Legislature(2011 - 2012)HOUSE FINANCE 519
03/22/2012 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB158 | |
| HB9 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 158 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 9 | TELECONFERENCED | |
HOUSE BILL NO. 9
"An Act requiring the Joint In-State Gasline
Development Team to report to the legislature
recommended changes to state law that are required to
enable or facilitate the design, financing, and
construction of an in-state natural gas pipeline so
that the in- state natural gas pipeline is operational
before 2016; and providing for an effective date."
Co-Chair Stoltze asked for a brief recap of the
legislation.
REPRESENTATIVE MIKE HAWKER, CO-SPONSOR, briefly explained
the bill. He relayed that Representative Mike Chenault was
the prime sponsor of the legislation. The bill would
advance the state's ability to construct a gasline from the
North Slope to tidewater. He stated that the ability was a
long held dream of Alaskans. The bill elaborated on HB 369,
legislation that had passed unanimously two years earlier
that directed AHFC to establish a working group with the
goal of developing a pipeline proposal. The plan had been
completed July 1, 2011 in accordance with the best
management practices of the Institute for Project Analysis.
He detailed that the plan informed the legislature how it
could facilitate monetizing Alaska's gas with a pipeline
from the North Slope to tidewater and make gas available to
Alaskans at the lowest possible cost. He furthered that the
plan identified numerous empowerments needed for a state
agency to move the project forward; HB 9 was an empowerment
bill that gave the Alaska Gasline Development Corporation
(AGDC) the necessary tools to advance a specific pipeline
project forward. He elaborated that the specific pipeline
project was the only pipeline allowed under the previously
passed Alaska Gasline Inducement Act (AGIA) law, which
granted an exclusive license to the TransCanada Corporation
(and its partner ExxonMobil) for the monetization of a
pipeline that would handle all of the North Slope gas (with
the exception of 500,000 cubic feet per day) and had any
state involvement. He stated that the bill had been
developed respectful of the constraints under AGIA. He
relayed that the sponsor believed that a larger project
that monetized a greater amount of Alaska's gas would be in
the state's greater good; however, a larger line was
prohibited under AGIA.
Representative Hawker addressed that HB 9 additionally
empowered AGDC to act as the state's representative in
negotiations with TransCanada and ExxonMobil in hopes of
bringing a larger project to fruition; however, if a larger
project was not feasible, the bill provided AGDC with the
necessary tools to move forward to an open season within
the constraints of AGIA to determine whether there was a
market of willing buyers and sellers of Alaska's gas. He
emphasized that without the bill the state did not have a
seat at the table with the producers and would not have a
project moving forward. He concluded that HB 9 was about
taking steps to move a project forward to get Alaska's
North Slope gas to instate consumers at the least possible
cost. He pointed to the online legislative information
system (BASIS) that contained an outline of the regulatory
authority. He relayed that an amendment had been passed the
previous day that created the full framework for the
regulation of a contract carriage pipeline in the state,
which was critical to obtaining financing and empowering
AGDC to bring a project to fruition.
5:18:55 PM
JEFF COOK, REGIONAL DIRECTOR, EXTERNAL AFFAIRS, FLINT HILLS
RESOURCES, FAIRBANKS (via teleconference), spoke in support
of the legislation. He relayed that the Flint Hills and
other nearby refineries at North Pole and in Valdez were
the only refineries in the country that did not have
natural gas; the company had to refine oil to energize its
refinery resulting in expensive energy costs. He relayed
that the expense put the company at a competitive
disadvantage; the situation was exacerbated by the high oil
prices. The company was working with others on an LNG
trucking project to bring cheaper and cleaner energy from
its refinery to Fairbanks sooner; however, the project had
always been viewed as a bridge project to a gas pipeline
that would go to Fairbanks. He urged the committee to move
forward with the bill and to make sure that affordable gas
was made available to Interior residents and businesses. He
opined that something needed to be done about the expensive
heating costs facing families. He referred to a quote "it's
better to do something that may not be perfect than to do
nothing and do so flawlessly."
Representative Wilson asked whether people were moving out
of Fairbanks due to high energy costs. Mr. Cook replied in
the affirmative. He told a story about a friend with a used
car business who had reported that many people were selling
their cars and moving. His house had used a high amount of
fuel during the month of February when he had been out of
town. He opined that people could not continue to pay the
high costs.
5:23:12 PM
BILL WALKER, OWNER, WALKER LEVESQUE, LLC, ANCHORAGE, spoke
against the bill. He listed several of his clients
including the Alaska Gasline Port Authority, City of
Valdez, and other. He testified that HB 9 was not the
problem or the solution. He believed control of the
decision making process for bringing oil off of the North
Slope had been lost. The world had changed since the AGIA
contract had been granted. He was frustrated about talk
related to a change in the oil and gas tax structure, but
people were leaving the state because the cost of energy
was too high; the state needed to focus on providing
cheaper energy to its residents through a large volume
gasline. He relayed that his background was in building. He
believed that credence was given to the faulty footing and
that the state needed to move away from AGIA; without
action the state would be destined to argue about a series
of bad options. He believed it was possible to do much
better than HB 9. He stressed that the state should work to
peel away layers of confidentiality, not to increase it.
Mr. Walker opined that the bill did not bring economical
gas to Alaskans or put any more oil in the pipeline. He
pointed to an analysis that showed a large line would
reduce the cost of energy in Fairbanks by 80 percent. He
stressed that the bill should not be used as the answer and
that it would not result in a gas pipeline. He believed the
bill took the state's eyes off of the ball, which should be
a large gasline for cheap energy and increased revenues to
the state. He pointed to a Wood MacKenzie estimate of as
much as $419 billion to Alaska for export to Asia. He
emphasized the world market was filling up by projects with
lesser economics. He stressed the importance of fixing the
problem; the state needed to take control of its future.
Mr. Walker explained why he believed the problem would not
be solved under AGIA; it was not in TransCanada's best
interest to take a gasline to tidewater. TransCanada and
Foothills Pipelines were co-owners of the license and had
tried to stop an export license for Yukon Pacific
Corporation. He stressed that the companies wanted gas to
go to Canada and not to tidewater. The Port Authority
partners had tried without success to get a letter from
TransCanada stating that it would build a line to
tidewater. He opined that $60 million in the current
operating budget was being spent to study a line into
Canada; he wondered why. He discussed national terminals
that had become export terminals as a result of shale gas
and others in British Columbia that were export terminals
of LNG to Asia. He emphasized that Alaska was the only
place that had not changed and that a gasline would not
result from the current structure. He asked "how do we get
out of AGIA?" He pointed to an abandonment clause in the
contract that would allow either side to claim that it was
not working. He opined that the state should take the
action. He surmised that if the state did not get out there
would continue to be an open season every two years and
that all of the open seasons were focused on a market with
100-plus years of gas at $2.00 or $3.00.
Mr. Walker accentuated that the problem needed to be fixed;
a mistake had not been made, but the world had changed. He
highlighted that the economics were there and that the
focus should be on the Asian market and on the upstream
side. He listed various reasons that the response in the
market place had been rewarding. A relevant question was
whether Alaska had time to get into the market; if the
state waited too long its gas would be stranded. He had
taken many offers to Houston to buy gas at the wellhead
from the Asian market that had been turned down. He
predicted that Point Thompson would be returned to
ExxonMobil and that it would do an LNG study. He stated
that numerous gas studies in the state had resulted in
nothing. He believed that gas in Alaska was being used by
companies as negotiation material for lower oil taxes;
people were moving either to urban areas with gas or out of
state as a result. He reiterated that HB 9 was not what was
best for Alaska; he was concerned that the bill gave
credence to an AGIA process. He opined that the economy of
scale on large project was what the state needed. He stated
the federal government had described North Slope as a gas
deal with some oil left. He urged the importance of
extracting the gas in a way that would bring low cost
energy.
5:37:05 PM
Mr. Walker stressed that if the state did not react to
changes in the marketplace that its future would not be
productive for later generations. He discussed that for
$250 million and in 36 months it would be possible to have
trucked gas to Fairbanks for approximately $7.00. He
reiterated that if the problem was not acknowledged there
would never be a solution.
Co-Chair Stoltze believed Mr. Walker and the bill sponsors
shared many opinions about problems with AGIA. Mr. Walker
reiterated that he did not support HB 9. He believed the
problem was the AGIA contract.
Representative Wilson did not believe that the bill set the
size of the pipeline. She queried whether Mr. Walker's
strongest concern was that the line would not be large
enough. Mr. Walker replied that the volume of the line was
set by AGIA and could not be over 0.5 billion cubic feet.
Representative Wilson explained that the legislature had
the ability to determine that AGIA was no longer economical
in the future. Mr. Walker answered it would be more
difficult down the road if the problem was not fixed at
present.
5:40:45 PM
Representative Neuman stated that the larger line would
cost $30 billion to $40 billion. He believed an analysis of
the project's economic and viability plan was lacking
including timelines, work plans, budgets, in-field work
assessments, environmental impact statements, right-of-
ways, LNG components, and other. He wondered where the
project plan was.
Mr. Walker replied that the project plan was that Alaska
needed to own the infrastructure. He had provided detail on
a financial analysis and a document generated by Wood
MacKenzie had been provided to legislators. He explained
that if state owned the pipeline its equity would be from
$4 billion to $6 billion with a return of 12 percent. He
emphasized that a small volume line would require the same
cost input, but would have no financial return. He was not
coming forward to ask for money for a gasline; his message
was related to what had been learned and what the state
should do. He believed Alaska needed to take care of
itself, not necessarily through the Alaska Gasline Port
Authority. He expressed his frustration about items
happening in the state. He pointed to dramatic population
declines in areas due to the high cost of energy. He
discussed contracts the port authority had lost because of
industry influence; he stressed that the situation was not
right and should not happen. The group was a not for profit
made up of Fairbanks-born individuals who were trying to do
the right thing.
Representative Gara asked for an explanation of the
difference in price of energy to consumers between a large
line versus (i.e. 3 billion cubic feet) versus a smaller
line under HB 9 line (i.e. 500 or 250 million cubic feet).
Mr. Walker replied that a large line would reduce the price
of energy in Fairbanks down to the $3.00 to $4.00 range
versus the $10.00 to $14.00 range.
Representative Gara asked for Mr. Walker's take on the
argument that the state would run out of gas if it waited
for a big line. Mr. Walker did not believe the state would
run out of gas; he was impressed by gas estimates for Cook
Inlet and stated that even if the estimates were wrong by
three-quarters there would still be a significant amount of
gas in the area. He discussed that more economical and
quicker options existed including bringing gas down by
truck or train to Fairbanks; the options would be labor
intensive, which would not be a bad thing; however, he
reiterated his belief that Cook Inlet would not run out of
gas.
5:46:51 PM
Representative Guttenberg thanked Mr. Walker for his work
over the years. He asked for an expansion of detail related
to the transparency and confidentiality issue.
Mr. Walker was concerned that the structure under HB 9
could be handed off to anyone. He opined that it was the
wrong direction for the state to put money into a project
and not know what was being done or negotiated to ensure
that Alaska was getting the best deal. He believed that a
considerable amount items related to oil and gas in Alaska
was not disclosed to the state. He stressed that an
additional layer of confidentiality was "absolutely the
wrong direction."
Vice-chair Fairclough thanked Mr. Walker for being an
advocate of natural gas for the people of Alaska. She
relayed that there were many rural communities that had
been screaming for a fuel source for decades. The goal of
HB 9 was to have a window of opportunity open to the state.
She believed that AGIA could not go forward and agreed that
TransCanada was not motivated; however, the state was in a
predicament and HB 9 was a step forward and allowed a big
diameter pipeline. She wondered why HB 9 was a barrier to
Mr. Walker's ideas. She stated that the bill did not
specify anything related to the size of the pipeline;
numbers thrown against it were for a different route. She
did not understand the opposition to an opportunity to move
forward. She opined that it would take something along the
lines of a special act from Congress (as with the Trans-
Alaska Pipeline) to get a natural gas pipeline in Alaska
regardless of the size. She believed that if the state
failed to do something exceptional it would never see a
pipeline.
Mr. Walker responded that the act of Congress had been used
to bypass an environmental process in order to expedite the
project. A right-of-way from Prudhoe Bay to Valdez had
already been issued for a natural gas pipeline and a
federal environmental impact statement in addition to
approval from 23 state and federal agencies; therefore, he
did not see the necessity of an act of Congress related to
the project. He stressed that HB 9 was the wrong path
because it did not solve the problem; additionally, as long
as AGIA was in place it did have a volume limitation. His
largest concern was that it did not do "anything good for
the State of Alaska." He pointed to a Harris report showing
that the cost of energy would drop by 65 percent in Bethel
with a large volume line to Valdez. He agreed that the
problem of high energy costs worsened in rural areas. He
wondered what a small volume line would do for places like
Bethel and other areas of the state. He believed the bill
sold the state short.
Vice-chair Fairclough replied that the legislature was
playing by the existing rules; until the governor triggered
the abandonment clause (the legislature could pass a law,
but the governor could veto it) the state could not move
forward. She emphasized that the bill did not specify a
small diameter gasline; it said that the state would be in
compliance with AGIA to move the process forward. She
believed that using personal beliefs related to the
legislation did not provide Alaskans the opportunity to see
that the goal was to shed light on a path forward and the
only path forward currently available to the legislature.
She accentuated that the goal was to respond to Alaskans'
need for reduced energy costs. She agreed that the desired
outcome was the lowest energy cost, but she believed it was
not possible under the scenario Mr. Walker had provided.
She understood that a large diameter line was the right way
to go, but that it was not currently an option. She
supported efforts made for an all-Alaska gasline and stated
that the bill also guaranteed an all-Alaska line.
5:54:22 PM
Co-Chair Stoltze referred to concerns about constraints of
the AGIA process and of the bill. He surmised that Mr.
Walker had provided his opinion about the myth of AGIA
yielding anything and asked whether the assessment was
fair. Mr. Walker agreed.
Co-Chair Stoltze did not believe that the big line used for
comparison existed through the AGIA process.
Mr. Walker concurred. He did not believe anyone in the
current legislature would vote for AGIA at present. He
believed the legislature could send a message to the
governor about requesting him to exercise the abandonment
clause [in the AGIA contract]. He stressed that HB 9 was
not the answer. He concluded that AGIA would inhibit the
state's ability to be the state that it should be.
5:56:27 PM
DOUG SMITH, PRESIDENT and CEO, LITTLE RED SERVICES and
CHAIR, THE ALLIANCE, supported the legislation. He relayed
that high energy costs were inhibiting Fairbanks businesses
from being competitive in the marketplace. He believed the
playing field needed to be leveled; a home run would be a
large gasline, but a base hit would be affordable utilities
for all residents. The Alliance recognized that the bill
did not solve everyone's problems; however, he thought
affordable energy may not reach those in need if the state
waited for a large diameter gasline for the lowest possible
price. He shared that he had worked on a gasline fee study
in 2000; the project was large and would take certain
economics to support an LNG line to tidewater. He stated
that a primary objective was more affordable utilities to
Alaskans.
Representative Gara discussed that a smaller gasline could
set prices between $10 and $16 that consumers would be
obligated to for 20 to 30 years. He asked whether Mr. Smith
would remain supportive of the line if a large line came
along, but the small line prevented consumers from having
access to the cheaper gas. Mr. Smith answered that options
needed to be kept open. He would take the price over some
prices offered currently, especially if the price was
predictable.
6:00:03 PM
RICHARD FINEBERG, SELF, FAIRBANKS (via teleconference),
spoke in opposition to the bill. He believed the bill had
been misguided from its inception. He stated that the major
North Slope producers were the only ones who would benefit.
He believed that confidentiality created a political
circumstance in which bad things happened; if system
safeguards were in place, the state would lose. He referred
to TAPS and stated that the state lost $3.4 billion due to
tariff overcharges in 1985. He stressed that part of the
reason the loss took place was because of confidentiality.
He referred to documentation of the incident that he had
provided the legislature in 1990. He continued to discuss
the loss and referenced a U.S. Supreme Court decision that
gave up refunds. He emphasized that history showed that the
state did not get the low tariffs. He discussed that
industry had stonewalled the state related to the tariffs.
He asserted that the bill was a recipe for disaster because
of increasing confidentiality, eliminating transparency,
eroding checks and balances, eviscerating judicial review,
and its failure to solve fundamental policy problems.
6:05:39 PM
JAMES MERY, VICE PRESIDENT, LANDS AND NATURAL RESOURCES,
DOYON LIMITED, spoke in favor of the bill. He noted the
need for affordable energy in rural and smaller
communities. The company believed in options and that HB 9
had a significant amount of momentum; he believed it needed
to keep moving. He spoke to the pursuit of oil and natural
gas along the corridor. He urged the committee to support
the legislation.
Representative Guttenberg asked whether an imminent domain
issue was a concern to Doyon. Mr. Mery answered that the
state exercised imminent domain on a regular basis. He
noted that generally state law was an extension of imminent
domain to a promoter of a project; he believed it had been
obtained during the building of the TAPS line as well. The
organization was not crazy about imminent domain issues but
there was a process to sort out the value of property in
state law that he believed Doyon could work with.
6:08:53 PM
LYNN WILLIS, SELF, EAGLE RIVER (via teleconference), shared
that he supported the bill if it served to support the
alignment of pipeline projects; however, he did not support
the bill if it would focus on advancing a single project
that would be built without regard to other projects. He
thought all Alaskans cringed at the thought of having a
large pipeline built with a duplicate smaller line running
along next to it. He believed that it was time to define
the various viable scenarios that would result in the
necessary infrastructure to utilize the state's natural gas
resources. He stressed that HB 9 must contribute to the
goal of maximum use of the resource consistent with public
interest and for the maximum benefit of Alaskans. He
discussed several concerns. He wondered whether the bill
provided the mechanism to allow construction of the Cook
Inlet to Fairbanks segment independently from the segment
to tidewater. He wondered whether the bill would allow a
small diameter line from Fairbanks to Cook Inlet and a
large line from North Slope to Fairbanks that could be used
later as the first phase of a large line to tidewater,
Canada, or the Lower 48. He wondered whether a line between
Fairbanks and Cook Inlet would preclude the Glenn Allen
spur line. He queried whether the bill provided for the
possibility that the line could be used to transport gas
from Cook Inlet to the major export line. He wondered
whether the bill's mandate that corporations shall analyze
additional natural gas pipelines connecting to customers in
other regions of the state included other connections such
as surface transport of gas or gas products by rail, truck,
and barge. He summarized that his support was contingent on
the legislation's application to its total effort to
exploit the natural resource for the benefit of Alaskans.
RICHARD PETERSON, SELF, ANCHORAGE (via teleconference),
communicated that he had provided written testimony to the
committee. He saw two issues with the bill that derived
from HB 369. He stated that the legislature was evaluating
a pipeline based upon conditions that AGIA placed on it; if
there was going to be an AGIA line, the bills supported a
line from Fairbanks or Glennallen to Southcentral. He
questioned why the bill asked AGDC to look at a gasline
from the North Slope past Fairbanks to South Central, but
placed constraints that would only occur if an AGIA gasline
was built. He recommended that the legislature ask AGDC to
present two options to the people of Alaska: (1) the best
spur line option if an AGIA line was built and (2) the best
option from the North Slope through the Railbelt to
Southcentral if an AGIA line was not built. He questioned
why AGDC was evaluating a high pressure line that would
transport liquids. He thought the idea may have made sense
if the line was built to Canada where there was an existing
market for liquids, but it did not make sense for Alaska
instate use.
6:14:30 PM
Vice-chair Fairclough thanked Glenn Allen residents for
their involvement and their testimony on the previous day.
BRAD HENSPETER, SELF, COPPER RIVER (via teleconference),
spoke in opposition to the bill. He shared that the average
homeowner needed affordable energy and believed that the
gasline was the way to accomplish the goal to help people
in Glenn Allen, Fairbanks, Delta Junction, Copper Center,
Valdez, and other. He stressed that Copper River residents
paid higher costs for goods and services due to high energy
costs; the same was true for the state when it heated
school buildings, transportation buildings, the legislative
information office, and more. He relayed that it required
more energy to heat a home in the Copper Basin than it did
in Fairbanks. He recommended that committee members look at
the scientific heating degree tables for Interior Alaska
communities showing that 55 percent to 60 percent of the
coldest days happened from November to February; during the
time it was not possible to use wind, solar, or hydro
power. He discussed that biomass was a good option, but a
vehicle would have to drive to each of the trees in the
forest to harvest the energy; he opined that there would
need to be many new roads to reach harvestable timber; the
option may be cheaper than oil, but it would significantly
change the landscape and it was very labor intensive. He
encouraged a pipeline to Valdez with access for communities
along the way; gas could be sold from the Port of Valdez to
help pay for the line. He stressed that a large supply of
fuel was needed to reduce costs.
LISA HERBERT, EXECUTIVE DIRECTOR, GREATER FAIRBANKS CHAMBER
OF COMMERCE (via teleconference), vocalized support for the
bill. She informed the committee that the chamber's board
of directors had specified the high cost of energy as its
top priority for the current year; the board's membership
represented a diverse group of businesses, all of which
were impacted by "staggering" energy costs in the Interior.
She discussed a priority list that included the support of
HB 9. The chamber would work diligently to ensure that
issues such as fair tariffs would be addressed. She stated
that natural gas to the community would allow for economic
growth and lower costs for residents and businesses. Her
energy costs were as much as her mortgage payment
(approximately $1,400 per month). She remained hopeful that
the energy costs would be solved soon. She believed that
the rest of Alaska would be hurting if the state's second
largest city was hurting; she was fearful that the chamber
would be handing out relocation packets to business members
instead of welcoming new businesses. She urged the
committee to pass the legislation.
6:22:18 PM
GEORGE PIERCE, SELF, KASILOF (via teleconference), voiced
his strong opposition to the bill. He stressed that voters
wanted a large instate pipeline. He was tired of producers
holding the gas hostage. He believed the legislature could
tell the governor no.
6:23:55 PM
CLAI PORTER, SELF, ANCHORAGE (via teleconference), strongly
supported HB 9. He had spoken to builders and members of
the real estate community and believed that if the state
did not solve its problem and make progress it would lose
energy and population. He supported steady economic growth
and he felt the bill was a move in the right direction. He
did not believe the federal government would solve the
problem. He believed the state should take the opportunity
and that it could afford the project; the line would create
jobs, provide needed fuels, and would serve all of the
communities across the state. He added that the state could
not wait 10 or 15 years to solve the problem.
6:25:58 PM
GENE THERRIAULT, VICE PRESIDENT, RESOURCE DEVELOPMENT and
EXTERNAL AFFAIRS, GOLDEN VALLEY ELECTRIC (GVE), FAIRBANKS
(via teleconference), voiced his support for HB 9. He
discussed that the company provided electric needs for the
Interior. He relayed that GVE had participated in the open
season that AGDC had held in June 2011. The company hoped
that resources would reach Interior Alaska at a price that
would help to relieve the burden of current energy costs.
The company supported state participation in the
development of an AGDC pipeline and the associated
development of an affordable tariff structure for
residents. He understood that there was concern about the
cost of spur line that would be needed to get gas to the
greater Fairbanks and North Pole area off of the AGDC line;
he trusted that their efforts would produce a commercially
reasonable result. The company believed that a large volume
line may still be constructed for export, but that it was
prudent to continue the AGDC effort focused on instate
needs. The work AGDC had done would still be very helpful
if the governor requested that North Slope producers
aligned under a new effort to build a large line to
tidewater. He opined that the environmental design and
right-of-way work of the agency would be beneficial if the
recent exploration success in Cook Inlet resulted in new
gas resources.
CHUCK WIEGERS, SELF, FAIRBANKS (via teleconference),
supported HB 9. He believed that clean gas and inexpensive
natural gas was the obvious replacement for diesel; the
replacement would not happen overnight or without a plan.
Efforts to truck gas from the North Slope would begin a
process; the bill facilitated the next step and brought
AGDC to an open season in 2013. Once the open season was
conducted the agency could determine the best way to
deliver gas to the Interior at the lowest price possible.
He expressed that the bill also provided AGDC the tools to
deliver a project to bring gas to the Interior and would
provide the flexibility to coordinate with the producers.
He urged support of the legislation.
6:30:38 PM
AT EASE
6:51:38 PM
RECONVENED
DEBORAH BROLLINI, SELF, ANCHORAGE (via teleconference),
testified in support of HB 9. She had wondered why
Anchorage had to plan for brownouts in 2009. She referred
to a recent earthquake and explained that she was not
prepared to keep her family warm in an emergency or if
there was a shortage of natural gas. She emphasized the
need for additional energy infrastructure to assure utility
services would not be interrupted. She expressed
appreciation to the legislature for looking for solutions
to the problem.
JULIE DUQUETTE, SELF, FAIRBANKS (via teleconference),
testified in support of HB 9. She stated that the bill
provided the framework to get gas to Fairbanks; the
community was currently feeling the impact of high energy
costs. She relayed that residents with fixed and low income
were hit the hardest. She explained that money once spent
on goods was now spent on fuel and electricity. She
believed natural gas was the obvious replacement for much
of the fuel used currently. She believed a trucking project
that was underway by Flint Hills and Golden Valley Electric
was a good start and an instate pipeline was the next
logical step. She opined that taking action would help
ensure residents' future while possible. The bill would
allow AGDC to hold an open season in 2013 and to provide
options for the construction of a pipeline to provide gas
at the lowest possible cost. She encouraged support of the
legislation.
6:55:26 PM
DAVID OWENS, OWENS INSPECTION SERVICES, PALMER (via
teleconference), spoke in favor of HB 9. He was in support
of recommendations by AGDC.
CHUCK RENFRO, HOME BUILDERS ASSOCIATION, ANCHORAGE (via
teleconference), testified in support of HB 9. He echoed
the prior speaker's testimony. He stressed the need for low
cost gas in the Willow area and for prompt action.
6:57:38 PM
AT EASE
7:07:06 PM
RECONVENED
LEIGH SKILES, SELF, HOMER (via teleconference), testified
in support of HB 9. She emphasized the need for affordable
gas and noted that the bill represented a first step. She
believed that the bill was about moving forward to obtain
more information to make the future possible related to gas
for Alaskans.
Representative Mike Hawker addressed the AGDC project plan
and corrected what he felt was a misrepresentation of the
facts. He noted that $17 a million cubic feet (mcf) could
be found in the AGDC plan (Commercial Analysis and
Findings, page 3-3); the section summarized options for
capacities and products. He explained that the tariff
estimate calculated to a $17 cubic foot delivery price was
option number 4 (a 250,000 mcf per day) and involved
conditioned natural gas and an enriched NGL [Natural Gas
Liquids] stream. He clarified that the option was described
as "unacceptable tariff," but was maintained as an option
for comparative purposes. He emphasized that the number was
included as a benchmark and not as the base scenario that
the project had been built on.
7:12:51 PM
Representative Gara responded that AGDC had produced a
report of options for a 250,000 mcf line and a 500,000 mcf
line; the 500 mcf line only worked if there was an export
component. He stated that the export component was
questionable because under the study terms the cost of gas
equaled approximately $15 to $16 when factoring in the cost
of conditioning at a natural gas plant, possible expansion
of the plant, shipping to Asia, and the cost of gas. He was
skeptical that the state would find a great market for the
price for the long-term in Asia. He observed that the
option would be the 250,000 mcf line if the larger option
did not work. He stressed that there was nothing in the
bill that said AGDC could not build a 250,000 mcf line. He
did not appreciate being "accused of misleading anybody."
He stated that smaller line would produce gas combined with
NGL, which would make the gas cheaper, at roughly $14 an
mcf plus the cost of local distribution. He opined that the
gas under the scenario was expensive. He thought that if
the intention was to build a line larger than the 250,000
mcf that it should be stated in the bill. He stressed that
the problem with the bill was that AGDC was given the power
to move forward with the project, but it did not seem like
the legislature would have the power to stop it. He
referred to his upcoming amendment that would provide the
legislature the power to stop the project if it looked like
a bad idea.
7:15:51 PM
Representative Gara MOVED to ADOPT Amendment 4, 27-
LS0075\K.4 (Bullock, 3/19/12):
Page 1, line 2, following "Corporation;":
Insert "requiring legislative approval before
construction of an in-state natural gas pipeline
developed by the Alaska Gasline Development
Corporation;"
Page 4, following line 4:
Insert a new subsection to read:
"(b) The Alaska Gasline Development Corporation
may not begin to construct an in-state natural
gas pipeline before project sanction and before
receiving authorization by law to proceed with
the construction. In this subsection, "sanction"
has the meaning given in AS 43.90.900."
Reletter the following subsections accordingly.
Page 5, line 15:
Delete "(c) and (d)"
Insert "(d) and (e)"
Co-Chair Stoltze OBJECTED.
Representative Gara explained that Amendment 4 would
provide the legislature with the chance to stop the project
if it produced gas that was too expensive. The amendment
would prevent construction of a pipeline before project
sanction and before receiving authorization by law to
proceed. He opined that the legislature did not want to
give away the power to stop the project.
Representative Hawker testified in opposition to the
amendment. He stated that the amendment said that AGDC
could not begin to construct an instate gasline before a
project was sanctioned and before receiving authorization
by law. He relayed that the definition of "sanction" fell
under AS 43.90.900, which was the AGIA statute; AGDC would
be linked to the AGIA sanctioning process. He relayed that
as defined in the statute, the term sanction was to make
financial commitments to go forward with the project as
evidenced by entering into financial commitments of at
least $1 billion with third parties. He stressed that the
only reference to sanctioning within AGIA was AS 43.90.200,
which required TransCanada (license holder under AGIA) to
sanction within certain times and parameters. He believed
the amendment would give TransCanada the ability to
sanction the project.
Representative Hawker emphasized that the amendment was
flawed and that AGDC was to provide the legislature with
options to move forward with once it deemed a project was
commercially reasonable. He stated that the bill contained
specific provisions that required AGDC to follow its
project plan. He accentuated that the project plan was not
the 250,000 mcf; the base plan was the 500,000 mcf line to
tidewater with an open season to determine its viability.
He furthered that the bill contained specific requirements
for AGDC to adhere to the principle of making gas available
at the lowest possible cost to Alaskans. He stressed that
AGDC would not be able to lock consumers into an
unreasonable rate of gas for 20 to 30 years. He explained
that state investment could not be made without express
approval of the legislature; however, if a project could be
developed by the private sector it would not require
legislative approval.
7:21:39 PM
Representative Guttenberg suggested that the amendment
addressed his concern that the state would have no say on
the tariffs or other nature of the gasline; there could be
a successor that took over the project in the future and
the state would have no input. He acknowledged that the
amendment was flawed but stressed that the intent was
clear.
7:23:45 PM
Representative Chenault testified in opposition to the
amendment and asserted that AGIA already provided action
without additional input from the legislature. He believed
the only way the legislature would have any input was if it
was asked for more sanctions or money to complete a
project. He opined that the legislature should not be in
the pipeline business because road blocks that it put up
either slowed or quashed projects. He stressed that there
were enough safe guards in the legislation as written and
echoed that the legislature had the power of the purse
strings.
Representative Gara surmised that there would be no
opportunity for legislative approval of the project if
additional money was not requested. He noted that
subsequently there would be no recourse to binding
consumers to high priced gas for 20 years or more. He
thought the idea was bad and that the legislature should
have a say in whether the project was good. He disputed
that the legislature's ability to weigh in on the project
would act as a road block and stressed that it would be the
public's opportunity to express its opinion. He suggested
that there could be better options down the road.
7:27:14 PM
Representative Gara stated that the amendment pertained to
the definition of sanction under Section 43.90.900. He
addressed that the definition of sanction had nothing to do
with providing TransCanada or AGIA with any power over
anything. He read the definition as follows:
Sec. 43.90.900. Definitions.
In this chapter, unless the context otherwise
requires,
(22) "sanction" means to make financial
commitments to go forward with the project as
evidenced by entering into financial commitments of at
least $1,000,000,000 with third parties;
Representative Gara did not believe the amendment was
flawed, but would accept an amendment with different
language on project sanction if the sponsors' supported
one.
7:29:16 PM
A roll call vote was taken on the motion to adopt Amendment
4.
IN FAVOR: Gara, Guttenberg
OPPOSED: Wilson, Costello, Edgmon, Fairclough, Joule,
Thomas, Stoltze
The MOTION FAILED (2-7).
Representative Gara MOVED to ADOPT Amendment 5, 27-
LS0075\K.5 (Bullock, 3/19/12):
Page 1, line 2, following "Corporation;":
Insert "requiring legislative approval before
certain expansion of an in-state natural gas
pipeline developed by the Alaska Gasline
Development Corporation;"
Page 4, following line 4:
Insert a new subsection to read:
"(b) The Alaska Gasline Development Corporation
may not expand the design capacity of an in-state
natural gas pipeline to accommodate throughput of
more than 500,000,000 cubic feet a day of North
Slope gas to market before receiving
authorization by law to proceed with the
expansion."
Reletter the following subsections accordingly.
Page 5, line 15:
Delete "(c) and (d)"
Insert "(d) and (e)"
Co-Chair Stoltze OBJECTED.
Representative Gara explained that Amendment 5 would ensure
that a violation of the AGIA statute would require the
responsible entity to come to the legislature to get the
law changed; it would prevent the state from being liable
for any trouble damages.
Representative Hawker communicated that the bill included
language requiring that the pipeline would not violate AGIA
covenants. He was concerned that the amendment would not
allow AGDC to expand the design capacity beyond the 0.5 bcf
per day before being authorized by law. He opined that the
constraint violated one of the bill's most important
concepts that would allow the alignment of an AGDC and AGIA
project and the ability to exceed the 0.5 bcf per day
limit. He maintained that the amendment could close out
options.
7:32:03 PM
Representative Guttenberg referred to comments by Mr.
Walker related to transparency. He referred to a court case
that due to a lack of transparency the state had had little
information to base decisions upon. The intent was to allow
for legislative and public input and an understanding of
the project.
7:33:16 PM
Representative Gara WITHDREW Amendment 5. He stated he was
unhappy with the drafting of the amendment.
Representative Gara MOVED to ADOPT Amendment 6, 27-
LS0075\K.16 (Bullock, 3/20/12):
Page 1, line 2, following "Corporation;":
Insert "requiring legislative approval for the
Alaska Gasline Development Corporation to
continue the development of an in-state natural
gas pipeline after a certain amount of money has
been spent to develop the project;"
Page 4, following line 4:
Insert a new subsection to read:
"(b) The Alaska Gasline Development Corporation
may not continue the development of an in-state
natural gas pipeline without legislative approval
after the Alaska Gasline Development Corporation
spends $100,000,000 for the development of the
in-state natural gas pipeline after the effective
date of this section. Legislative approval may be
in the form of an appropriation to the Alaska
Gasline Development Corporation for the purpose
of developing an in-state natural gas pipeline."
Reletter the following subsections accordingly.
Page 5, line 15:
Delete "(c) and (d)"
Insert "(d) and (e)"
Co-Chair Stoltze OBJECTED.
Representative Gara stated that the amendment would require
AGDC to report to the legislature to seek further approval
after spending $100 million; the legislature would have the
ability to determine whether money had been spent wisely.
7:34:11 PM
Representative Hawker testified in opposition to the
amendment. He stressed that the goal was to get government
and politics out of the way. The legislature had
appropriated $200 million the prior year. He stressed that
a project could only go as far as the legislature was
willing to fund. The bill required that the Regulatory
Commission of Alaska would review any proposed ownership
changes. He felt that HB 9 contained adequate provisions to
protect the public. He urged the committee not to lose
sight that the public wanted a pipeline to move forward.
7:36:07 PM
Representative Wilson testified in opposition to the
amendment and asserted that Fairbanks could not keep
waiting.
Representative Guttenberg emphasized that following a
deliberate and accurate path was due diligence, not slowing
down the process. He stressed that the goal was to avoid
mistakes.
7:38:17 PM
Representative Chenault referred to Mr. Walker and recalled
his statements that the road to cheaper gas in Alaska was
to retract AGIA, thereby removing restriction of the
project. He discussed that the prior year the legislature
had approved a $200 million appropriation for funding
AGDC's work to get them to the open season. He furthered
that including money already spent and the proposed fund,
the total was between $240 million to $260 million. The
entity had estimated that it would cost approximately $400
million to get to the open season in 2013. He opined that
the entity would be back the following year for an
additional appropriation and that the legislature could
have conversations on the project at that time. The AGIA
process did not provide the same option; TransCanada had
not disclosed the work done or the progress after $500
million dollars. He reiterated that the bill included
safeguards for the legislature to get more information on
the project in the future.
7:41:01 PM
Representative Gara concluded that the public wanted the
legislature to make sure that due diligence was done and
that the public did not end up with high prices. He
observed that Cook Inlet gas might better protect the
consumer. He believed the legislature should see how money
was spent and whether the project should go forward. He
stressed that the legislature should have the ability to
act if a better project with cheaper gas was identified;
private companies should not be relied upon to make the
decision.
A roll call vote was taken on the motion to adopt Amendment
6.
IN FAVOR: Gara, Guttenberg
OPPOSED: Wilson, Costello, Edgmon, Fairclough, Joule,
Thomas, Stoltze
The MOTION FAILED (2-7).
7:43:07 PM
Representative Guttenberg MOVED to ADOPT Amendment 7, 27-
LS0075\K.6 (Bullock, 3/19/12):
Page 1, line 2, following "Corporation;":
Insert "relating to the tariff for transporting
natural gas liquids in an in-state natural gas
pipeline developed by the Alaska Gasline
Development Corporation;"
Page 6, following line 10:
Insert a new subsection to read:
"(h) If the Alaska Gasline Development
Corporation or a joint venture, partnership, or
other entity that includes the Alaska Gasline
Development Corporation elects to be subject to
regulation under AS 42.05 or AS 42.06, the Alaska
Gasline Development Corporation shall propose and
support separate rates for the transportation of
gas liquids to be paid by the shippers of gas
liquids."
Reletter the following subsection accordingly.
Co-Chair Stoltze OBJECTED.
Representative Guttenberg explained that the amendment took
the straddle plant off of the backs of Fairbanks and the
Interior rate payers and gas users. He discussed a flow
schematic that was divided into the North Slope facilities
(including conditioning and compressor plants and NGL
pumps), a compressor station north of the Yukon, and a
straddle plant in Fairbanks with a continuation to an NGL
extraction facility in Cook Inlet. The rate base in the
project plan placed the sole responsibility of the straddle
plant on Fairbanks. He maintained that Fairbanks would not
be taking any NGL; the NGL would be taken off in
Southcentral. The cost of the plant should be to the rate
payers or shippers, not just the Interior users of the gas.
The amendment would place the cost on the shippers that
would use the NGL.
7:45:55 PM
Representative Hawker testified in opposition to the
amendment and maintained that it was technically flawed. He
explained that the amendment provided a provision that its
consequences were effective if AGDC elected to be subject
to regulation under the Public Utilities Act or the Alaska
Pipeline Act. He stressed that the provision was not an
option based on a regulatory amendment that had passed the
prior day; the adopted amendment required that AGDC must
operate under the contract carriage statutes in HB 9. He
accentuated that the goal was to keep the legislature out
of rate decisions. He discussed that the concept of the
initial plan was for a wet gas pipeline and two straddle
plants that would be the financial responsibility of the
users; the concept created a burden due to the relatively
small population of Interior Alaska. He surmised that a dry
gas pipeline could increase costs to the Interior. He
reiterated the desire to keep the state out of anticipating
"single hypotheticals in a world of unlimited
hypotheticals."
7:48:47 PM
Representative Guttenberg noted that the amendment had been
drafted prior to other amendments. He asserted that the
plant would not benefit the people of Interior Alaska, but
those down the line who would take the NGL. There would be
no issue if there was dry gas down the road because there
would be no need for a straddle plant. He believed the
Interior would be subsidizing the rate payers at the end of
the line.
7:50:59 PM
A roll call vote was taken on the motion to adopt Amendment
7.
IN FAVOR: Gara, Guttenberg
OPPOSED: Wilson, Costello, Edgmon, Fairclough, Joule,
Thomas, Stoltze
The MOTION FAILED (2-7).
Representative Guttenberg MOVED to ADOPT Amendment 8, 27-
LS0075\K.7 (Bullock, 3/19/12):
Page 1, line 2, following "Corporation;":
Insert "relating to the tariff for transporting
natural gas in an in-state natural gas pipeline
developed by the Alaska Gasline Development
Corporation;"
Page 6, following line 10:
Insert a new subsection to read:
"(h) If the Alaska Gasline Development
Corporation or a joint venture, partnership, or
other entity that includes the Alaska Gasline
Development Corporation elects to be subject to
regulation under AS 42.05 or AS 42.06, the Alaska
Gasline Development Corporation shall propose and
support rates for the transportation of gas to
delivery points along the in-state natural gas
pipeline that are based on the costs to deliver
natural gas to each delivery point and that do
not include the costs to make deliveries
downstream from each delivery point for which a
separate rate is set."
Reletter the following subsection accordingly.
Co-Chair Stoltze OBJECTED.
Representative Guttenberg explained the amendment would
make tariffs distance sensitive. He was concerned that
there could be successors who did not agree that more
people had to be paying for tariffs or other. He furthered
that at some point there could be gas taken off at the
Yukon River. The amendment would mean that users would pay
tariffs based on the point where the gas was taken off of
the line.
7:53:32 PM
Representative Hawker testified in opposition to Amendment
8. He observed that the opportunity was not available in
the bill due to previously adopted amendment. He discussed
that related to the transportation of gas rates would be
proposed and supported that were based on the cost to
deliver natural gas to each delivery point (that did not
include the cost to make deliveries downstream from the
delivery point). He asserted that the amendment required
AGDC to pass costs onto Fairbanks if there was a straddle
plant constructed in the area; it would be the incremental
cost of making dry consumer ready gas available to
Fairbanks. The sponsors did not want to burden the Interior
with an inappropriate or unnecessary cost structure; they
believed in moving forward to an open season where the
market could determine the best project. He stressed that
cost checks were included in the legislation and felt the
amendment would be counterproductive.
7:55:59 PM
Representative Gara understood that the amendment sponsor
was working to protect his community from the high prices
of gas. He opined that the gas prices under the proposed
project were phenomenally high. He explained that he could
not support the amendment due to problems he had with the
legislation. He explained that the amendment would result
in higher prices for Anchorage and maintained that Interior
costs would be high and that other options would result in
cheaper prices.
7:57:25 PM
Representative Wilson asked for a clarification on the
costs to users related to the straddle plant.
Representative Chenault explained that under the current
plan the rates were tied to the straddle plant. Under a
distance sensitive plan rates would be tied to the costs to
deliver.
7:59:34 PM
Representative Guttenberg surmised that the lateral line
and the straddle plant would be borne by Fairbanks.
TOM WRIGHT, STAFF, REPRESENTATIVE MIKE CHENAULT, explained
that the bill included an additional tariff for the
straddle plant and the lateral line to Fairbanks.
A roll call vote was taken on the motion to adopt Amendment
8.
IN FAVOR: Wilson, Guttenberg
OPPOSED: Costello, Edgmon, Fairclough, Gara, Joule,
Thomas, Stoltze
The MOTION FAILED (2-7).
8:01:33 PM
Representative Gara MOVED to ADOPT Amendment 9, 27-
LS0075\K.14 (Bullock, 3/19/12):
Page 2, lines 1 -3:
Delete "relating to the Alaska Natural Gas
Development Authority; relating to the
procurement of certain services by the Alaska
Natural Gas Development Authority;"
Page 16, line 20, through page 19, line 16:
Delete all material
Renumber the following bill sections accordingly.
Page 21, lines 30-31:
Delete "38.34.060; AS 41.41.030, 41.41.040, AS
41.41.050, and 41.41.080"
Insert "and 38.34.060"
Co-Chair Stoltze OBJECTED.
Representative Gara explained that the amendment worked to
preserve the powers of Alaska Natural Gas Development
Authority (ANGDA) that had been established by statute. The
entity had been looking for the most cost effective options
to deliver gas on the road system and to rural Alaska. He
believed the entity served a valid purpose and did not want
to see its powers weakened.
Mr. Wright clarified that the legislation would not
eliminate AGNDA. The only duty that had been taken away
from the entity was the role of a builder. He detailed that
references (AS 41.41.030) related to the ANGDA board of
director's term of office had been deleted; Section 18
established that ANGDA would be governed by the AHFC board
of directors. He furthered that the bill removed redundant
information; 41.41.040 was the removal and vacancy of the
ANGDA board of directors, 41.41.050 was the board quorum
and voting, and 41.41.080 was legal counsel (Section 20
that allowed ANGDA to have legal counsel).
8:03:21 PM
Representative Gara believed that the bill removed ANGDA's
power to pursue a gas pipeline that would result in lower
costs to Alaskans. He opined that page 19 of the
legislation abolished the ANGDA board, which would become
the AHFC board. He did not believe the action was
consistent with voter initiative.
A roll call vote was taken on the motion to adopt Amendment
9.
IN FAVOR: Gara, Guttenberg
OPPOSED: Wilson, Costello, Edgmon, Fairclough, Joule,
Thomas, Stoltze
The MOTION FAILED (2-7).
8:04:25 PM
Representative Gara MOVED to ADOPT Amendment 11 [Amendment
10 was previously offered as an amendment to Amendment 3.]:
Page 2, line 27 through Page 3, line 2
Delete all material
Renumber the following subsection accordingly.
Co-Chair Stoltze OBJECTED.
Representative Gara explained that the amendment removed
two sentences from the bill that he believed were
inaccurate. First, it would remove "passage of this Act
constitutes a finding of public convenience and necessity,"
given his belief that the legislature should make the
finding. Second, it would delete that the project selected
by AHFC was in the best interest of the state. He did not
know how anyone on the committee could know that to be
true. He stressed that future pipelines could be more
attractive.
8:06:23 PM
Representative Hawker testified in opposition to the
amendment. He believed the amendment would reduce the
effectiveness of the legislation.
Vice-chair Fairclough noted that AGIA had passed in 2008;
the state had been waiting four years to find out whether
there was a valid project. She opined that the legislation
provided a window for the legislature to look forward as it
awaited information from AGIA.
Co-Chair Stoltze recalled from Mr. Walker's testimony that
AGIA had "put the nail" in ANGDA.
8:08:33 PM
Representative Gara pointed to subsection 6, page 3, line 1
of the legislation and explained that it said the pipeline
chosen by AHFC was in the state's best interest. He
maintained that the legislature did not know what the
pipeline would be and queried how anyone could know. He
guessed that it was an unconstitutional delegation of
authority.
A roll call vote was taken on the motion to adopt Amendment
11.
IN FAVOR: Gara, Guttenberg
OPPOSED: Wilson, Costello, Edgmon, Fairclough, Joule,
Thomas, Stoltze
The MOTION FAILED (2-7).
8:09:50 PM
Representative Guttenberg MOVED to ADOPT Amendment 12, 27-
LS0075\K.18 (Bullock, 3/20/12):
Page 4, line 5:
Delete "Upon commencement of construction of"
Insert "When designing"
Co-Chair Stoltze OBJECTED.
Representative Guttenberg explained the amendment. He read
from page 4, line 5 of the bill:
Upon commencement of construction of an in-state
natural gas pipeline, the Alaska Gasline Development
Corporation shall analyze additional gas pipelines
connecting to industrial, residential, or utility
customers in other regions of the state.
Representative Guttenberg removed the language "upon
commencement of construction" and replaced it with "when
designing." He stressed that the time to determine the
demand was during the design process.
8:11:02 PM
Representative Chenault opposed Amendment 12 and maintained
that it would add a huge cost to the legislation and was
not the right time in the process. He related that once
construction started the engineers responsible for the
design would have time to look at designs for other
possibilities and to bring them into alignment.
Representative Guttenberg asserted that the designers would
only need to look at the instate demand study that had been
done and to determine whether anyone else wanted something.
He discussed that there were infrastructure projects
farther out than the Railbelt. He stated that it was never
too early to understand what the project was prior to the
commencement of design or construction.
Representative Chenault observed that designing the project
included environmental impact studies, right-of-way
studies, and other. He believed the process was time
consuming. He opined that design of gas distribution
systems could occur during the construction process.
Representative Guttenberg clarified that the amendment
related to the commencement of design, not construction.
Representative Chenault responded that designing the
project had to do with the development of tariff rates from
one location to another. He stated that the state could
spend years designing different gas extension proposals to
serve every community instead of concentrating the project
at hand, which was the development of a pipeline project.
8:14:37 PM
A roll call vote was taken on the motion to adopt Amendment
12.
IN FAVOR: Gara, Guttenberg
OPPOSED: Wilson, Costello, Edgmon, Fairclough, Joule,
Thomas, Stoltze
The MOTION FAILED (2-7).
Representative Joule observed that he would have liked to
see a tax cap on some communities; however, it had not fit
within the legislation. The amendment would have resulted
in a net zero and would have allowed two boroughs to
function in a more fiscally responsible way.
Representative Hawker appreciated the concept brought
forward by Representative Joule and relayed his commitment
to help find an appropriate legislative vehicle for the
issue.
TOM LAKOSH, SELF, ANCHORAGE (via teleconference), spoke in
opposition to the bill. He felt that HB 9 may be premature
given the possibility of the development of a line with
natural gas. He was very concerned that there were not
sufficient checks and balances in the legislation. He urged
review of Cook Inlet development, the option to truck or
rail LNG to Fairbanks, or propane from the North Slope.
Based on the cost estimates he believed the legislation was
a "boondoggle" that would serve no one but the builders. He
hoped the committee would reconsider the legislation. He
pointed to a potential Susitna dam project that may benefit
from a superconductor; research showed that superconductors
were capable of being run by LNG instead of liquid
nitrogen. He believed the legislature should look at the
entire energy distribution systems throughout the Railbelt
in conjunction with other transmission schemes. He
reiterated that the bill was premature. He discussed other
energy resources including fossil fuels or electricity
generation form.
Representative Gara relayed that one amendment remained
that he had worked with the sponsor on. He asked for the
status.
Co-Chair Stoltze responded that the committee would take up
any remaining amendments the following morning.
8:20:23 PM
Representative Wilson noted that the North Star Borough met
during the evening and provided support for the
legislation.
Co-Chair Stoltze CLOSED public testimony.
HB 9 was HEARD and HELD in Committee for further
consideration.