03/28/2001 03:10 PM House O&G

HB 83 - NATURAL GAS RESOURCES DEVELOPMENT                                                                                     
                                                                                                                                
[Contains discussion of SB 164]                                                                                                 
                                                                                                                                
Number 0765                                                                                                                     
                                                                                                                                
CHAIR OGAN  announced that the  final order of business  would be                                                               
HOUSE BILL  NO. 83,  "An Act relating  to natural  gas pipelines,                                                               
providing  a   statutory  definition  for  the   portion  of  the                                                               
constitutional  statement of  policy on  resource development  as                                                               
applicable to  the development and transportation  of the state's                                                               
natural gas  reserves, amending Acts relating  to construction of                                                               
natural gas pipelines to require  conformance to the requirements                                                               
of  the   statutory  definition,   and  amending   the  standards                                                               
applicable  to  determining  whether a  proposed  new  investment                                                               
constitutes  a  qualified  project  for purposes  of  the  Alaska                                                               
Stranded  Gas Development  Act;  and providing  for an  effective                                                               
date."                                                                                                                          
                                                                                                                                
CHAIR OGAN  informed members that  he had no intention  of moving                                                               
the bill  that day,  but wished to  [adopt] a  proposed committee                                                               
substitute (CS), Version L  [22-LS0322\L, Chenoweth, 3/28/01], as                                                               
a work draft.   Version L has language that  would make it almost                                                               
a  companion bill  to [SB  164];  however, it  keeps the  project                                                               
language originally in HB 83, on  page 2, lines 15 through 25, as                                                               
well as the idea of designing enough capacity.                                                                                  
                                                                                                                                
CHAIR  OGAN indicated  his  desire  to have  a  short meeting  on                                                               
[Version L] and  to have members familiarize  themselves with its                                                               
new language.   He stated his intention  of eventually developing                                                               
HB 83 into  the hub concept, but acknowledged it  may take longer                                                               
than the  current session to do  so.  He announced  the intention                                                               
of having meetings over the  interim, therefore, in order to move                                                               
rapidly at the beginning of the  next session, should that be the                                                               
wish of the committee.                                                                                                          
                                                                                                                                
Number 0380                                                                                                                     
                                                                                                                                
CHAIR  OGAN referred  to  a letter  in  committee packets  [dated                                                               
March  21, 2001]  from  Ken Thompson  of  Pacific Rim  Leadership                                                               
Development.     He  read  from  the   attachment,  which  listed                                                               
"Requirements for  a Natural Gas  Industry in Alaska."   He noted                                                               
that  the  first item,  "Gas  pipeline  traversing Alaska,"  will                                                               
probably be  taken care of by  the Senate bill.   The second item                                                               
needed discussion  as to whether  the state  has at least  a 12.5                                                               
percent share  in the pipeline.   The  third item related  to "in                                                               
kind"  use of  gas  [versus taking  monthly  royalty checks  from                                                               
producers selling  the state's share];  he suggested  in-kind gas                                                               
could be  on the Kenai Peninsula,  for example, to keep  the urea                                                               
plants going there.  The fourth item read:                                                                                      
                                                                                                                                
     4)  State formulate  clear policies and regulations for                                                                    
     clarification  of transparent  netback  pricing at  the                                                                    
     "hub" or  "spur line points"  as a valuation  basis for                                                                    
     gas sales within  the State and netback  pricing at the                                                                    
     North Slope wellhead for  clear and transparent royalty                                                                    
     and taxation purposes.                                                                                                     
                                                                                                                                
CHAIR OGAN  commented that Mead  Treadwell [who had  testified on                                                               
HCR 8  that day]  had described  that as  moving the  wellhead to                                                               
wherever the  hub is.  Noting  that Amerada Hess, in  years past,                                                               
had tracked every single drop of  oil and every shipment in order                                                               
to settle  royalty disputes  because the  laws and  policies were                                                               
ambiguous, Chair  Ogan emphasized  the desire to  avoid ambiguity                                                               
and  contentiousness with  the producers  by getting  transparent                                                               
royalty and taxation policies.                                                                                                  
                                                                                                                                
CHAIR  OGAN suggested  perhaps the  hub  to Fairbanks  is a  good                                                               
idea.   He restated his intention  of working on the  hub policy,                                                               
if it is the  will of the committee.  In  response to a question,                                                               
he  said  the  following  Friday there  would  be  testimony  and                                                               
lengthy discussion about [Version L].                                                                                           
                                                                                                                                
Number 0025                                                                                                                     
                                                                                                                                
REPRESENTATIVE  DYSON expressed  hope  that the  administration's                                                               
representatives would be present.                                                                                               
                                                                                                                                
CHAIR OGAN indicated his office would make that request.                                                                        
                                                                                                                                
TAPE 01-22, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
REPRESENTATIVE GUESS announced that  she and Representative Joule                                                               
would be  in a  House Special Committee  on Education  hearing on                                                               
Friday and  would, therefore,  defer to the  wisdom of  the other                                                               
members.                                                                                                                        
                                                                                                                                
REPRESENTATIVE DYSON commended the chair  for choosing to work on                                                               
this during  the interim,  and for  being proactive,  rather than                                                               
just responding  to what is going  on in the marketplace  in that                                                               
industry.   He  offered  to use  some of  his  office account  to                                                               
assist  Representative  Joule   in  attending  interim  meetings,                                                               
should there be no funding for the committee during the interim.                                                                
                                                                                                                                
                                                                                                                                
CHAIR OGAN  suggested the need  to discuss with the  leadership a                                                               
bit of a budget to facilitate this.   He said he would like to be                                                               
that proactive facilitator.                                                                                                     
                                                                                                                                
REPRESENTATIVE  DYSON  proposed  that the  committee  should  put                                                               
together what they foresee as being  in the best interests of the                                                               
state, and  then say to  the industry, "If  you can top  this, go                                                               
for it."   He characterized the  industry as the goose  that lays                                                               
the golden egg for the state.                                                                                                   
                                                                                                                                
[HB 83 was held over.]