Legislature(2007 - 2008)CAPITOL 106
03/26/2007 08:30 AM House OIL & GAS
| Audio | Topic |
|---|---|
| Start | |
| HB177 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 177 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON OIL AND GAS
March 26, 2007
8:34 a.m.
MEMBERS PRESENT
Representative Vic Kohring, Chair
Representative Nancy Dahlstrom
Representative Jay Ramras
Representative Ralph Samuels
Representative Mike Doogan
Representative Scott Kawasaki
MEMBERS ABSENT
Representative Kurt Olson, Vice Chair
OTHER LEGISLATORS PRESENT
Representative David Guttenberg
Representative Craig Johnson
Representative Carl Gatto
COMMITTEE CALENDAR
HOUSE BILL NO. 177
"An Act relating to the Alaska Gasline Inducement Act;
establishing the Alaska Gasline Inducement Act matching
contribution fund; providing for an Alaska Gasline Inducement
Act coordinator; making conforming amendments; and providing for
an effective date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 177
SHORT TITLE: NATURAL GAS PIPELINE PROJECT
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
03/05/07 (H) READ THE FIRST TIME - REFERRALS
03/05/07 (H) O&G, RES, FIN
03/06/07 (H) O&G AT 3:00 PM BARNES 124
03/06/07 (H) -- MEETING CANCELED --
03/08/07 (H) O&G AT 3:00 PM BARNES 124
03/08/07 (H) -- MEETING CANCELED --
03/13/07 (H) O&G AT 3:30 PM HOUSE FINANCE 519
03/13/07 (H) Heard & Held
03/13/07 (H) MINUTE(O&G)
03/15/07 (H) O&G AT 3:00 PM BARNES 124
03/15/07 (H) Heard & Held
03/15/07 (H) MINUTE(O&G)
03/19/07 (H) O&G AT 8:30 AM CAPITOL 106
03/19/07 (H) Heard & Held
03/19/07 (H) MINUTE(O&G)
03/20/07 (H) O&G AT 3:00 PM BARNES 124
03/20/07 (H) Heard & Held
03/20/07 (H) MINUTE(O&G)
03/21/07 (H) O&G AT 5:30 PM SENATE FINANCE 532
03/21/07 (H) Heard & Held
03/21/07 (H) MINUTE(O&G)
03/22/07 (H) O&G AT 3:00 PM BARNES 124
03/22/07 (H) Heard & Held
03/22/07 (H) MINUTE(O&G)
03/23/07 (H) O&G AT 8:30 AM CAPITOL 106
03/23/07 (H) Heard & Held
03/23/07 (H) MINUTE(O&G)
03/24/07 (H) O&G AT 1:00 PM SENATE FINANCE 532
03/24/07 (H) -- Public Testimony --
03/26/07 (H) O&G AT 8:30 AM CAPITOL 106
WITNESS REGISTER
DAVE VAN TUYL, Manager
Gas Commercialization
BP Exploration (Alaska) Inc.
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HB 177.
ACTION NARRATIVE
CHAIR VIC KOHRING called the House Special Committee on Oil and
Gas meeting to order at 8:34:39 AM. Representatives Samuels,
Ramras, Doogan, Kawasaki, and Kohring were present at the call
to order. Representative Dahlstrom arrived as the meeting was
in progress. Representatives Guttenberg, Johnson, and Gatto
were also in attendance.
HB 177-NATURAL GAS PIPELINE PROJECT
8:34:51 AM
CHAIR KOHRING announced that the only order of business would be
HOUSE BILL NO. 177, "An Act relating to the Alaska Gasline
Inducement Act; establishing the Alaska Gasline Inducement Act
matching contribution fund; providing for an Alaska Gasline
Inducement Act coordinator; making conforming amendments; and
providing for an effective date."
8:36:50 AM
DAVE VAN TUYL, Manager, Gas Commercialization, BP Exploration
(Alaska) Inc., informed the committee that BP wants and needs a
gas pipeline, built for a low capital cost and operated cost
efficiently. He said that BP believes low costs will allow the
pipeline to be built and to be successful. Low costs are good
for the state and BP, as they ensure lower tariffs, higher
netbacks and more revenue and will provide incentives to
exploration. Alaska's gas pipeline, which will also extend the
economic life of oil production, is an important project to BP,
the state and the nation. BP, he emphasized, is ready to work
with the Palin Administration and the legislature to reach a
fiscal framework that will be successful for all parties. The
future of BP in Alaska is directly linked to the construction of
a gas pipeline. Therefore, it is important to complete the
project. BP, he said, regards the Alaska Gasline Inducement Act
(AGIA) as a step to an open and transparent path to development
of the pipeline. BP has developed an outline of concerns,
however, about the proposed legislation.
8:40:02 AM
MR. VAN TUYL opined that AIGA creates unintended consequences.
The first areas of concern are AS 43.90.440 and AS 43.90.340,
which direct the state to select an exclusive winner, and award
state funds, based on promises. In addition, AS 43.90.140
requires that the exclusive winner comply with 16 specific
requirements. BP, he said, believes that rather than providing
selection criteria, the state should establish a clear framework
for investors, and allow the market to identify the most
successful project. Mr. Van Tuyl continued to say that BP
supports competition in the marketplace, and does not support
advance exclusivity before the competition begins. In fact, the
Federal Energy Regulatory Commission (FERC) will require a
successful open season before issuing its certification for the
project. Mr. Van Tuyl continued to say that BP is supportive of
the state's objectives for the gas pipeline project, which are
jobs and natural gas for Alaskans, and future expansion of the
pipeline.
MR. VAN TUYL stated that BP's second concern is that AGIA can
result in one party subsidizing another. The language of
section 140 requires that initial shippers will bear additional
risk and cost by the possibility of increases in the shipping
tariff of 15 percent or more. It is good business to have an
expandable pipeline; however, increased rates to subsidize
expansion shippers put an additional risk and cost on initial
shippers. He suggested that instead, the state can write policy
to subsidize expansion shippers if it desires. He reminded the
committee that Congress makes clear by the enactment of the
Alaska Natural Gas Pipeline Act of 2004 (ANGPA), that rates for
initial shippers should not increase after mandatory expansion
of the pipeline.
8:44:52 AM
REPRESENTATIVE RAMRAS asked for clarification regarding the
expansion shipper subsidy.
8:45:35 AM
MR. VAN TUYL explained that AGIA, as drafted, would require all
of the initial shippers, including the state, to subsidize
expansion shippers. He reiterated that the state may subsidize
expansion shippers as a separate policy decision.
8:46:12 AM
REPRESENTATIVE RAMRAS asked whether Mr. Van Tuyl was referring
to a subsidy paid by rolled-in rates (RIR) or by the $500
million grant.
MR. VAN TUYL answered that the RIR subsidy is his concern.
8:46:58 AM
REPRESENTATIVE RAMRAS observed that even if BP participates in
the project as an initial shipper, it subsequently will be the
beneficiary of RIRs after more gas is discovered and it
participates in expansion.
8:48:07 AM
MR. VAN TUYL responded that the concern is with the initial
commitment required at open season. The initial investors will
be presented with a base toll that is included in the tariff
agreement. The state's policy may result in an increase to the
tariff even before the operation of the pipeline begins. BP
does anticipate participating in pipeline expansion; however,
undue risk for the initial shippers can prevent the construction
of the pipeline altogether.
8:49:15 AM
REPRESENTATIVE RAMRAS recalled that BP was supportive of last
year's gas pipeline legislation. BP's testimony anticipated
increasing the throughput on the Trans-Alaska Pipeline System
(TAPS) as well as participating in expansions of the gas
pipeline. Representative Ramras asked BP to provide for the
committee the estimate of the amount of gas it planned for the 4
billion cubic feet (Bcf) per day pipeline and subsequent
expansions. Even with firm transportation (FT) commitments,
RIRs will be beneficial to subsequent gas shipped by BP. The
calculation requested, he said, is how much additional gas BP
anticipated rolling in under last year's legislation. This
information will measure BP's exposure to the initial RIR cost,
balanced by estimates of expansions over the next 10 years.
8:52:53 AM
MR. VAN TUYL responded that the gas nominations into a pipeline
at open season are by a sealed bid. BP can not reveal its
strategy at this point due to the competitive aspect of the open
season. Additionally, future volumes to the pipeline will only
happen if companies have enough of a guarantee of rates to
participate in construction and bidding at open season.
8:54:26 AM
REPRESENTATIVE RAMRAS again requested that BP generate a graph
that provides different scenarios with different rates, sizes of
pipe, and tariffs. Also, he asked, the graph should include the
effect of the anticipated benefits from RIRs.
8:55:55 AM
MR. VAN TUYL assured the committee that BP would provide the
requested information. He suggested that if the initial toll
was anticipated to be $3 per million cubic feet (Mmcf),
delivering one Bcf per day, a RIR increase of 15 percent will
result in a cost increase of $200 million per year. Add to that
the potential impact of a previous 20 year FT commitment, and
BP's exposure will be billions of dollars.
8:57:05 AM
REPRESENTATIVE RAMRAS observed that it is known that there will
be expansions, thereby those costs can be anticipated, as can be
BP's benefit from participation in RIRs. BP could also build
many additional plants as the result of those expansions. The
initial exposure and benefits of RIRs can be estimated over the
next 20 years.
8:58:51 AM
MR. VAN TUYL indicated that BP will provide the estimates, but
restated his concern over the risk to initial shippers.
8:59:19 AM
REPRESENTATIVE RAMRAS also requested that BP provide its
previously submitted 50 year business plan graphic.
9:00:53 AM
MR. VAN TUYL continued his testimony by stating that ANGPA
specifies that rates for initial shippers should not increase in
the case of a mandatory expansion. He remarked:
This is from section 105(b) of {ANGPA], the FERC, the
commission it says which means the FERC, shall insure
that the rates do not require existing shippers on the
Alaska natural gas transportation project to subsidize
expansion shippers. Also, in order 2005, FERC put in
place a rebuttable presumption of rolled-in rates for
expansions, with a proviso, it says, provided it did
not require subsidization by initial shippers. ... In
conclusion, to provide guidance to potential shippers
in advance of the initial open season that is the
subject of this rule, the commission intends to
harmonize both objectives. And that is rate
predictability for initial shippers and reduction of
barriers to future oil exploration and production in
designing rates for future expansions of any Alaska
natural gas transportation projects. It is consistent
with our guiding principal that competition favors all
of the commission's customers as well as the
objectives of the act, here's the proviso, to adopt
rolled-in rate treatment up to the point that would
cause there to be a subsidy of expansion shippers by
initial shippers if any subsidy were to be found. ...
These two excerpts, from federal law and from federal
regulation, suggest that section 140 of AGIA and
federal law could be in conflict. ... Resolving [this
conflict] would add delay and uncertainty. ... I just
wanted to ensure that the nature of the producers
challenge to order 2005 (a) was clear. We're only
challenging the issue of whether or not FERC should be
able to dictate a design change after the conclusion
of the open season....
9:04:46 AM
REPRESENTATIVE DOOGAN said:
If there's a rebuttable presumption of RIRs and RIRs
by their very nature mean that the original shippers
are going to pay more, ... isn't any RIR, under your
definition, a subsidy?
9:05:36 AM
MR. VAN TUYL answered not necessarily. The nature of the
service of the line would affect the rate. He said that he
believes FERC's intent is to leave the language of its
regulations open so that FERC can look at subsidy cases
individually.
9:06:34 AM
REPRESENTATIVE DOOGAN requested a definition of subsidy.
MR. VAN TUYL said he did not believe the term was defined in the
federal law or FERC regulation.
9:07:19 AM
REPRESENTATIVE SAMUELS remarked:
The tariff is at $4, Anadarko has a find, compression
takes place your tariff goes under $3.50, but they use
up all the compression so you loop a little bit. When
Exxon has a find your tariff goes back to $4. So now
Anadarko started at $3.50, there're now paying $4.
You started at $4, you're paying the same thing you
agreed to. And now BG has a find but you have to loop
some more and it goes to $5. Now Exxon, BP, and
Anadarko are all paying more. What's a subsidy?
9:08:13 AM
MR. VAN TUYL told the committee that in this example, given the
magnitude of the increase, the difference could not be made up
in fuel usage. In addition, the difference could depend on the
total expected depreciable life of the line. He pointed out
that FERC wants to maintain the ability to look at rate
increases on a case by case basis.
9:10:06 AM
REPRESENTATIVE SAMUELS asked whether the addition of an offshore
gas discovery would drive the rates down.
9:10:35 AM
MR. VAN TUYL answered yes. In this case, he said, the state
would not be participating in the additional gas that is coming
from federal land.
9:10:49 AM
CHAIR KOHRING referred to BP's concern that AGIA would result in
an exclusive winner. He asked if BP could make recommendations
to improve the evaluation criteria.
MR. VAN TUYL suggested allowing the marketplace to determine
which company should be selected. In addition, he stated that
the approval process used by FERC is a good model of an
evaluation process.
9:11:57 AM
REPRESENTATIVE DOOGAN questioned how selection by the
marketplace would begin.
9:12:44 AM
MR. VAN TUYL explained that for the project to advance there
must be a successful initial open season, which is dependent on
the following two developments: the shippers must have a clear
framework of the resource rules; the shippers know that the
project can be built for a reasonable toll.
9:14:39 AM
REPRESENTATIVE RAMRAS thanked Mr. Van Tuyl for the clarity of
his testimony.
9:15:56 AM
MR. VAN TUYL continued to say that BP's motivation for its
challenge to ANGPA, order 2005, section 5(a), is that a mandated
re-design of the project will add cost and delay. He then
returned to BP's consideration of AGIA, section 43.90.110, and
noted that the $500 million grant was not requested by BP and
may attract underfinanced applicants. Rather than specifying
inducements, the state should ask the project sponsors to
propose inducements. The Palin Administration, he said,
believes that that the development of the project carries the
greatest risk. However, BP disagrees. The riskiest phase, for
the ultimate shippers, is the construction period. In fact, all
project risks flow to the resource owners who must make the FT
agreements. Mr. Van Tuyl said that the fourth area of concern
for BP is AS 43.90.310, which relates to the resource framework.
The royalty inducement terms are insufficient to encourage BP to
make transportation commitments. As drafted, the royalty
valuations depend on future, non-specific, regulations. In
addition, AGIA allows the state to switch from royalty gas in
value (RIV) to royalty gas in kind (RIK), and BP believes this
ability is detrimental to its interests.
9:20:57 AM
REPRESENTATIVE RAMRAS asked for an explanation of how FTs work
for the buyer.
9:22:43 AM
MR. VAN TUYL explained that the traditional firm transportation
commitment (FT1) is a cash commitment made by a shipper to a
pipeline company that guarantees that a certain payment will be
made whether the gas is ultimately shipped or not.
REPRESENTATIVE RAMRAS remarked:
[For example], so if I built a shipping center and I
had eight bays and I'm paying the bank a mortgage on
all eight of those storefronts, whether all eight of
them are rented, or six of them, or three of them.
MR. VAN TUYL affirmed the accuracy of Representative Ramras's
example. He added that the FT1 commitment could be for a term
of 20 to 30 years and equals a significant amount of money.
Furthermore, down the line, the marketing arm assumes risk when
marketing that gas, under the various terms and commitments.
9:25:53 AM
REPRESENTATIVE RAMRAS remarked:
A firm transportation commitment could very well be
years and years ... and so the exposure for the oil
companies is more significant when ... the sale price
is fixed but the shipping cost is subject to movement
over that period of time because it could be a 20 year
commitment on the sale price of that gas and yet the
cost of the tariff to deliver it there could move by
$.50, by $1, by $1.50. ... And the transportation cost
for moving that gas from the North Slope to Chicago is
an enormous part of the ... end cost of that gas, it
could be 40 percent. ... Forty, fifty percent, or
potentially more, of the cost of moving that gas is
absorbed by the tariff and if it's a third party
person who is using the $500 million and they're an
underfinanced sponsor they can go $10 billion over
budget and increases the tariff....
9:30:20 AM
MR. VAN TUYL expressed his hope that transportation costs will
represent 40 to 50 percent of the value of the product.
9:31:03 AM
REPRESENTATIVE SAMUELS asked whether, under normal
circumstances, customers and users take the shipping risk
through the FTs.
9:31:31 AM
MR. VAN TUYL replied that Representative Samuels's example is
not common; however, natural gas markets are unstable and in the
recent past utilities have sought relief by requesting
permission to extend commitments and move commitments upstream.
9:33:04 AM
REPRESENTATIVE SAMUELS surmised that FERC would not have an
opinion on who takes an FT commitment, therefore, if Chicago
Light and Power wants to buy from you at the wellhead, that
would be between Chicago Light and Power and BP.
9:33:20 AM
MR. VAN TUYL said yes, that was his understanding of the
process.
9:33:39 AM
REPRESENTATIVE SAMUELS further asked: "Would the Illinois
[public utilities commission] have a say in that, on what
Chicago Light and Power may or may not do regarding risk?"
9:33:48 AM
MR. VAN TUYL answered yes, by their regulation of utilities.
9:34:09 AM
REPRESENTATIVE SAMUELS assumed that a willingness to take some
of the risk would result in a commercial agreement to discount
the wellhead price.
9:34:18 AM
MR. VAN TUYL responded that yes, there would be a commercial
agreement. He then returned to his presentation and restated
the difficulties created by RIV and RIK switching, and noted
that the solution to the unintended consequences are left to
future legislation. He then called the committee's attention to
section 320 of AGIA and said that it relates to gas production
taxes and defines that the rates are not established until after
the conclusion of the open season. Mr. Van Tuyl indicated that
the shipper would not know the production tax rate prior to
making its FT commitment, and this uncertainty creates
additional risk. He testified that AGIA is silent on the
majority of other payments that will be due to the state.
Resource owners will pay all the costs and bear the risks in
building the pipeline whether or not they own it. Furthermore,
resource owners will pay all the costs, directly or indirectly
through the tariff. Therefore, they must know the fiscal rules
that will govern the project before making commitments and
successfully obtaining financing. Sections 310 and 320 do not
adequately address the details needed to solve the upstream
issues, he stressed.
9:38:11 AM
MR. VAN TUYL pointed out that, under the terms of AGIA, the
resource owners are the state and the lessees. Risks inherent
to the resource are price and production. Risks to the lessee
are the possibility of changes in fiscal terms and the risks
associated with construction of the pipeline. Mr. Van Tuyl
provided a chart that displayed names, capital costs, and
sponsors of the ten largest oil and gas pipeline project
financings.
9:41:18 AM
REPRESENTATIVE RAMRAS asked about the competitive risk of not
building a pipeline and thereby losing the future market for the
North Slope leases.
9:43:19 AM
MR. VAN TUYL responded that it is very important that the
resource owners begin preparations to demonstrate to the future
markets that Alaska's gas will be available.
9:44:29 AM
REPRESENTATIVE SAMUELS questioned why the Trans-Alaska Pipeline
System (TAPS) is not included in the chart of pipeline project
financings.
9:44:57 AM
MR. VAN TUYL answered that TAPS was owner financed.
9:45:31 AM
REPRESENTATIVE SAMUELS asked:
Assuming that we can set a tax rate now, and set aside
the constitutional issue which will be decided by the
supreme court ... from BP's perspective, is it better
to know your tax rate now, before the game starts?
9:46:15 AM
MR. VAN TUYL advised the committee that the fiscal framework
must be established before the open season.
9:46:55 AM
REPRESENTATIVE SAMUELS clarified that he was referring to
establishing the tax rate at the time of the application,
instead of shortly before open season.
9:47:13 AM
MR. VAN TUYL noted that AGIA requires that the tax rate on gas
would not be established until after open season.
9:48:40 AM
REPRESENTATIVE SAMUELS stressed that the intent of AGIA is to
establish the tax rate before open season.
9:48:59 AM
MR. VAN TUYL referred to Section 43.90.320(a), line 7 and stated
that the calculation of the tax exemption is based on the
production tax in effect at the conclusion of the first binding
open season. BP, he repeated, prefers tax rate certainty before
making its FT commitment.
9:49:17 AM
REPRESENTATIVE SAMUELS questioned whether BP would prefer
knowing the tax rate before the application period begins.
9:49:59 AM
MR. VAN TUYL expressed his opinion that the fiscal framework
requested by BP extends beyond the establishment of the
production tax rate and exemption. Many other elements of the
revenue to the state must also be addressed. In answer to a
question, he added that, unlike Alaska's tax structure, Canadian
property taxes are a small portion of the government take from
this project. Also unlike Alaska, federal loan guarantees and
incentives are known, and will not change, during the
development and construction of the project.
9:51:31 AM
CHAIR KOHRING asked whether permitting and regulations regarding
the Canadian portion of the pipeline route will be an obstacle.
9:52:23 AM
MR. VAN TUYL assured the committee that BP has established
relationships with the Canadian government and First Nations and
that it is confident that future negotiations will be
successful.
9:54:02 AM
REPRESENTATIVE RAMRAS opined that gas and oil maintain a cost
ratio of approximately a 9:1 ratio.
9:54:49 AM
MR. VAN TUYL described the actual energy equivalency ratio as
6:1 with the price increase attributed to the higher market
value of gas.
9:55:18 AM
REPRESENTATIVE RAMRAS recalled that the TAPS tariff was
increased recently. He said that he felt it was important to
discuss the cost of the natural gas pipeline tariff in relation
to the barrel of energy equivalent for the TAPS line tariff. He
suggested that a comparison by DOR would help committee members
appreciate the risk in moving a barrel of energy equivalent from
the North Slope during the next ten years, as opposed to the
cost of transporting oil by the TAPS which began production 30
years ago.
9:58:45 AM
MR. VAN TUYL confirmed that historic knowledge can help to
understand the differences between the transportation costs of
oil and gas. The proportion of transportation cost to the value
of the commodity for gas is significantly higher, therefore, gas
pipelines are marginal in profit, and are regulated and financed
differently.
10:00:28 AM
REPRESENTATIVE RAMRAS expressed his belief that the state would
not like to pay transportation costs for shipping oil through
TAPS that are relatively equal to the proposed tariff on the
shipment of gas. He suggested that a comparison of these costs
would be useful to the legislature.
10:01:48 AM
REPRESENTATIVE DOOGAN pointed out that resource owners are
limited to the people of the state of Alaska, and do not include
lease holders. He asked whether the producers need to know the
fiscal details of gas, or of both oil and gas.
10:03:08 AM
MR. VAN TUYL reminded the committee that resource owners also
include the owners of private and federal lands. In response to
the question, he said that the scope of the fiscal framework
necessary includes both oil and gas, and also must include a
risk reward balance that will work for all of the parties.
10:04:12 AM
REPRESENTATIVE DOOGAN expressed his understanding that the
royalties are paid to the state, as owners of the resource, and
taxes are paid to the state as the sovereign political
jurisdiction. He said that he was interested in knowing whether
the state can, through the royalty, provide BP sufficient fiscal
certainty to ensure its participation in the open season. He
also asked whether BP would be willing to sell its gas to the
state for a fixed price.
10:06:51 AM
MR. VAN TUYL stated that BP will sell its gas under commercially
reasonable terms. He then continued his presentation by listing
the project risks borne by the pipeline company under the AGIA
legislation. However, the pipeline company is a regulated
entity and is granted a regulated rate of return, FT
commitments, and is also able to pass the risks, via the toll,
back to the resource owner. BP wants to ensure a low cost and
successful project; in fact, those bearing the risk are
commercially motivated to manage the costs of construction.
10:09:09 AM
MR. VAN TUYL summarized by saying that BP wants and needs a gas
pipeline for its future business in Alaska. BP also supports an
open and transparent process that includes participation by the
administration, the legislature, and the people of Alaska, and
that leads to the successful completion of the project. In
addition, for the project to proceed, there must be a mutually
agreeable upstream framework. Finally, midstream details must
be addressed to ensure that there are no unintended
consequences.
10:12:10 AM
REPRESENTATIVE SAMUELS asked whether BP can ship gas without the
cooperation of its partners, ConocoPhillips Alaska, Inc. and
ExxonMobil Corporation.
MR. VAN TUYL emphasized that he questioned whether a project of
this scale could be successful without the cooperation of the
state, BP, ConocoPhillips Alaska, Inc., and ExxonMobil
Corporation.
10:13:29 AM
REPRESENTATIVE SAMUELS re-stated his question and said,
"If three of four agreed ... that you had enough gas
at the open season, according to the operating
agreements, can you sell gas other than just for the
field usage ... could you sell a commercial quantity
of gas.
10:14:17 AM
MR. VAN TUYL opined that the operating agreements would not
prevent parties from selling gas independently.
10:14:54 AM
[HB 177 was held in committee]
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Oil and Gas meeting was adjourned at 10:17
a. m.
10:17:08 AM
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