05/04/2007 03:00 PM House LABOR & COMMERCE

HJR 13-NATURAL GAS FOR STATE RESIDENTS                                                                                        
                                                                                                                                
3:47:16 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON announced  that the final order of  business would be                                                               
HOUSE JOINT RESOLUTION  NO. 13, Urging the  attorney general, the                                                               
producers  of natural  gas  in  the Cook  Inlet  region, and  the                                                               
Regulatory Commission of  Alaska to work to  secure long-term and                                                               
affordable supplies of natural gas  for the people and businesses                                                               
of the state.                                                                                                                   
                                                                                                                                
3:47:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX  moved to adopt proposed  CSHJR 13, Version                                                               
25-LS0747\C,  Bullock, 5/3/07,  as  the  working document.  There                                                               
being no objection, Version C was before the committee.                                                                         
                                                                                                                                
REPRESENTATIVE  GARDNER,  speaking  as  the sponsor  of  HJR  13,                                                               
related  her understanding  that most  members of  this committee                                                               
are   aware  of   the  need   for  ConocoPhillips   Alaska,  Inc.                                                               
("ConocoPhillips") and  Marathon Oil  Corporation to  renew their                                                               
export license in order to  continue exportation of the known gas                                                               
reserves in Cook Inlet.   The purpose with HJR 13  is to serve as                                                               
a  wake-up call  and request  that the  attorney general  and the                                                               
state participate  in that decision  in order to ensure  that the                                                               
best interests  of the state are  considered.  She noted  that in                                                               
most  respects  the  mere introduction  of  this  resolution  has                                                               
achieved  the goal  since the  attorney  general has  intervened.                                                               
However, the memorandum  dated April 29, 2007,  from Kevin Banks,                                                               
Acting Director,  Division of  Oil &  Gas, Department  of Natural                                                               
Resources,  relates the  following:   "The consideration  of this                                                               
resolution  by  the  committee  is  helpful  and  I  believe  the                                                               
resolution  shows  that  State  government  is  speaking  with  a                                                               
unified  voice to  assure that  natural gas  will continue  to be                                                               
available to the domestic energy  market in Southcentral Alaska."                                                               
Therefore,   she  indicated   the  need   to  proceed   with  the                                                               
resolution.     She  pointed  out   that  the   companion  Senate                                                               
resolution  has  been  modified,   and  those  modifications  are                                                               
reflected in  Version C of  HJR 16.   Version C merely  makes the                                                               
request  to  the  U.S.  Department  of  Energy.    Representative                                                               
Gardner characterized the resolution  as a holistic determination                                                               
regarding whether  continuing to export Southcentral  gas is good                                                               
for  Alaska or  not.   She acknowledged  that the  aforementioned                                                               
isn't simple  and one  must keep  in mind  that it's  very likely                                                               
that the  facilities used to  export gas could be  very important                                                               
to provide gas for Southcentral Alaska in the future.                                                                           
                                                                                                                                
3:52:01 PM                                                                                                                    
                                                                                                                                
BART WATSON, Staff to Representative  Berta Gardner, Alaska State                                                               
Legislature, explained  that Version C directs  the resolution to                                                               
the U.S.  Department of  Energy rather than  have the  state make                                                               
its views known.  The change  is reflected in the first clause of                                                               
the title where the reference  to the attorney general is changed                                                               
to the U.S. Department of Energy.   The remainder of the title is                                                               
the same as the original version.   He then pointed out there are                                                               
two minor  clauses inserted  on page 1,  lines 8-11,  which bring                                                               
HJR 13 in  conformance with the Senate companion  resolution.  On                                                               
page 2, the  first two "WHEREAS" clauses were  inserted simply as                                                             
additions to  flesh out  the other clauses.   Version  C includes                                                               
two new provisions on page 2, lines  25-30 and on page 2, line 31                                                               
through page  3, line 3.   The  intent of the  aforementioned two                                                               
provisions is to support the  administration, which has requested                                                               
in  its  intervention.    He  reminded  the  committee  that  the                                                               
administration says  that it supports  the renewal of  the export                                                               
license so long  as the following three conditions are  met:  the                                                               
energy producers  take reasonable  steps to replace  the reserves                                                               
depleted  during the  two-year extension;  the contracts  for the                                                               
utilities  for natural  gas be  signed prior  to approval  of the                                                               
extension; and the  liquefied natural gas (LNG) plant  be open to                                                               
any new  producers.   Mr. Watson  pointed out  that the  issue is                                                               
that if someone  has a small, new find, it  should be fairly easy                                                               
to place the gas.  However, for  a large find there may be no way                                                               
to get it  to market because there isn't a  large enough existing                                                               
market  without exportation  of  the  gas.   He  opined that  one                                                               
reason to  support the continued export  of the gas is  to ensure                                                               
that there is incentive for additional exploration.                                                                             
                                                                                                                                
3:57:31 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  mentioned that he would  have opposed HJR 13  had it                                                               
come  in  prior  to  the   cutoff  time  for  federal  testimony.                                                               
However, the  original resolution  was dated  two days  after the                                                               
cutoff for  testimony to be  submitted to the U.S.  Department of                                                               
Energy.                                                                                                                         
                                                                                                                                
3:58:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX moved to report CSHJR 13, Version 25-                                                                     
LS0747\C,  Bullock,  5/3/07,  out of  committee  with  individual                                                               
recommendations and  the accompanying fiscal notes.   There being                                                               
no objection, CSHJR  13(L&C) out of the House  Labor and Commerce                                                               
Standing Committee.