Legislature(2003 - 2004)
03/15/2004 01:07 PM House RES
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
HB 417-AK NATURAL GAS DEV. AUTHORITY INITIATIVE CO-CHAIR MASEK announced that the next order of business would be HOUSE BILL NO. 417, "An Act amending the definition of 'project' in the Act establishing the Alaska Natural Gas Development Authority; and providing for an effective date." Number 0960 REPRESENTATIVE MIKE CHENAULT, Alaska State Legislature, sponsor, explained that HB 417 amends the definition of "project" to include all options for a terminus of the Alaska natural gas pipeline. This specifically identifies Cook Inlet as a possibility for a terminus. Number 0993 REPRESENTATIVE CHENAULT, in response to Representative Guttenberg, said this would give the Alaska Natural Gas Development Authority (ANGDA) the ability to look at the Cook Inlet basin as a possible terminus, rather than only looking at Prince William Sound as a possible terminus. Number 1049 HAROLD HEINZE, Chief Executive Officer, Alaska Natural Gas Development Authority, explained that Ballot Measure 3, passed in 2002, defines what a "project" is. It specifically includes not only a [main natural gas pipeline] to Valdez, but also a spur line from Glennallen to the Cook Inlet area. Mr. Heinze noted that he'd provided information to demonstrate that ANGDA has been looking at Cook Inlet and has considered delivering gas into the Cook Inlet area, which is one of ANGDA's most important responsibilities and benefits offered to Alaska. He said his understanding of the bill is that it would instruct ANGDA in looking at its development-plan work targeted for June 15, to expand its [options] for a terminus to specifically include a pipeline directly to a Cook Inlet port. MR. HEINZE said the level of detail it takes to address that kind of a routing between now and June 15 is going to be a little tricky. He said ANGDA has mainly been using the work that relates to the Yukon Pacific [Corporation]] effort that went down the Trans-Alaska Pipeline. In looking at the feasibility of the project, he said, he isn't uncomfortable with looking at Cook Inlet in a feasibility sense. He said the engineering technical data, in particular, the environmental permitting issues related to that, would be difficult for ANGDA to assess in the short amount of time available. Number 1197 STEVEN PORTER, Deputy Commissioner, Department of Revenue (DOR), explained that DOR and the state have looked at ANGDA as the entity to look at all of the in-state gas use, and is looking at bringing gas to Cook Inlet and other areas throughout the state. He said DOR doesn't consider this legislation to be inconsistent with that. Mr. Porter mentioned the broader economics of bringing gas to Cook Inlet versus Valdez, barring the permitting and the environmental issues. He said the basic economics of those two areas are so similar that research on one area fairly well much applies to the other area in terms of the overall economics of an LNG [liquefied natural gas] project. The permitting and environmental work on each element, including the spur line from Glennallen to Anchorage, would require some additional work on behalf of the authority to solve and answer those problems. Number 1277 REPRESENTATIVE KERTTULA asked how much of an extra workload this could result in, and if that was being taken into account with respect to ANGDA's budget. MR. HEINZE explained that based on what had been looked at thus far, regardless of a route, there hasn't been a lot of difference in the numbers relating to where and how gas is brought to tidewater in Alaska. He said in terms of the early feasibility phase [ANGDA] is currently in, it isn't seen as necessary to differentiate, fairly exactly, those different options at this point; to do that would require little to no additional work, but a more definitive choice between the two areas would require considerable work and time. He indicated no additional effort or funding is required in looking at the two locations indeterminately, but said to make the choice between the two locations would require considerably more effort than is included in ANGDA's funding. Number 1388 REPRESENTATIVE STEPOVICH asked why Cook Inlet wasn't included originally. MR. HEINZE said he had nothing to do with Ballot Measure 3. He explained that the project's sponsors had chosen what was felt to be the most executable project at the time. He said the value of the permitting already done on the route to Valdez is extremely significant with regard to the [June 15 deadline] and all of the other issues. However, [ANGDA] is aware that ConocoPhillips Alaska, Inc., and BP, in conjunction with several others, have looked at a more direct route to Cook Inlet. Saying [ANGDA] has never seen the work and has no knowledge of it, he indicated he'd feel much better about moving quickly and about what the problems are if he could see the work. Number 1502 REPRESENTATIVE GUTTENBERG asked if there was any reason to exclude other possibilities for other routes. MR. PORTER said the governor has stated interest in looking at all the different options for economic marketability for the gas, so there isn't a reason to exclude any option that may become an economically viable project. Number 1551 CO-CHAIR DAHLSTROM moved to report HB 417 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, HB 417 was reported from the House Resources Standing Committee.
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