Legislature(2007 - 2008)SENATE FINANCE 532

03/24/2007 01:00 PM OIL & GAS

Audio Topic
01:07:50 PM Start
01:09:32 PM SB104|| HB177
02:30:30 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time & Location Change --
Joint with Senate Resources Committee
+= HB 177 NATURAL GAS PIPELINE PROJECT TELECONFERENCED
-- Public Testimony --
Along with companion bill SB 104
              SB 104-NATURAL GAS PIPELINE PROJECT                                                                           
              HB 177-NATURAL GAS PIPELINE PROJECT                                                                           
                                                                                                                                
1:09:32 PM                                                                                                                    
                                                                                                                                
CHAIR HUGGINS  announced the committee  would hear SB 104  and HB                                                               
177.                                                                                                                            
                                                                                                                                
MERRICK PIERCE,  representing himself,  said that  the producers'                                                               
legal   departments  are   only   dedicated   to  profit;   their                                                               
purposefully filing frivolous  lawsuits prevents competitors from                                                               
shipping gas. To reduce the  threat of litigation the legislature                                                               
should evaluate  whether the AGIA inducements  could be optional.                                                               
Applicants  may   decide  that  they  don't   need  the  included                                                               
exemptions,  and  they'll  be  able  to  pick  and  choose  their                                                               
inducements.  Multi-national  corporations  don't  want  a  level                                                               
playing  field  among  applicants,  and  unless  the  legislature                                                               
amends the constitution it appears  that big oil isn't interested                                                               
in a project.                                                                                                                   
                                                                                                                                
He  added  that   many  people  already  feel   distrust  in  the                                                               
legislators,  particularly those  involved with  gas legislation.                                                               
The voters'  overwhelming preference  for Governor Palin  and her                                                               
promises of transparency should be accounted for.                                                                               
                                                                                                                                
1:13:09 PM                                                                                                                    
                                                                                                                                
JIM SYKES, representing  himself, said that he likes  the idea of                                                               
the bill; the state is on  the right track at long last. However,                                                               
he  is concerned  about how  the  project will  be evaluated.  He                                                               
agreed  that the  tax rates  and inducements  should be  flexible                                                               
rather than mandated.  Exxon's wish for a  45-year term shouldn't                                                               
be in the cards. The first  open season can be made successful by                                                               
leaving  options open.  Governor Hickel's  historic actions  with                                                               
oil companies are a good model;  it is Alaska's gas and the state                                                               
has control.                                                                                                                    
                                                                                                                                
He  added that  another concern  of  his is  triple damages;  the                                                               
issue needs closer examination.                                                                                                 
                                                                                                                                
1:19:11 PM                                                                                                                    
                                                                                                                                
CHAIR  HUGGINS noted  that Representatives  Crawford and  Samuels                                                               
were present.                                                                                                                   
                                                                                                                                
1:19:32 PM                                                                                                                    
                                                                                                                                
ZEB  WOODMAN,  with the  Laborers  Local  942,  said that  he  is                                                               
interested in  including AGIA language  for Alaskans  being hired                                                               
for the project; time will be  needed to train rural Alaskans for                                                               
the jobs,  and consistency in  wages and conditions  is important                                                               
to level the playing field between union and non-union workers.                                                                 
                                                                                                                                
1:21:05 PM                                                                                                                    
                                                                                                                                
JEAN WOODS, representing herself, said  that there is no doubt of                                                               
the need  for gas for  in-state use.  Her biggest concern  is the                                                               
process  for   the  choice   of  the   contract  winner   by  the                                                               
commissioners and  legislature. She said that  industry is taking                                                               
the  risk in  the  project,  and that  politicians  won't be  re-                                                               
elected if things don't go well.                                                                                                
                                                                                                                                
1:23:16 PM                                                                                                                    
                                                                                                                                
BOB MORIGEAU,  District 6 representative for  International Union                                                               
of Operating  Engineers Local 302, explained  his suggestions for                                                               
the pipeline  project labor  agreement (PLA),  including ensuring                                                               
local  and  minority  hire,  apprenticeships,  training  centers,                                                               
certain  labor  dispute   procedures,  and  standardized  working                                                               
conditions.  Such a  labor agreement  will give  local workers  a                                                               
better chance of hire, unlike with the oil pipeline project.                                                                    
                                                                                                                                
1:26:30 PM                                                                                                                    
                                                                                                                                
JAMES  GENGLER, International  Brotherhood of  Electrical Workers                                                               
Local (IBEW)  1547, said that  he teaches electrical  workers and                                                               
advocates education  for workers,  and that  union apprenticeship                                                               
programs  ensure   lower-cost  apprenticeship   availability  and                                                               
successful, timely project completion.                                                                                          
                                                                                                                                
He gave  examples of PLAs for  the oil pipeline and  Fort Greeley                                                               
construction   projects,  and   urged  the   negotiation  of   an                                                               
appropriate PLA of the gasline project.                                                                                         
                                                                                                                                
1:30:12 PM                                                                                                                    
                                                                                                                                
STEPHANIE THOMPSON,  IBEW Local  1547, Anchorage,  explained that                                                               
she is  an apprentice  who is  receiving excellent  training, and                                                               
supports a PLA for the pipeline project.                                                                                        
                                                                                                                                
1:32:13 PM                                                                                                                    
                                                                                                                                
GARY JOHNSON, IBEW Local 1547,  talked about his work history and                                                               
said he  agrees that apprenticeship programs  are well structured                                                               
and  offer opportunities  and  training to  people  all over  the                                                               
state;  it's  important  that  a  PLA be  used  in  the  pipeline                                                               
project. He  is confident the  legislature will do what  is right                                                               
for Alaskans.                                                                                                                   
                                                                                                                                
1:35:39 PM                                                                                                                    
                                                                                                                                
JOHN GARRET,  Sheetmetal Workers International  Association Local                                                               
23,  spoke in  support of  a project  labor agreement  and talked                                                               
about his  organization's history in  the state and  its outreach                                                               
programs; it's looking forward to helping build the pipeline.                                                                   
                                                                                                                                
1:37:20 PM                                                                                                                    
                                                                                                                                
DOUG BUCKLEY,  IBEW Local 1547,  talked about  his organization's                                                               
history in  the state and emphasized  the necessity of a  PLA for                                                               
the pipeline project.                                                                                                           
                                                                                                                                
1:38:32 PM                                                                                                                    
                                                                                                                                
MIKE KENNEY,  representing himself, said  that he likes  AGIA and                                                               
thinks it is important that  the state's resource is developed by                                                               
a local team;  big oil has other projects around  the world. It's                                                               
better to keep the project as  an all-Alaskan line than to depend                                                               
on  Canada,  and   moving  in  a  timely  manner   is  of  utmost                                                               
importance.                                                                                                                     
                                                                                                                                
1:46:00 PM                                                                                                                    
                                                                                                                                
BILL WARREN, representing himself, said  that he hopes there will                                                               
be  a project  labor  agreement like  that  for the  Trans-Alaska                                                               
Pipeline.  He  was  disappointed   by  the  Exxon  testimony  the                                                               
previous day,  and said  he advocates  immediate instate  use and                                                               
supports AGIA.                                                                                                                  
                                                                                                                                
1:48:19 PM                                                                                                                    
                                                                                                                                
PAUL  KENDALL, representing  himself, said  that leaders  need to                                                               
maintain control of the project  and correct contract defects. He                                                               
accused the oil company representatives  of being hypnotists, and                                                               
said that  there's a difference  between being courted  and being                                                               
surrounded. He  offered to work  for free  on the project  for 30                                                               
days, because it  is his belief that Alaska ought  to draw on its                                                               
own  resources;   he  reiterated  his  distaste   for  the  major                                                               
producers.                                                                                                                      
                                                                                                                                
1:55:12 PM                                                                                                                    
                                                                                                                                
DAN  APTED, representing  himself, said  that he  is against  oil                                                               
companies enacting structure to lock  in tax rates. The line will                                                               
happen  if the  economics are  there but  the legislature  should                                                               
fund  a state  study  of  getting gas  to  market by  alternative                                                               
means, by railroad for example; it  would cost less and be useful                                                               
for other commodities. A "plan B" should be considered.                                                                         
                                                                                                                                
2:00:58 PM                                                                                                                    
                                                                                                                                
JOMO  STEWART, representing  himself, said  that goals  determine                                                               
strategy, and  AGIA contains a  list of those;  they're Alaskans'                                                               
attempt  to  define maximum  benefit,  which  should account  for                                                               
increasing  the standard  of living,  advancing the  economy, and                                                               
allowing free competition in the private enterprise system.                                                                     
                                                                                                                                
He asked the legislators to see  the pipeline process for what it                                                               
is, and to look  at history to see how this has  been done in the                                                               
past. At this  point in Alaskan history, it  would behoove policy                                                               
makers to avoid placing too much money into the general fund.                                                                   
                                                                                                                                
CHAIR HUGGINS  announced that  there were  no more  testifiers at                                                               
the time,  and that Conoco-Phillips testimony  would be continued                                                               
later. He told  a personal story, and then announced  a brief at-                                                               
ease.                                                                                                                           
                                                                                                                                
2:23:57 PM                                                                                                                    
                                                                                                                                
CHAIR HUGGINS called the meeting back to order.                                                                                 
                                                                                                                                
2:24:24 PM                                                                                                                    
                                                                                                                                
MIKE NOTAR, President of the  Juneau and Vicinity Building Trades                                                               
Council,  related the  history of  PLAs in  Juneau and  said that                                                               
they have  saved the town money  and put money in  the pockets of                                                               
taxpayers. The jobs  done under PLAs have been under  or close to                                                               
budget and  have provided  Juneau with the  only legal  method of                                                               
ensuring that  firms hire  local workers.  Stipulating a  PLA for                                                               
AGIA would be in the public interest.                                                                                           
                                                                                                                                
2:27:36 PM                                                                                                                    
                                                                                                                                
CHAIR KOHRING asked what  a PLA is and how it  would be a benefit                                                               
to the pipeline project.                                                                                                        
                                                                                                                                
MR. NOTAR replied that it is  a contract between laborers and the                                                               
unions that  provides certainty  and predictability,  and defines                                                               
conditions under which the work will be performed.                                                                              
                                                                                                                                
CHAIR KOHRING commented there are  skilled labor pools in Alaska,                                                               
and   thanked  Chair   Huggins   for  his   cooperation  on   the                                                               
legislation.                                                                                                                    
                                                                                                                                
CHAIR  HUGGINS noted  that Representative  Neuman had  joined the                                                               
meeting earlier,  and, there  being no  further business  to come                                                               
before the committee, he adjourned the meeting at 2:30:30 PM.                                                                 
                                                                                                                                
                                                                                                                                

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