Legislature(2009 - 2010)BARNES 124

03/10/2010 01:00 PM RESOURCES


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Continued at 6:00 pm --
+= HB 308 OIL AND GAS PRODUCTION TAX TELECONFERENCED
Heard & Held
*+ HB 337 OIL AND GAS PROD. TAX: CREDITS/INTEREST TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 369 IN-STATE PIPELINE MANAGER/TEAM/COMMITTEE TELECONFERENCED
Moved CSHB 369(RES) Out of Committee
           HB 369-IN-STATE PIPELINE/COORDINATOR /TEAM                                                                       
                                                                                                                                
7:18:54 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NEUMAN  announced that  the third  order of  business is                                                               
HOUSE BILL NO.  369, "An Act relating to an  in-state natural gas                                                               
pipeline,  the office  of in-state  gasline project  manager, the                                                               
Joint  In-State  Gasline  Development   Team,  and  the  In-State                                                               
Gasline  Steering  Committee;  and  providing  for  an  effective                                                               
date."    [Before  the  committee was  Version  E,  the  proposed                                                               
committee  substitute  for  HB 308,  labeled  26-LS1527\E,  Cook,                                                               
3/2/10.]                                                                                                                        
                                                                                                                                
7:19:08 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOHNSON  moved  the  committee  adopt  a  new  proposed                                                               
committee  substitute  for  HB 308,  labeled  26-LS1527\S,  Cook,                                                               
3/10/10 ("Version S"), as the working document.                                                                                 
                                                                                                                                
CO-CHAIR NEUMAN objected for explanation purposes.                                                                              
                                                                                                                                
TOM  WRIGHT, Staff,  Representative Mike  Chenault, Alaska  State                                                               
Legislature,  explained   that  the  changes   incorporated  into                                                               
Version S  are mostly  deletions of  items from  Version E.   The                                                               
provision  for   an  In-state  Gasline  Steering   Committee  was                                                               
removed,  the duties  of  the steering  committee  were moved  to                                                               
subsection (a)  of the provision  for the Joint  In-state Gasline                                                               
Development  Team,  and  the conflicts  of  interest  and  ethics                                                               
provision for steering committee members was removed.                                                                           
                                                                                                                                
7:20:15 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN asked  whether Representative  Seaton's concerns                                                               
are addressed by Version S.                                                                                                     
                                                                                                                                
MR. WRIGHT responded  he would prefer to let  the sponsor discuss                                                               
those concerns later.                                                                                                           
                                                                                                                                
CO-CHAIR  JOHNSON  inquired  why  the provision  for  a  steering                                                               
committee was removed.                                                                                                          
                                                                                                                                
MR.  WRIGHT replied  a  number of  members  thought the  steering                                                               
committee would  be somewhat cumbersome.   The reason  for having                                                               
the  steering  committee  provision  was to  ensure  good  public                                                               
participation in the development of  the gasline.  Removal of the                                                               
committee   does  not   preclude  the   Joint  In-state   Gasline                                                               
Development Team  from calling  on others  with the  expertise or                                                               
calling  on  affected  communities  when the  need  arises.    In                                                               
response  to Co-Chair  Neuman, he  added that  the sponsor  hopes                                                               
there will be a lot of public participation in this process.                                                                    
                                                                                                                                
7:22:27 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NEUMAN removed his objection  to Version S.  There being                                                               
no further objection, Version S was before the committee.                                                                       
                                                                                                                                
The committee took an at-ease from 7:23 p.m. to 7:24 p.m.                                                                       
                                                                                                                                
7:25:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  moved  Amendment  1  written  as  follows                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
     Page 3, line 18, following "communities,":                                                                                 
          Insert "the cost of transporting natural gas to                                                                       
     other locations in the state,"                                                                                             
                                                                                                                                
     Page 3, line 26, following "tidewater":                                                                                    
          Insert "in the state and to other locations in                                                                        
     the state"                                                                                                                 
                                                                                                                                
     Page 5, line 5, following "state":                                                                                         
          Insert "and to other locations in the state"                                                                          
                                                                                                                                
CO-CHAIR JOHNSON objected for discussion purposes.                                                                              
                                                                                                                                
REPRESENTATIVE SEATON explained that  the proposed Joint In-state                                                               
Gasline  Development Team  would exist  for quite  some time  and                                                               
after  a North  Slope  pipeline is  constructed  to tidewater,  a                                                               
number of in-state gaslines may  be developed.  Amendment 1 would                                                               
give  this team  the authority  to look  at these  other in-state                                                               
pipelines  to  provide natural  gas  to  residents at  reasonable                                                               
cost.   He said there  are three different places  where language                                                               
would be inserted into Version S.                                                                                               
                                                                                                                                
7:27:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON, in  response  to  Co-Chair Neuman,  noted                                                               
that the  first insertion on page  3, line 18, does  not mean the                                                               
state would be  subsidizing; rather the state  would be computing                                                               
and looking at plans for delivery and costs.                                                                                    
                                                                                                                                
REPRESENTATIVE MIKE  CHENAULT, Alaska State  Legislature, sponsor                                                               
of HB  369, stated that  while he supports  the idea of  the cost                                                               
for  transportation, he  is concerned  that it  would dilute  the                                                               
major focus of costing out an  in-state gasline so that it can be                                                               
moved  forward.   The provisions  of  Amendment 1  would need  to                                                               
become a  part of the  process if  this process does  go forward,                                                               
but  now may  not be  the  right time  to  include them.   He  is                                                               
concerned about  spending time  and effort  to study  these other                                                               
transmission lines rather  than getting to the real  problem of a                                                               
main line for in-state gas.                                                                                                     
                                                                                                                                
7:29:51 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NEUMAN surmised  it is the sponsor's intent  that once a                                                               
big in-state  gasline is developed,  gas be delivered to  as many                                                               
communities as possible.                                                                                                        
                                                                                                                                
REPRESENTATIVE CHENAULT answered correct.                                                                                       
                                                                                                                                
REPRESENTATIVE  SEATON argued  that Amendment  1 does  not dilute                                                               
anything, given all the team duties  that are outlined on page 3,                                                               
starting at  line 11..  The  intent and structure of  Amendment 1                                                               
is  for after  an in-state  gasline is  built, so  its provisions                                                               
would not come ahead of building a gas pipeline.                                                                                
                                                                                                                                
7:32:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CHENAULT  reiterated  his  agreement  with  where                                                               
Representative Seaton is  headed because, in time,  every area of                                                               
the state  will need to  be looked at.   However, his  concern is                                                               
that  the state  must first  focus on  developing and  building a                                                               
main line before looking at the other options.                                                                                  
                                                                                                                                
CO-CHAIR JOHNSON added that the reason  for HB 369 is because the                                                               
state has  taken its eye  off building  an in-state gasline.   He                                                               
said Amendment 1 did not concern  him at first, but after hearing                                                               
the  sponsor's  concern  he must  agree  about  staying  focused,                                                               
although he, too, supports where Representative Seaton is going.                                                                
                                                                                                                                
CO-CHAIR  NEUMAN offered  his  support  for where  Representative                                                               
Seaton is going, but said he agrees with staying focused.                                                                       
                                                                                                                                
7:34:41 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOHNSON  moved that  Amendment 1  be divided  into three                                                               
parts:   lines  1  and 2  becoming  Amendment 1,  lines  4 and  5                                                               
becoming Amendment 2, and lines 7 and 8 becoming Amendment 3.                                                                   
                                                                                                                                
REPRESENTATIVE  SEATON said  he  would consider  that a  friendly                                                               
amendment.                                                                                                                      
                                                                                                                                
CO-CHAIR  NEUMAN  opened  discussion  on  the  new  Amendment  1,                                                               
consisting of  lines 1 and  2 of  former Amendment 1,  written as                                                               
follows [original punctuation provided]:                                                                                        
                                                                                                                                
     Page 3, line 18, following "communities,":                                                                                 
          Insert "the cost of transporting natural gas to                                                                       
     other locations in the state,"                                                                                             
                                                                                                                                
7:35:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON said that if the  bill does not look at the                                                               
communities he represents,  then they will be out  of the picture                                                               
forever because there would be  no authorization in statute to do                                                               
so subsequent to completion of  the main in-state gasline.  Thus,                                                               
he would like to request that lines  16-18 on page 3 of Version S                                                               
be deleted, because  they would also deflect from  the main focus                                                               
of constructing an  in-state gasline.  He noted  that lines 16-18                                                               
do exactly the  same thing for other communities in  the state as                                                               
Amendment 1 would do for his communities.                                                                                       
                                                                                                                                
7:37:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  OLSON  inquired  whether  Homer  and  Seward  are                                                               
considered coastal communities.                                                                                                 
                                                                                                                                
REPRESENTATIVE SEATON  offered his  belief that  the construction                                                               
of  line  18,  page  3,  Version  S,  "Yukon  river  and  coastal                                                               
communities"  would  probably be  tied  together  as the  coastal                                                               
communities along  the Yukon River.   Additionally,  the pipeline                                                               
specified in  line 18  is for liquefied  natural gas  or propane,                                                               
not natural gas.                                                                                                                
                                                                                                                                
7:38:00 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOHNSON  inquired   whether  Representative  Seaton  is                                                               
looking for propane to go to his communities as well.                                                                           
                                                                                                                                
REPRESENTATIVE SEATON reiterated that  the coastal communities on                                                               
line 18  are in  reference to liquefied  natural gas  or propane.                                                               
His communities would be served  by a transmission pipeline after                                                               
a mainline  has been  built from  the North  Slope and  ties into                                                               
Southcentral.   If it is  being said that the  parallel language,                                                               
"the cost  of transporting  natural gas  to other  locations", is                                                               
superfluous and  detrimental to a  pipeline, then the  same could                                                               
also  be  said of  the  language  on  lines 16-18  which  states,                                                               
"delivery  and costs  of  natural gas  to  communities along  the                                                               
pipeline route,  manufacturing opportunities  for gas-to-liquids,                                                               
plans for delivery and costs  of liquefied natural gas or propane                                                               
to Yukon river and coastal communities".                                                                                        
                                                                                                                                
7:39:30 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NEUMAN  stated that  lines 16-18  relate to  being along                                                               
the way of a main in-state gasline.                                                                                             
                                                                                                                                
CO-CHAIR  JOHNSON removed  his objection  to Amendment  1, saying                                                               
the more this has been explained to him the more he likes it.                                                                   
                                                                                                                                
CO-CHAIR NEUMAN objected to Amendment 1.                                                                                        
                                                                                                                                
REPRESENTATIVE  CHENAULT, after  looking at  how lines  16-18 are                                                               
written,  said he  can  more or  less  agree with  Representative                                                               
Seaton.   He  changed  his objection  and  accepted Amendment  1,                                                               
saying he does  not want members of the  legislature or residents                                                               
of Alaska to feel shortchanged.                                                                                                 
                                                                                                                                
CO-CHAIR NEUMAN withdrew  his objection.  There  being no further                                                               
objection, Amendment 1 was adopted.                                                                                             
                                                                                                                                
7:41:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  moved  Amendment  2  written  as  follows                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
     Page 3, line 26, following "tidewater":                                                                                    
          Insert "in the state and to other locations in                                                                        
     the state"                                                                                                                 
                                                                                                                                
REPRESENTATIVE  SEATON  explained  there was  earlier  discussion                                                               
about whether  tidewater could  be a  Canadian port  or something                                                               
else.   Amendment  2 clarifies  that "tidewater"  is a  tidewater                                                               
port in the state as well as other locations in the state.                                                                      
                                                                                                                                
7:42:53 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NEUMAN  noted that the duty  of the team is  to consider                                                               
all aspects.   He asked  how far  out those duties  would extend;                                                               
for  example, tankers  associated  with a  liquefied natural  gas                                                               
(LNG) facility.                                                                                                                 
                                                                                                                                
REPRESENTATIVE CHENAULT,  in regard to Amendment  2, said Version                                                               
S states to  select a route for an in-state  natural gas pipeline                                                               
from  the North  Slope to  tidewater.   It is  his intention  the                                                               
completion  of that  pipeline is  at  tidewater in  the state  of                                                               
Alaska and not in Canada or elsewhere.                                                                                          
                                                                                                                                
7:44:12 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN   related  that  "Shell"  intends   to  put  LNG                                                               
facilities  on floating  platforms.   He  presumed the  sponsor's                                                               
intent  is not  to have  a floating  platform for  an LNG  export                                                               
facility in  the northwestern corner  of the state, but  to bring                                                               
gas to the core area of the state through the Railbelt.                                                                         
                                                                                                                                
REPRESENTATIVE CHENAULT responded his  intent is tidewater in the                                                               
Southcentral  region  of the  state.    He  said  it is  not  the                                                               
intention  of HB  369 to  go to  the Bering  Sea in  any form  or                                                               
fashion with  the main pipeline.   Additionally, he  believes any                                                               
ports in  the Chukchi or  Beaufort seas  would be too  shallow to                                                               
accommodate  an LNG  tanker.   In  further  response to  Co-Chair                                                               
Neuman, he said  that when originally proposed,  the in-state gas                                                               
pipeline was  to go to  Valdez because  that is a  deepwater port                                                               
that can  handle tankers large  enough to economically  carry the                                                               
LNG all  over the  world.  Cook  Inlet is not  as deep  as Prince                                                               
William Sound, which requires the  use of smaller tankers for the                                                               
LNG facility that is shipping to Japan.                                                                                         
                                                                                                                                
There being no objection, Amendment 2 was adopted.                                                                              
                                                                                                                                
REPRESENTATIVE SEATON elected not to offer Amendment 3.                                                                         
                                                                                                                                
7:48:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KAWASAKI moved to adopt Amendment 4 written as                                                                   
follows [original punctuation provided]:                                                                                        
                                                                                                                                
     Page 3, line 22:                                                                                                           
          Delete "by July 1, 2011, and take actions                                                                             
     necessary"                                                                                                                 
                                                                                                                                
     Page 3, line 23:                                                                                                           
          Delete "2015."                                                                                                        
          Insert "2016.  The development team shall make a                                                                      
     commercial offering  by July 1,  2011.   The commercial                                                                    
     offering must consist of the  issuance of a request for                                                                    
     proposals  to potential  in-state natural  gas pipeline                                                                    
     project  developers  who  will  own the  project  or  a                                                                    
     portion of it.  The  request for proposals must require                                                                    
     that commercial  evaluations in the proposals  be based                                                                    
     on engineering  and permitting  completed by  the state                                                                    
     and   its  contractors   and  that   proposals  include                                                                    
     reimbursement  for the  cost incurred  by the  state of                                                                    
     engineering work  and gathering and  interpreting data.                                                                    
     The  request for  proposals  must  include notice  that                                                                    
     proposals will be analyzed by  the state, together with                                                                    
     terms and  conditions for  selection.   The development                                                                    
     team shall  report to the  legislature on the  date the                                                                    
     commercial offering is ready."                                                                                             
                                                                                                                                
     Page 4, line 8:                                                                                                            
          Delete "for construction of"                                                                                          
          Insert "to meet construction deadlines for"                                                                           
                                                                                                                                
     Page 4, line 15:                                                                                                           
          Delete "by July 1, 2011, and report to the                                                                            
     legislature by that date"                                                                                                  
          Insert "to enable natural gas to flow down the                                                                        
     pipeline by 2016"                                                                                                          
                                                                                                                                
CO-CHAIR JOHNSON objected.                                                                                                      
                                                                                                                                
7:48:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KAWASAKI explained that  Amendment 4 is similar to                                                               
an amendment  to Version  E that was  offered [and  withdrawn] by                                                               
Co-Chair Johnson on [3/8/10].   He said Amendment 4 is conforming                                                               
language as  mentioned by Mr.  Bob Swenson, In-state  Gas Project                                                               
Manager  [on  3/8/10].   The  amendment  would require  that  the                                                               
entity  building  the  pipeline   reimburse  the  state  for  its                                                               
engineering costs.                                                                                                              
                                                                                                                                
CO-CHAIR JOHNSON maintained his objection to Amendment 4.                                                                       
                                                                                                                                
7:50:04 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN said  he strongly  objects to  Amendment 4.   He                                                               
recalled that during discussions on  [3/8/10] there was a problem                                                               
with  the word  must.   If  the state  must  receive 100  percent                                                               
reimbursement  of its  engineering expenses  through purchase  of                                                               
the permits for the pipeline, and  the purchase offer does not do                                                               
this, then  this pipeline could not  happen.  He argued  that the                                                               
purchaser will be  spending billions of its own  dollars to build                                                               
the gasline and diversify the  state's economy; thus, it does not                                                               
hurt  the state  to have  its  own money  in the  game, which  is                                                               
something that states and communities do all around the world.                                                                  
                                                                                                                                
7:52:37 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOHNSON agreed with Co-Chair  Newman, saying Amendment 4                                                               
could exclude  a viable builder  of the in-state pipeline.   This                                                               
should be a  decision that is made by members  of the legislature                                                               
at that time  should the purchase offer not be  for a 100 percent                                                               
reimbursement.  He  said he wants to send the  signal that Alaska                                                               
is invested in  this project and wants to make  it happen.  There                                                               
could be negotiations  at the time to get the  money back through                                                               
tariffs.  He said he objects  to Amendment 4 for the same reasons                                                               
he had on [3/8/10].                                                                                                             
                                                                                                                                
7:53:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON,  on  behalf of  Representative  Chenault,                                                               
moved friendly Amendment 1 to Amendment 4, as follows:                                                                          
                                                                                                                                
     Line 13:                                                                                                                   
          Delete "state"                                                                                                        
          Insert "Joint [In-state] Gasline Development                                                                          
     Team"                                                                                                                      
                                                                                                                                
CO-CHAIR  NEUMAN  objected,  reiterating his  opposition  to  the                                                               
requirement that the  state be reimbursed for 100  percent of its                                                               
expenses.  In  response to Representative Seaton,  he removed his                                                               
objection  to Amendment  1  to Amendment  4,  but maintained  his                                                               
objection to Amendment 4.                                                                                                       
                                                                                                                                
There  being  no  objection,  Amendment  1  to  Amendment  4  was                                                               
adopted.                                                                                                                        
                                                                                                                                
7:57:28 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN  said  his interpretation  of  Amendment  4,  as                                                               
amended,  is  that if  the  state  does  not receive  a  purchase                                                               
proposal  that   provides  100   percent  reimbursement   of  its                                                               
expenses, the in-state project will not go forward.                                                                             
                                                                                                                                
CO-CHAIR JOHNSON said  he does not read the  amendment quite like                                                               
that, although he  did at first and for which  he apologizes.  He                                                               
pointed out  that the language  says "include  reimbursement"; it                                                               
does not say full reimbursement.   Thus, a proposal of just $1 in                                                               
reimbursement would qualify.                                                                                                    
                                                                                                                                
CO-CHAIR NEUMAN  said he  would be more  comfortable with  line 9                                                               
stating "may" require instead of "must" require.                                                                                
                                                                                                                                
REPRESENTATIVE CHENAULT agreed with Co-Chair Neuman.                                                                            
                                                                                                                                
8:00:32 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOHNSON said  it is important to retain  the word "must"                                                               
on  line 9  to ensure  proposals are  based upon  engineering and                                                               
sound  economics.   He suggested  the word  "may" be  inserted on                                                               
line 11 after "proposals" because  that would accomplish the same                                                               
goal  of   not  requiring  full  reimbursement   of  the  state's                                                               
expenses, but  still requiring that  the commercial  proposals be                                                               
based upon  the state's engineering  and permitting.   He offered                                                               
Amendment 2 to Amendment 4 as follows:                                                                                          
                                                                                                                                
     Line 11, after "proposals":                                                                                                
          Insert "may"                                                                                                          
                                                                                                                                
REPRESENTATIVE KAWASAKI  accepted the amendment.   There being no                                                               
objection, Amendment 2 to Amendment 4 was adopted.                                                                              
                                                                                                                                
8:03:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  P.  WILSON   asked  why  Representative  Kawasaki                                                               
believes  the   following  language  needs  to   be  included  in                                                               
Amendment 4:   "proposals may include reimbursement  for the cost                                                               
incurred  by the  state  of engineering  work  and gathering  and                                                               
interpreting data."                                                                                                             
                                                                                                                                
REPRESENTATIVE KAWASAKI replied  the state spends a  lot of money                                                               
collecting data  that is utilized  by the public, such  as aerial                                                               
mapping  and right  of way  information.   Since public  money is                                                               
being used for  this project, it is fair to  ask that the private                                                               
company undertaking  this project repay  the state in  return for                                                               
receiving valuable information.                                                                                                 
                                                                                                                                
8:06:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON   added  he   is  more   comfortable  with                                                               
Amendment  4 as  now amended  because the  word "may"  allows the                                                               
latitude  to not  collect full  reimbursement should  the project                                                               
not be fully economic.                                                                                                          
                                                                                                                                
REPRESENTATIVE OLSON inquired whether  the maker of the amendment                                                               
objected  to the  Alaska Gasline  Inducement  Act's $500  million                                                               
signing bonus.                                                                                                                  
                                                                                                                                
REPRESENTATIVE KAWASAKI answered he does not remember.                                                                          
                                                                                                                                
8:07:43 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOHNSON  moved Amendment  3 to  Amendment [4]  to delete                                                               
lines 1-2.                                                                                                                      
                                                                                                                                
REPRESENTATIVE KAWASAKI objected.                                                                                               
                                                                                                                                
CO-CHAIR JOHNSON  opined that removal  of the deadline  date from                                                               
HB  369  would  soften  the urgency  of  building  the  pipeline.                                                               
Pressure needs to be continued  and the team needs empowerment to                                                               
move as quickly and expeditiously as possible.                                                                                  
                                                                                                                                
CO-CHAIR  NEUMAN agreed,  saying  the  purpose of  HB  369 is  to                                                               
provide dates  and ensure that  work toward a  pipeline continues                                                               
as fast as possible.  He  would like to see construction ready by                                                               
July  1,  2011; therefore,  he  wants  to  see deadlines  and  an                                                               
aggressive timeline.                                                                                                            
                                                                                                                                
8:09:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CHENAULT, in  response to  Representative Seaton,                                                               
said Amendment  4 is the  same as an  amendment that was  seen on                                                               
[3/8/10], and it would delay the  project.  He said he objects to                                                               
Amendment  4 and  agrees with  the co-chair  about moving  an in-                                                               
state pipeline  forward on  an aggressive  schedule.   He related                                                               
that  he told  the  administration  he has  no  problem with  the                                                               
proposed fiscal  note of  $380 million,  given that  $500 million                                                               
was provided for the pipeline project outside of this one.                                                                      
                                                                                                                                
8:11:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KAWASAKI maintained his objection.                                                                               
                                                                                                                                
A roll call vote was  taken.  Representatives P. Wilson, Johnson,                                                               
Seaton,  Olson, and  Neuman  voted  in favor  of  Amendment 3  to                                                               
Amendment  4.     Representative   Kawasaki  voted   against  it.                                                               
Therefore, Amendment 3 to Amendment 4 passed by a vote of 5-4.                                                                  
                                                                                                                                
8:13:17 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOHNSON moved  Amendment 4 to Amendment 4  to delete the                                                               
entirety of lines 16-22.                                                                                                        
                                                                                                                                
REPRESENTATIVE KAWASAKI objected.                                                                                               
                                                                                                                                
CO-CHAIR JOHNSON said this amendment  speaks to the same thing of                                                               
lengthening  the  dates,  and  the  purpose  is  to  construct  a                                                               
pipeline as quickly as possible.                                                                                                
                                                                                                                                
REPRESENTATIVE KAWASAKI  withdrew his objection.   There being no                                                               
further objection, Amendment 4 to Amendment 4 was passed.                                                                       
                                                                                                                                
8:14:44 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOHNSON moved Amendment 5 to Amendment 4 as follows:                                                                   
                                                                                                                                
     Line 5:                                                                                                                    
          Delete "Delete '2015.'"                                                                                               
                                                                                                                                
     Line 6:                                                                                                                    
          Delete "2016."                                                                                                        
                                                                                                                                
There being no objection, Amendment 5 to Amendment 4 was passed.                                                                
                                                                                                                                
8:16:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE OLSON moved  Amendment 6 to Amendment  4 to delete                                                               
lines 6-14.                                                                                                                     
                                                                                                                                
REPRESENTATIVE KAWASAKI objected.                                                                                               
                                                                                                                                
CO-CHAIR NEUMAN supported the amendment.                                                                                        
                                                                                                                                
REPRESENTATIVE  P. WILSON  said she  thinks lines  6-14 are  good                                                               
because the commercial  proposals and the evaluations  need to be                                                               
based on facts.                                                                                                                 
                                                                                                                                
[Members discussed  the protocol  of Amendment  6 to  Amendment 4                                                               
versus voting for Amendment 4, as amended.]                                                                                     
                                                                                                                                
A roll  call vote  was taken.   Representatives Olson  and Neuman                                                               
voted in  favor of Amendment  6 to Amendment 4.   Representatives                                                               
Kawasaki,  P.  Wilson,  Seaton, and  Johnson  voted  against  it.                                                               
Therefore, Amendment 6 to Amendment 4 failed by a vote of 2-4.                                                                  
                                                                                                                                
8:21:28 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOHNSON  withdrew  his  objection to  Amendment  4,  as                                                               
amended.                                                                                                                        
                                                                                                                                
REPRESENTATIVE OLSON objected to Amendment 4, as amended.                                                                       
                                                                                                                                
A roll call vote was  taken.  Representatives Seaton and Kawasaki                                                               
voted  in favor  of  Amendment 4,  as  amended.   Representatives                                                               
Olson,  P.   Wilson,  Neuman,  and  Johnson   voted  against  it.                                                               
Therefore, Amendment 4, as amended, failed by a vote of 2-4.                                                                    
                                                                                                                                
8:23:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  noted that  at an  earlier meeting  he had                                                               
inquired  about how  an open  season  would be  conducted by  the                                                               
Regulatory Commission  of Alaska  (RCA) and whether  the pipeline                                                               
would be a common carrier or a contract carrier under HB 369.                                                                   
                                                                                                                                
CO-CHAIR NEUMAN  said the  information Representative  Seaton had                                                               
requested  about pipeline  corridor statutes  on common  carriers                                                               
was delivered just prior to the  start of this meeting, and those                                                               
corridors are not included in HB 369.                                                                                           
                                                                                                                                
8:25:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  clarified he is  referring to the  July 1,                                                               
2011,  date on  page 4,  line 15.   He  said Mr.  Swenson was  to                                                               
report back about whether the  pipeline would be a common carrier                                                               
or contract carrier and how HB 369 would deal with that.                                                                        
                                                                                                                                
CO-CHAIR NEUMAN said he believes that is yet to be determined.                                                                  
                                                                                                                                
REPRESENTATIVE CHENAULT agreed.                                                                                                 
                                                                                                                                
ROBERT  SWENSON, Project  Manager, In-State  Gas Project,  Alaska                                                               
Mental   Health  Trust   Land  Office,   Department  of   Natural                                                               
Resources, stated  he does not  have the expertise to  answer the                                                               
question.  He did visit with  Mr. Balash and his understanding is                                                               
that an in-state pipeline would  be required to be common carrier                                                               
pipeline that is regulated by the RCA.                                                                                          
                                                                                                                                
8:27:37 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NEUMAN  presumed that current plans  include bringing in                                                               
collector pipes and to re-distribute  gas throughout the state to                                                               
act as a common carrier.                                                                                                        
                                                                                                                                
MR.   SWENSON  responded   correct;   it  is   to  maximize   the                                                               
distribution of gas to consumers within the state.                                                                              
                                                                                                                                
REPRESENTATIVE  SEATON inquired  whether  under RCA  jurisdiction                                                               
any new  gas finds would  be excluded  from being carried  in the                                                               
pipeline or rolled into the pipeline.                                                                                           
                                                                                                                                
MR.  SWENSON understood  that if  a producer  and a  consumer are                                                               
using  100 percent  of the  pipeline and  another producer  wants                                                               
access  to that  line to  provide gas  to a  consumer, then  that                                                               
access  would have  to be  allowed  in a  common carrier  system.                                                               
Under  a  contract  carrier  system,   the  contract  would  take                                                               
precedence  and access  to that  pipeline would  then have  to be                                                               
through expansion.                                                                                                              
                                                                                                                                
8:29:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  said he  thinks it  is very  important for                                                               
members to be able  to tell the people of the  state that this is                                                               
an open access pipeline under HB 369.                                                                                           
                                                                                                                                
CO-CHAIR NEUMAN commented that having  as much deliverable gas as                                                               
possible will keep the costs down.                                                                                              
                                                                                                                                
REPRESENTATIVE SEATON  said he is unfamiliar  with pipelines that                                                               
would be  regulated by the  RCA and  since that is  the intention                                                               
with this pipeline it is good to know that information.                                                                         
                                                                                                                                
CO-CHAIR  NEUMAN opened  public testimony,  then closed  it after                                                               
ascertaining that no one wished to testify.                                                                                     
                                                                                                                                
8:31:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P.  WILSON asked  whether the  intent is  still to                                                               
have requests for proposals, given that Amendment 4 failed.                                                                     
                                                                                                                                
REPRESENTATIVE  CHENAULT  answered that  is  exactly  what he  is                                                               
after.  When  a proposal is put together, decisions  will be made                                                               
whether  to  have a  pipeline  company  or  the state  build  the                                                               
pipeline.  The reason for HB 369  is because he would like to see                                                               
the  state get  to this  point sooner  rather than  later.   This                                                               
project  is only  one of  several options,  but it  cannot be  an                                                               
option without  information on  whether it  is a  viable project.                                                               
He is interested  in providing gas to  communities throughout the                                                               
state at every  opportunity possible.  The intent is  to get to a                                                               
project that can  actually be looked at by  combining the talents                                                               
of the  agencies that have  been looking  at a pipeline  over the                                                               
past years.                                                                                                                     
                                                                                                                                
8:35:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CHENAULT, in response  to Co-Chair Neuman, said it                                                               
seems like the state continues to  delay on this project and will                                                               
be in the position of wishing it had started earlier.                                                                           
                                                                                                                                
CO-CHAIR NEUMAN  opined that HB  369 is about thousands  of good-                                                               
paying  jobs  throughout  Alaska.   This  project  would  empower                                                               
communities  and  enable  them  to finance  their  own  destinies                                                               
rather  than relying  on  state  funding, and  it  is a  priority                                                               
project for 82 percent of Alaska's  residents.  He warned that 90                                                               
percent of Alaska's revenue is  coming from just three companies,                                                               
and the state must diversify its economy to change this.                                                                        
                                                                                                                                
8:38:26 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOHNSON moved  to report  HB 369,  Version 26-LS1527\S,                                                               
Cook,  3/10/10, as  amended, from  the committee  with individual                                                               
recommendations  and  any  accompanying  and  forthcoming  fiscal                                                               
notes.   There  being no  objection, CSHB  369(RES) was  reported                                                               
from the House Resources Standing Committee.                                                                                    

Document Name Date/Time Subjects
PXD Comments CSHB308 031010.pdf HRES 3/10/2010 1:00:00 PM
HB 308
HB 308 Savant AK 3.10.10.pdf HRES 3/10/2010 1:00:00 PM
HB 308
AOGA Presentation 3.10.10.pdf HRES 3/10/2010 1:00:00 PM
HB 308
AOGA Testimony on CSHB308 FINAL.pdf HRES 3/10/2010 1:00:00 PM
HB 308
HB 337.pdf HRES 3/10/2010 1:00:00 PM
HB 337
HB 337 Gov Letter.pdf HRES 3/10/2010 1:00:00 PM
HB 337
HB 337 Fiscal Notes 1.2.3..pdf HRES 3/10/2010 1:00:00 PM
HB 337
CS HB 369 v.S.pdf HRES 3/10/2010 1:00:00 PM
HB 369
HB 308 ConocoPhillips Testimony 3.10.10.pdf HRES 3/10/2010 1:00:00 PM
HB 308
HB 308 ExxonMobil Testimony 3.10.10.pdf HRES 3/10/2010 1:00:00 PM
HB 308