Legislature(2013 - 2014)BELTZ 105 (TSBldg)
02/21/2013 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB23 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| = | SB 23 | ||
SB 23-AIDEA: LNG PROJECT; DIVIDENDS; FINANCING
1:30:35 PM
CHAIR DUNLEAVY announced the consideration of SB 23 and noted
that this was the third hearing.
SENATOR ELLIS joined the meeting.
1:31:30 PM
BRITTANY HUTCHISON, representing Diane Hutchison who is the
presiding officer of the Fairbanks North Star Borough Assembly,
testified in support of SB 23. She explained that lowering
energy costs for the Interior was a priority and that SB 23 was
an avenue to meet that goal. She stated that providing low-cost
financing to truck natural gas to Fairbanks and the Interior is
either a bridge solution while awaiting a pipeline or an energy
cost stabilizer if a pipeline never comes. She highlighted that
Fairbanks has PM air quality problems, which has attracted
2.5
potentially expensive federal attention. The ability to convert
to gas as a heating source will help solve this problem and ease
the burden that PM air pollutant levels place on the state.
2.5
1:34:06 PM
DAVID PRUHS, representing himself, Fairbanks, AK, testified in
support of SB 23. He said his remarks would be associated with
commerce. He said was born and raised in Fairbanks and had
established a professional career in real estate. He emphasized
that the Fairbanks community was in crisis because of the high
cost of energy. He pointed out that the utility costs for his
commercial property averaged 30 percent of the gross income,
whereas the national average was 12-15 percent. He said he
predicted that this would be the winter of Fairbanks'
foreclosure and that dire prediction had come true. He said
there were more foreclosed properties on the market now than any
time since the 1980s, and the high cost of energy in the
Interior was the caus.
He said the start-up costs for trucking natural gas are
expensive, but should be considered over a 20-year term. The
current estimates indicate that this project will bring the
price of fuel down to the price that it was just 10 years ago.
Additional benefits of trucking gas are that rural villages
along the Yukon can receive barge shipments of liquid natural
gas and communities along the Interior road system can be
serviced.
MR. PRUHS concluded that this was the only viable project to
bring gas to the Interior within three years, and it had
widespread support.
1:37:47 PM
CHAIR DUNLEAVY closed public testimony and asked for a motion to
adopt [Amendment 1].
1:38:11 PM
SENATOR OLSON moved Amendment 1, labeled 28-GS1738\A.5.
A M E N D M E N T 1
OFFERED IN THE SENATE BY SENATOR OLSON
TO: SB 23
Page 10, line 18:
Delete "the Fairbanks North Star Borough"
Insert "Interior Alaska"
CHAIR DUNLEAVY objected for discussion purposes.
SENATOR OLSON explained that the amendment would have the effect
of benefitting all of Alaska rather than just the Fairbanks
North Star Borough. The reasoning is that the gas coming off the
North Slope belongs to all the people in the state of Alaska.
CHAIR DUNLEAVY found no objection and announced that Amendment 1
passed.
1:38:56 PM
CHAIR DUNLEAVY asked for a motion to adopt Amendment 2.
SENATOR MICCICHE moved Amendment 2, labeled 28-GS1738\A.6
A M E N D M E N T 2
OFFERED IN THE SENATE BY SENATOR MICCICHE
TO: SB 23
Page 1, line 5, following "production":
Insert "or regasification"
Page 10, line 12, following "PRODUCTION":
Insert "OR REGASIFICATION"
Page 10, line 12, following "production":
Insert "or regasification"
Page 10, line 17:
Delete "on the North Slope"
1:39:11 PM
SENATOR OLSON objected.
SENATOR MICCICHE explained that the amendment adds the
regasification option and essentially says that if for some
reason the economics don't work and the project will not occur
on the North Slope, AIDEA can evaluate other options. He pointed
out that the project was missing a detailed evaluation of
facility economics so it was not known if the economics of the
facility on the North Slope would prove out and funding could be
secured.
He said the goal is to provide the lowest cost energy to
Fairbanks as quickly as possible, and this recognizes that there
may be other opportunities to deliver LNG at a lower cost, more
quickly. This would allow AIDEA to complete an evaluation to
ensure the most economical project possible.
1:40:37 PM
CHAIR DUNLEAVY asked if there was objection.
1:40:42 PM
SENATOR OLSON maintained his objection.
He said he objected to removing the reference to the plant being
located "on the North Slope" because it was his understanding
that the facility was being built there to make it possible for
rural areas to have access to gas. If the facility is located
anywhere other than the North Slope, it will put the people in
Senate District T above the Fairbanks area at a disadvantage. He
acknowledged that building on the North Slope is very expensive,
and pointed out that if economics were part of the equation, the
plant would be built somewhere else. He objected to that.
1:41:44 PM
SENATOR MICCICHE said the reality is that the amendment does not
affect the economics. It allows AIDEA to look at other
opportunities to deliver the same energy if the other project
were to fail.
1:42:25 PM
CHAIR DUNLEAVY asked Senator Olson if his objection related to
deleting the phrase "on the North Slope" on page 10, line 17.
SENATOR OLSON confirmed that was his main objection, inserting
the references to regasification wasn't an issue.
1:42:41 PM
SENATOR MICCICHE said he would be willing to revise the
amendment.
SENATOR STEDMAN joined the committee.
1:43:08 PM
At ease
1:45:21 PM
CHAIR DUNLEAVY reconvened the meeting and asked Senator Micciche
to explain Amendment 2 once again.
SENATOR MICCICHE explained that the amendment allows an
evaluation of the project economics. If the economics of the LNG
liquefaction facility do not work, it allows AIDEA to evaluate
other projects to deliver the same product to the same
communities.
1:46:21 PM
A roll call vote was taken. Senators Micciche and Dunleavy voted
in favor of Amendment 2 and Senators Olson, Stedman, and Ellis
voted against it. Therefore, Amendment 2 failed by a vote of
2:3.
1:47:21 PM
At ease
1:48:02 PM
CHAIR DUNLEAVY solicited a motion to move the bill.
1:48:14 PM
SENATOR STEDMAN moved to report SB 23, Version A as amended,
from committee with individual recommendations and attached
fiscal note(s).
CHAIR DUNLEAVY found no objection and announced that CSSB
23(L&C) moved from the Senate Labor and Commerce Standing
Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 23 - Letter of Support - North Pole Resolution 2.pdf |
SL&C 2/21/2013 1:30:00 PM |
SB 23 |
| SB 23 - Letter of Support - North Pole Resolution.pdf |
SL&C 2/21/2013 1:30:00 PM |
SB 23 |