Legislature(2009 - 2010)BARNES 124
02/04/2010 03:00 PM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| Overview(s) by Admiral Tom Barrett, Office of the Federal Coordinator, Alaska Natural Gas Transportation Projects: Alaska Natural Gas Pipeline Projects | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
February 4, 2010
3:07 p.m.
MEMBERS PRESENT
Representative Nancy Dahlstrom
Representative Kyle Johansen
Representative Jay Ramras
Representative Pete Petersen
Representative Chris Tuck
MEMBERS ABSENT
Representative Bryce Edgmon, Co-Chair
Representative Charisse Millett, Co-Chair
COMMITTEE CALENDAR
OVERVIEW(S): BY ADMIRAL TOM BARRETT, OFFICE OF THE FEDERAL
COORDINATOR, ALASKA NATURAL GAS TRANSPORTATION PROJECTS: ALASKA
NATURAL GAS PIPELINE PROJECTS
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
ADMIRAL TOM BARRETT, U.S. Coast Guard Retired; Deputy Federal
Coordinator
Office of the Federal Coordinator
Alaska Natural Gas Transportation Projects
Anchorage, Alaska
POSITION STATEMENT: Presented an update on the Alaska natural
gas pipeline projects.
ACTION NARRATIVE
3:07:00 PM
REPRESENTATIVE JOHANSEN called the House Special Committee on
Energy meeting to order at 3:07 p.m. Present at the call to
order were Representatives Petersen, Tuck, and Johansen.
Representatives Ramras and Dahlstrom arrived as the meeting was
in progress.
3:07:21 PM
^Overview(S) By Admiral Tom Barrett, Office Of The Federal
Coordinator, Alaska Natural Gas Transportation Projects: Alaska
Natural Gas Pipeline Projects
Overview(S): By Admiral Tom Barrett, Office Of The Federal
Coordinator, Alaska Natural Gas Transportation Projects: Alaska
Natural Gas Pipeline Projects
REPRESENTATIVE JOHANSEN announced that the only order of
business would be an overview by Admiral Tom Barrett, Deputy
Coordinator of the Office of the Federal Coordinator, Alaska
Natural Gas Transportation Projects.
3:07:59 PM
ADMIRAL TOM BARRETT, U. S. Coast Guard Retired, Deputy Federal
Coordinator, Office of the Federal Coordinator for Alaska
Natural Gas Transportation Projects, said that his presentation
would update the committee on the status of the natural gas
pipeline projects and provide new information on energy issues
relative to the state. As a federal official, he said he does
not want to intrude on state business; actually, one of the
roles of the Office of the Federal Coordinator (OFC) is to
provide timely, accurate, and comprehensive information on the
projects to assist the committee as it makes decisions. In
2004, the OFC was tasked by Congress to expedite the movement of
Arctic gas to North American markets. This goal includes the
elimination of "red tape" by reducing the bureaucracy, at least
on the federal side, and coordinating with other relevant
organizations such as the state, tribes, and the Canadian
authorities, to reduce the cost of the project. Some of the
areas of responsibility of the OFC are: upfront coordination
with other federal agencies and other parties; the authority to
enforce compliance with certain conditions of law such as to
prevent unnecessary delay by federal agencies; and to oversee
construction and operation of the facility in its "start-up."
3:10:39 PM
ADMIRAL BARRETT continued to explain that the OFC also holds a
charter to provide information about the project to
stakeholders, Congress, the administration, the state
legislature, and the public. In order to facilitate the
coordination of interests, he noted that the OFC meets regularly
with the federal agencies involved with the project at the site,
and it also meets regularly with the state and with Denali - The
Alaska Gas Pipeline (Denali) and the Alaska Gasline Inducement
Act (AGIA) permitting staff, to understand the issues and
prevent "friction from developing." In addition, the OFC meets
regularly with Canadian authorities on the issues of dual
permitting. Addressing the fact of two applicants moving toward
the same project, he said the goal of the OFC is to provide a
level playing field on the federal permitting side so that any
applicant is treated fairly and equitably. Admiral Barrett
pointed out that there are at least 22 agencies and a number of
departments that all would have a part in the construction of a
gas pipeline. Further responsibilities of the OFC include
compliance and information. For example, after the Federal
Energy Regulatory Commission (FERC) issues a Certificate of
Public Convenience and Necessity (CPCN) there is a deadline of
18 months and the OFC would investigate any unnecessary delays.
He relayed that the OFC began a gap analysis mainly using
information from the Trans-Alaska Pipeline System (TAPS) to
identify issues that may arise from permitting in the existing
right-of-way (ROW), and the construction of a large pipeline
energy project. In addition, the OFC prepared the first phase
of an implementation plan for Denali and a similar plan is in
progress for TransCanada's Alaska Pipeline Project (APP).
Basically, an implementation plan is a schedule to ensure that
the agencies are "in sync" and none fall behind. Furthermore,
the OFC has prepared a prototype geographic information system
(GIS) for the project by organizing information from TAPS and
integrating new technology such as the global positioning system
(GPS) for mapping. Admiral Barrett advised that Alaska's
baseline mapping is inaccurate and out-of-date, and he described
the process for the improved mapping of Atigun Pass that could
also be used for the benefit of aviation and subsistence,
geographic, and wildlife studies.
3:16:11 PM
REPRESENTATIVE RAMRAS asked the Admiral to relate his career
background information.
3:17:39 PM
ADMIRAL BARRETT described his career that began with 35 years in
the U.S. Coast Guard. He then returned to the mapping effort
and pointed out a significant inaccuracy in existing mapping.
Admiral Barrett opined that integrated information will provide
greater public transparency for web access and better
understanding. The prototype is currently available for review
by federal and state agencies and an assessment of its merit
will be completed prior to further funding of the project. He
turned to the subject of a permit matrix and observed because
any large pipeline project requires hundreds of permits and
approvals, the OFC seeks to understand the approval process and
also to understand the data requirements for making decisions on
the permits. For example, if an agency will be making a
decision on permitting, the OFC needs to know what information
the agency needs, and to watch for overlaps so the same data is
not requested by separate agencies. Admiral Barrett relayed
that OFC chaired a technical work team in Anchorage to discuss
the technical issues of the pipeline project such as seismic,
regular permafrost, discontinuous permafrost, environmental
changes over 30 years, wetlands, and the construction of a large
gas treatment plant.
3:26:33 PM
REPRESENTATIVE DAHLSTROM asked for more information on the maps.
3:27:01 PM
ADMIRAL BARRETT further explained that light detection and
ranging (LIDAR) was used for a base map. However, for a study
such as a wetlands study by the U.S. Army Corps of Engineers
(USACE), overlays are added to display the wetlands, wildlife,
or land ownership. He described the difficulties in using the
present mapping system and the importance of accurate mapping to
the residents of Alaska.
3:28:59 PM
REPRESENTATIVE DAHLSTROM requested a future demonstration of the
new mapping system.
3:29:38 PM
REPRESENTATIVE JOHANSEN offered to relay Representative
Dahlstrom's request to the committee co-chairs.
3:29:49 PM
ADMIRAL BARRETT continued to the subject of current developments
of the pipeline projects. He indicated that the in-state gas
study is part of the initial FERC filing by APP. After FERC
approval, there will be an opportunity for public comment and
FERC will require the applicant to resolve any issues to its
satisfaction. At this time, open season is scheduled to finish
by the end of July. He noted that FERC held briefings to
clarify the process. Denali has indicated that its filing will
be in April; he opined both projects have invested much to lay
out the actual project descriptions and initial cost estimates.
3:31:53 PM
REPRESENTATIVE RAMRAS recalled a meeting last year at the U.S.
Department of Energy (DOE) where there was interest by the Obama
Administration in the Alaska natural gas pipeline; in fact, the
national security value of the pipeline was clear. However, he
wondered why the administration was neutral about the economics
of the project. Representative Ramas asked for Admiral
Barrett's perspective on how the committee reconciles its duty
to develop a profitable gas pipeline with the position of the
administration.
3:34:56 PM
ADMIRAL BARRETT agreed that the markets will be the driver for
the pipeline. Fundamentally, the OFC believes that in the long-
term there will be room in the market for Alaska's natural gas.
He shared that Larry Persily, nominee for the position of
Federal Coordinator, OFC, testified that transportation costs
will be lower for shale gas, but the production costs will be
more. Admiral Barrett opined "the sense" in Washington [D.C.]
is that the Alaska gas pipeline is a good project because the
loan guarantees are available and there is legislative support
on the national level. In fact, although DOE has put a great
deal of emphasis on renewable sources of energy, it recognizes
that a huge piece of the U.S. energy supply cannot be replaced
quickly, and natural gas is needed during the transition to
renewables. He stressed that there is good support for the
project and he has heard it said, "Tell us what else we might
consider doing that would be helpful."
3:38:53 PM
ADMIRAL BARRETT observed that the California Environmental
Protection Air Resources Board has approved the construction of
a natural gas facility in the San Francisco Bay area because it
has a 50 percent cleaner footprint than some other options. He
has also heard that Alaska gas would provide about 8 percent of
the U. S. market for natural gas, thus a long-term and stable
source of gas from Alaska will stabilize prices and will
encourage users to convert to natural gas. He concluded that
there is no opposition to the project, and his personal opinion
is that Alaska must do everything: get more oil out of Prudhoe
Bay, go offshore, and leverage the state's assets. All in all,
the natural gas pipeline project is less controversial and more
benign environmentally than other options. Admiral Barrett then
encouraged the committee to watch cap-and-trade legislation, the
national energy bill, and other policy initiatives moving in
Washington D.C. that have potential impacts on the project. The
project has strong support from the Department of Labor; in
fact, the project is a $30 to $40 million privately funded
"stimulus bill," unlike the California high-speed rail project
that would be totally funded by government. Turning to the jobs
issue, he praised the training programs that are underway in
Fairbanks, and said, "Labor is very strong behind [the project],
your NGO's are not fighting it ... the economic benefits are
huge." In case the committee was not aware, he pointed out that
the FERC open season regulations are designed to permit
competition, so the fact that there are two applicants is
accommodated by its regulatory design. On the subject of
infrastructure analysis, he encouraged the committee to consider
that the state infrastructure such as the haul road, aviation
facilities, port facilities, and transportation facilities, is
"thin."
3:45:48 PM
ADMIRAL BARRETT relayed that the OFC filed comments that the
critical habitat area designations for polar bears are overly
broad, based on the scientific information presented.
Similarly, the OFC plans to "file on belugas." He cautioned
that if the movement of a significant amount of pipe is tied up
at the ports in Cook Inlet, additional costs due to delay will
be added to a project of any size. In truth, looking at broader
national level agency actions that are linked to Alaska's
general transportation infrastructure would have big
implications for the project. Admiral Barrett then stressed
that even in-state projects need federal permits of different
types; actually, a conflict to avoid is that of precedents
attached to an in-state line that have negative implications for
permits for the main line.
3:47:55 PM
REPRESENTATIVE RAMRAS asked for comments on the suggestion that
the state should not build a pipeline, but wait for the [polar]
ice to melt and ship the gas out as LNG.
3:48:51 PM
ADMIRAL BARRETT advised that issues of a deep water port in the
Arctic are different than those of a deep water port in the Gulf
of Mexico because, even with melting, there is a lot of ice and
it is moving with incredible force behind it. An advantage of
the on-shore infrastructure is "you've got Prudhoe Bay;a you've
got TAPS coming out of there." He opined the Arctic Ocean is
"not going to go from ice to no ice, it's going to go to less
ice for a long time," and with the implications thereof.
3:51:24 PM
REPRESENTATIVE RAMRAS asked what the role of the Coast Guard
will be in the Arctic for the next quarter of a century.
3:51:58 PM
ADMIRAL BARRETT responded that the Coast Guard will have
multiple roles, including the following missions: assert
national sovereignty; manage and protect U.S. interests; provide
search and rescue; address environmental and fish concerns;
energy development; and law enforcement.
3:54:20 PM
REPRESENTATIVE PETERSEN asked Admiral Barrett to talk about
issues regarding oil and gas projects in Canada.
3:54:43 PM
ADMIRAL BARRETT advised that the Mackenzie Valley Natural Gas
Project recently submitted a study to the (Canada) National
Energy Board. He expressed his point of view that there is room
in the market for both pipelines, due to the fact that Canadian
natural gas supplies are on a downturn. However, the study
indicated that the project is subject to 150 conditions and the
OFC is in the process of reviewing those conditions. Also, in
regard to the development of oil sands in Canada, environmental
communities "like the gas line project, as long as it's not
used, in their terms, 'to get more dirty oil out of the oil
sands'." The answer to this concern is that U.S. law requires
that an equal volume of gas must enter, and exit, Canada. In
addition, First Nations have concerns similar to those of Alaska
Natives regarding land use and subsistence issues. Admiral
Barrett said the OFC will work closely with agencies to manage
issues brought up by tribal interests.
3:57:33 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 3:5[7] p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Alaska Legislative Presentation 2010.ppt |
HENE 2/4/2010 3:00:00 PM |
|
| Energy Committee Agenda 02042010.doc |
HENE 2/4/2010 3:00:00 PM |