Legislature(2015 - 2016)HOUSE FINANCE 519
11/02/2015 04:00 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB3001 | |
| Public Testimony | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB3001 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
THIRD SPECIAL SESSION
November 2, 2015
4:04:16 PM
4:04:16 PM
CALL TO ORDER
Co-Chair Neuman called the House Finance Committee meeting
to order at 4:04 p.m.
MEMBERS PRESENT
Representative Mark Neuman, Co-Chair
Representative Steve Thompson, Co-Chair
Representative Dan Saddler, Vice-Chair
Representative Bryce Edgmon
Representative Les Gara
Representative Lynn Gattis
Representative David Guttenberg
Representative Scott Kawasaki
Representative Cathy Munoz
Representative Lance Pruitt
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Barbara Huff, Teamsters Local 959, Juneau; Mark Morris,
Self, Juneau; Representative Paul Seaton, Representative
Liz Vazquez, Representative Lora Reinbold, Representative
Cathy Tilton, Representative Shelley Hughes.
PRESENT VIA TELECONFERENCE
Merrick Pierce, Self, Fairbanks; Bill Warren, Self,
Nikiski; Tom Lakosh, Self, Anchorage; Daryl Nelson, Self,
Chigiak; Brent Reimers, Self, Wasilla.
SUMMARY
HB 3001 APPROP: LNG PROJECT & FUND/AGDC/SUPP.
HB 3001 was HEARD and HELD in committee for
further consideration.
PUBLIC TESTIMONY
Co-Chair Neuman reviewed the agenda for the meeting.
4:05:02 PM
HOUSE BILL NO. 3001
An Act making supplemental appropriations; making
appropriations to capitalize funds; making
appropriations to the general fund from the budget
reserve fund (art. IX, sec. 17, Constitution of the
State of Alaska) in accordance with sec. 12(c), ch. 1,
SSSLA 2015; and providing for an effective date.
4:05:07 PM
^PUBLIC TESTIMONY
4:05:13 PM
MERRICK PIERCE, SELF, FAIRBANKS (via teleconference),
discussed the challenges of the AKLNG project including
competition, project costs, and a potentially contentious
constitutional change requirement. He also mentioned other
significant economic challenges for the project including
the spot market LNG price for the current month being about
$8.10 per million British Thermal Unit (BTU). He suggested
that on the positive side the state had an administration
and a governor that were completely committed to the
success of a gasline project. Also, the Japanese market
remained keenly interested in Alaska and had a strong
desire to replace its nuclear power source since the
Fukushima disaster. He added that Japan had an interest in
bringing in clean LNG to its country. Alaska was a stable
place with conventional gas resources. He urged committee
members to give the governor the latitude he was
requesting. He reiterated the commitment of the governor.
He relayed having visited the markets in Japan in the prior
summer and saw the level of interests Japan had in Alaska's
gas. The thanked the committee.
4:08:45 PM
Representative Wilson asked if he was in favor of the
committee substitute. Mr. Pierce responded affirmatively.
4:09:09 PM
BILL WARREN, SELF, NIKISKI (via teleconference), supported
HB 3001, the buyout of TransCanada, AGDC, and the 48"
pipeline. He commented on the previous legislation
including HB 4. He relayed his personal experience with
working on the pipeline. He wanted to see the project
succeed and felt with the current administration success
was possible. He thanked the committee for its time.
4:12:52 PM
TOM LAKOSH, SELF, ANCHORAGE (via teleconference), opposed
HB 3001 referring to the bill as corporate welfare and a
bailout of TransCanada. He believed that the action to buy
out TransCanada was premature. He was not opposed to a
gasline if the proper work was done to maintain oil
reservoir pressures and to expand the LNG market. He
believed critical technology was needed, a different and
more environmentally friendly technology for extraction. He
told of technology being developed by Chicago Bridge and
Iron. He opined that the use of the company's technology
would greatly expand the market for LNG in the Kyoto
Protocol countries. He believed it would better compete
with renewables. He also thought the state could capture
CO2 from power production combustion of methane and
reinject it into the state's wells in order to allow for
continued extraction of oil. It was clear to him that with
LNG below $8 per million BTU for the foreseeable future the
state would not be able to compete with Qatar, Australia,
or Malaysia. He furthered that the state needed to expand
the market with new technologies that lowered the carbon
footprint of the state's LNG. He thought the state could
market Alaska LNG as green LNG if it took the proper
measures applying different technology. He appreciated the
opportunity to testify and reiterated that he thought it
was premature to bail out TransCanada until the state found
a way to appropriately market its gas. He thanked the
committee.
4:15:27 PM
BARBARA HUFF, Governmental Legislative Affairs Director,
TEAMSTERS LOCAL 959, relayed that there were approximately
7 thousand Teamster members around the state. Currently,
there were several hundred members working within the oil
and gas industry thanks to previous enacted legislation.
She discussed the Teamsters continued work and support with
its partners in the oil industry since building the
gasline. She reported that the Teamsters had been looking
forward to an oil line since they finished the gasline. The
Teamsters supported the gas pipeline and the Committee
Substitute for HB 3001. She saw the bill as an
appropriation of money that was needed to further the AKLNG
project. The bill provided for a buyout for what seemed to
be a dissolution between the state and TransCanada rather
than a nasty divorce. She opined that TransCanada had made
positive contributions to the project including providing
valuable information, direction, and resources. She did not
look at the buyout as a corporate handout. She remarked
that the bill allowed for the state to begin focusing as a
team. She had hopes that from the dialog and debate around
HB 3001 the state would be able to work together with
industry partners. The Teamsters supported AGDC as the
representative of the State of Alaska through pre-FEED
phase and into the FEED process. She furthered that AGDC
had experience and qualified personnel at the helm of the
organization. The Teamsters also believed AGDC provided a
better alignment from a voting perspective than
TransCanada. The State of Alaska would be one of four
partners with an equitable share in the project. She
furthered that for every dollar that the State of Alaska
spent three partners would spend three additional dollars.
If the partners continued to spend money then the money
that the legislature would be allocating would be for the
better. If in the future the state believed it needed a
partner there were mechanisms in statue that would allow
such an opportunity, potentially at a cheaper price. The
Teamsters supported the bill for all of the reasons she
presented. She acknowledged all of the many hours spent on
the legislation and suggested focusing on the positive
aspects of the project in order to move it forward. She
concluded by thanking the committee for its time.
4:21:28 PM
MARK MORRIS, SELF, JUNEAU, spoke in support of HB 3001. He
relayed his personal experience. He opined that the state
should let the producers do what they do best. He suggested
that legislators think about the project from a long-term
perspective in the evaluation process. He was looking to
the future and encouraged the legislature to move forward
with the AKLNG project.
4:26:46 PM
DARYL NELSON, SELF, CHIGIAK (via teleconference), spoke in
favor of HB 3001. He indicated he did not favor the state
being in partnership with TransCanada. He encouraged
members to support HB 3001 and expressed his appreciation
to committee members.
4:30:19 PM
AT EASE
4:45:42 PM
RECONVENED
BRENT REIMERS, SELF, WASILLA (via teleconference), spoke in
opposition of HB 3001 and the gas pipeline. Based on the
current price of natural gas he did not view the project as
viable. He wanted to see more diversification and more
spending cuts. He mentioned BP's previous attempt and
Conoco Phillips' previous attempt to develop their own
gasline project without success. He thanked the committee.
ADJOURNMENT
4:48:48 PM
The meeting was adjourned at 4:48 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 3001 Testimony.pdf |
HFIN 11/2/2015 4:00:00 PM |
HB3001 |