had been done; there had been
no permits issued and the route has not been firmed up. The
All Alaska Natural Gas Pipeline brought the benefit of the
pipeline to Fairbanks, Ft. Greely, down the Richardson
Highway, and a spur across the Dalton Highway. He wondered
what the legislative body did not understand about value
added resource development. Alaskans voted for the All
Alaska Natural Gas Pipeline that existed in statute under
Title 41, Section 41 to keep the gas in-state for the
interior and long-term benefit of Alaska. Japan was
interested in the gas. A Japanese delegation was in town,
but the public was not privy to anything that was said to
the governor or the legislature. There had been no public
discussion from the legislature. He could not understand
why the public was being ignored in the discussion. He
wondered where the outrage was when the president of Conoco
pulled out of the Denali project because they had intended
to warehouse Alaska's gas all along; he opined that the
project had been fostered on the state and it was done in a
way to influence public decision.
7:12:28 PM
JIM SYKES, SELF, PALMER (via teleconference), testified
strongly against the bill. He was troubled by many things
related to the legislation. The Alaska Gasline Development
Corporation would have almost unlimited authority to
determine ownership, operation, and financing. The agency
would be exempt from Regulatory Commission of Alaska
regulation which could result in forcing Alaskans to pay
the highest price for gas in the world. Although the gas
would be Alaskan, the consumers would be forced to repay
for the cost of the line while the owner company would be
assured of long-term profit regardless of the cost of the
line. He found it to be troubling. The current route along
the Parks Highway would bypass three military bases. The
spur lines for Fairbanks the bases and the Richardson
Highway had not been included in the costs. It was unclear
if there would be an export component and there was an
underestimation of what it would be; without export the
line would only be half full. The tariff would be so
excessive it would be uneconomical. The Department of
Natural Resources estimated that there was as much gas in
Cook Inlet as there had been taken out. He sympathized with
the desire to get North Slope gas, but opined that HB 9
needed to be on backburner while other options were
seriously considered. There had been talk about the larger
line. He felt that HB 9 was the worst of all the gasline
options and was a loser.
7:16:10 PM
Representative Mike Hawker recapped the Regulatory
Commission of Alaska amendment adopted earlier in the day.
The sponsors of the legislation brought forth the amendment
that provided a regulatory structure for the pipeline in
the Alaska that was specifically authorized by statute to
operate as contact carriers. That regulatory authority was
vested in the authority of the RCA and fulfilled the
discussion in the House Resources committee. He stated that
the House Finance Committee passed the amendment without
objections.
Representative Gara interjected that he and Representative
Guttenberg had tried to amend the RCA Amendment and
believed the regulations could have been stronger. He felt
that the RCA should have the power to ensure that the
tariff rates were just and reasonable. His amendment had
not passed. He relayed that the committee's support for the
bill was not unanimous.
7:18:19 PM
MICHAEL DUKES, ASSEMBLY MEMBER, FAIRBANKS NORTH STAR
BOROUGH, NORTH POLE (via teleconference), voiced his
opposition to the bill for several reasons. He believed it
contradicted the will of the people as stated by previous
testifiers. The fact that the people voted to incorporate
and create an agency that would develop their own pipeline
had been ignored by administrations and legislators. He
believed it was insulting to the people of Alaska. The
economics of the proposed line would have the people in
Fairbanks paying more than Anchorage. The line would be
passing outside Dunbar and although Representative Wilson
stated there could be an amendment to pass the gasline into
Fairbanks, the problem was that the tariff cost could be
close to the cost of current heating oil, which would not
help. There had to be a difference in the cost between
natural gas and heating oil. He stated that for a mass
conversion to take place in a market for natural gas there
had to be a substantive difference between the cost of
natural gas and the cost of heating oil or people would not
spend the thousands of dollars to convert to gas. There
will be no benefits in air quality or space heating in the
homes. He opined that the proposal completely ignored the
military bases even though they have been using those
numbers to justify the pipeline. He felt that there were
many things wrong with HB 9 and that the people in
Fairbanks did not really support it. He stated that the
proposed pipeline in HB 9 would not solve the problem.
[Lost call for short period]. He believed that the problem
was a failure in leadership with the administration and
legislature to put forth a line that would benefit the
entire state. He stressed that HB 9 needed to be defeated.
Japan was currently looking for 30 million metric tons of
gas; therefore it was the time to strike to bring needed
revenue into the state. He urged the defeat of HB 9.
7:23:13 PM
Representative Guttenberg pointed out that Mr. Dukes was
not speaking for the borough assembly, but for himself. Mr.
Dukes replied that the borough assembly passed a resolution
supporting an All Alaska Gas Pipeline along with the City
of Valdez and the Alaska Municipal League.
ALAN LEMASTER, SELF, GAKONA (via teleconference), testified
against the bill. He owned a small business in Copper
Valley and paid extremely high energy rates, which would
not get better with the passage of HB 9. He urged the
committee to put aside his or her own limited vision for
their districts, personal ambitions, and legacy hopes, and
instead to support what was best for all the people of
Alaska. He asked the committee to widen its vision to
include the future of the children in Alaska. He felt that
HB 9 was not the best plan on the table to bring low cost
energy to the greatest number of Alaskans. The inability
for Alaska's judiciary, the RCA, and the citizens of the
state to challenge and object to any and all of the
provisions within the bill exhibited a lack of transparency
and was not acceptable. He stated that it was technically
legal to repeal a ballot measure but, he advised that the
ballot represented the will of the people and that
repealing it (i.e. Section 29 of the bill) would not be
popular with the people. He remarked that any project
considered must include producing a pipeline to tidewater
for export to ports outside the state of Alaska; the bullet
line did not meet the directive on several levels. Valdez
was the only port in the state that could handle the large
ships necessary for such a project. He pointed to public
concern that the process was superfluous, resulting in a
great deal of effort, a lot of money spent, for very little
or no gain. He urged denying HB 9 until it was compatible
with all the provisions of the many bills and regulations
that preceded it.
7:28:11 PM
Co-Chair Stoltze once again explained the teleconference
difficulties and apologized to the people who might be
waiting to speak.
PARK KRINER, SELF, GLENNALLEN (via teleconference), voiced
opposition to the bill. After 41 years of living and having
a business in the Alaska he believed that the Valdez route
was financially, socially, employment percent wise,
business wise, and morally the right way to go. He believed
the health and future of Alaska depended on the decisions
made. He stressed the extremely large energy costs to his
business over the years. He believed there would be
substantial savings with propane and natural gas. With the
savings he would hire, build, and expand his business. He
remarked on the advantages of an All Alaska Gas Pipeline.
He recommended ending HB 9 and promoted the proposals of
knowledgeable experts, like Representative Gara. He
recommended that people read Representative Gara's
"sensible" amendment recommendation.
Representative Gara thanked him for his support.
7:33:38 PM
RANDY WAGNER, SELF, GLENNALLEN (via teleconference),
testified against the bill. He agreed with the amendments
of Representative Gara and the former teleconference
speakers. He supported the pipeline to send the gas down to
Valdez. He believed that Alaska and the U.S. could profit
from selling the gas to Japan. He indicated that there was
an economic war with China; the Japanese could buy Chinese
gas, but that would result in a loss of money for Alaska.
7:36:20 PM
AT EASE
7:54:31 PM
RECONVENED
HB 9 was HEARD and HELD in Committee for further
consideration.