Legislature(2007 - 2008)BUTROVICH 205
04/27/2007 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| SB80 | |
| SJR4 | |
| SB57 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 186 | TELECONFERENCED | |
| += | SJR 4 | TELECONFERENCED | |
| += | SB 80 | TELECONFERENCED | |
| *+ | SB 57 | TELECONFERENCED | |
| *+ | SB 71 | TELECONFERENCED | |
| + | TELECONFERENCED |
SJR 4-NATURAL GAS FOR STATE RESIDENTS
4:57:17 PM
CHAIR HUGGINS announced SJR 4 to be up for discussion.
SENATOR MCGUIRE moved to adopt CSSJR 4, version L. There were no
objections and it was so ordered.
4:59:05 PM
SENATOR WIELECHOWSKI, sponsor of SJR 4, explained that this
resolution addresses the escalating costs of natural gas in the
Cook Inlet area, which provides energy for approximately 473,000
Alaskans or 71 percent of the state's population to heat their
homes and businesses from Fairbanks to Kenai.
He said the Kenai Liquefied Natural Gas Plant has requested from
the Federal Energy Regulatory Commission (FERC) an extension to
continue an export license so that it can continue to export
natural gas overseas. The administration has placed a set of
conditions that must be met before the application is approved
and this resolution is simply asking FERC to do a couple of
different things - to essentially look at the natural gas supply
that exists in Cook Inlet and consider that a recent poll
indicates that 89 percent of Alaskans believe that maximum use
of our natural resources includes providing low cost gas for
Alaskans.
The resolution urges the producers in the Cook Inlet region to
work with local utilities to insure an adequate and affordable
long-term gas supply. It urges the Regulatory Commission to
expedite the review of any utility contracts and asks the
Department of Energy in its review of the application to
consider whether the needs of Alaskans are being met. Enstar,
Chugach Electric Association, Alaska Public Interest Research
Group (AKPIRG) and AARP have submitted letters of support for
this measure.
5:00:23 PM
SENATOR WAGONER said he had no problem with the resolution, but
pointed out that he wasn't sure if the Phillips plant shut down
tomorrow that it would have an effect on the price of gas in
Cook Inlet, because currently the gas in Cook Inlet that is
supplying the utilities is under contract for a specific amount
of money. One contract is based on Henry Hub and one is maybe 80
cents less than Henry Hub. Enstar says that all their customers
pay at the same rate whether they are on the Kenai or in
Anchorage and he didn't know if Southcentral customers had a
chance at getting more affordable gas because the state is also
tasked with getting market value for its gas. Further he didn't
know that the Alaska legislature could put out gas for less than
market value.
Secondly, he pointed out that on line 13 of page 2, the
resolution talks about 58 residents of the LNG plant, which is
true; but Marathon, who is a partner with ConocoPhillips,
produces probably over 55 percent of the gas that goes into the
plant and has many more employees, approximately 100 to 150. He
would like to see that addressed.
SENATOR WIELECHOWSKI said he would be happy to work with him to
try to come up with language that would include everyone.
5:03:33 PM
SENATOR WAGONER said one more thing to think about is if
production shuts down, problems happen and "none of it's very
pretty over a longer period of time." He speculated that the gas
would have to go into storage.
5:04:02 PM
JOHN NORMAN, Chair, Alaska Oil and Gas Conservation Commission
(AOGCC), came back to testify. He said there could potentially
be a conservation issue if those reservoirs were shut in but it
would be inappropriate for him to comment further, because at
some point in the future the commission might have to intervene
in the proceeding.
5:05:42 PM
RITA HATCH, Anchorage resident, said she has been on the heating
program since she moved there 10 years ago. She thought the gas
belonged to Alaska in the first place and reasoned if you know
you're short on gas, why give it to other countries.
5:07:07 PM
SENATOR WIELECHOWSKI said the resolution is asking FERC to look
at whether the needs of the Alaskan people are being met before
it agrees with the application.
MS. HATCH said their needs are not being met.
SENATOR STEDMAN commented that a partial answer to that question
in Cook Inlet is that supply is definitely a concern whether
replacement comes from LNG, a line from the North Slope or coal
gasification. Now that the price for the customer more reflects
market prices, he thought more exploration interest would be
seen there.
5:08:52 PM
SENATOR WAGONER explained that people need to be aware that
several times this winter ConocoPhillips decided to short the
supply of gas to its plant in order to supply gas during a
projected peak demand period over and above the contract Enstar
had with both Chevron and Marathon. ConocoPhillips is a pretty
good neighbor that way.
MS. HATCH commented that the price of gas has gone up 30 percent
in the last three years so companies are not hurting by selling
it to Alaskans.
5:10:13 PM
SENATOR WAGONER said Alaskans aren't paying $14/mcf like some
people in the Lower 48 do. Alaska continually has the advantage
of the cheapest gas available in the United States.
MS. HATCH said we should get it cheaper.
5:11:24 PM
CURTIS THAYER, Director, Corporate and External Affairs, Enstar
Natural Gas, said Enstar represents over 125,000 meters or
340,000 Alaskans and they supported SJR 4.
CHAIR HUGGINS said SJR 4 would be set aside to work out details.
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