Legislature(2007 - 2008)SENATE FINANCE 532

03/21/2007 05:30 PM OIL & GAS


Download Mp3. <- Right click and save file as

Audio Topic
05:39:15 PM Start
05:39:44 PM HB177|| SB104
06:33:47 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- New Time & Location Change --
Joint with Senate Resources Committee
+= HB 177 NATURAL GAS PIPELINE PROJECT TELECONFERENCED
Heard & Held
-- Public Testimony --
Along with companion bill SB 104
                    ALASKA STATE LEGISLATURE                                                                                  
                         JOINT MEETING                                                                                        
             HOUSE SPECIAL COMMITTEE ON OIL AND GAS                                                                           
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                         March 21, 2007                                                                                         
                           5:39 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
HOUSE OIL AND GAS                                                                                                               
                                                                                                                                
 Representative Vic Kohring, Chair                                                                                              
 Representative Kurt Olson, Vice Chair                                                                                          
 Representative Nancy Dahlstrom                                                                                                 
 Representative Jay Ramras                                                                                                      
 Representative Ralph Samuels                                                                                                   
 Representative Mike Doogan                                                                                                     
 Representative Scott Kawasaki                                                                                                  
                                                                                                                                
SENATE RESOURCES                                                                                                                
                                                                                                                                
 Senator Charlie Huggins, Chair                                                                                                 
 Senator Bert Stedman, Vice Chair                                                                                               
 Senator Lyda Green                                                                                                             
 Senator Gary Stevens                                                                                                           
 Senator Lesil McGuire                                                                                                          
 Senator Bill Wielechowski                                                                                                      
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
HOUSE OIL AND GAS                                                                                                               
                                                                                                                                
 All members present                                                                                                            
                                                                                                                                
SENATE RESOURCES                                                                                                                
                                                                                                                                
 Senator Tom Wagoner                                                                                                            
                                                                                                                                
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                                                                                                           
                                                                                                                                
SENATE BILL NO. 104                                                                                                             
"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                                                                      
                                                                                                                                
BILL: SB 104                                                                                                                  
SHORT TITLE: NATURAL GAS PIPELINE PROJECT                                                                                       
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
03/05/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/05/07       (S)       RES, JUD, FIN                                                                                          
03/14/07       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/14/07       (S)       Heard & Held                                                                                           
03/14/07       (S)       MINUTE(RES)                                                                                            
03/16/07       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/16/07       (S)       Heard & Held                                                                                           
03/16/07       (S)       MINUTE(RES)                                                                                            
03/19/07       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/19/07       (S)       Heard & Held                                                                                           
03/19/07       (S)       MINUTE(RES)                                                                                            
03/21/07       (S)       RES AT 5:30 PM SENATE FINANCE 532                                                                      
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JERRY MCCUTCHEON                                                                                                                
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:   During the  hearing on  HB 177,  testified                                                               
against the construction of a gas pipeline.                                                                                     
                                                                                                                                
PAUL LAIRD, General Manager                                                                                                     
Alaska Support Industry Alliance ("Alliance")                                                                                   
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on HB 177 and SB 104.                                                                            
                                                                                                                                
DONALD BENSON                                                                                                                   
Palmer, Alaska                                                                                                                  
POSITION  STATEMENT:   Speaking  on  his  own behalf  during  the                                                               
hearing on  HB 177,  testified in support  of the  Alaska Gasline                                                               
Inducement Act (AGIA).                                                                                                          
                                                                                                                                
Karen Rhoades                                                                                                                   
Wasilla, Alaska                                                                                                                 
POSITION  STATEMENT:   Speaking  on  her  own behalf  during  the                                                               
hearing on HB 177, testified in support of AGIA.                                                                                
                                                                                                                                
JOHN BROWN, Field Representative                                                                                                
International Union of Operating Engineers (IUOE), Local 302                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:   During the hearing on HB  177, testified on                                                               
AGIA.                                                                                                                           
                                                                                                                                
GEORGE BERRY                                                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:   Speaking  on  his  own behalf  during  the                                                               
hearing  on HB  177, testified  in  support of  adding a  project                                                               
labor agreement to AGIA.                                                                                                      
                                                                                                                              
TAMMIE WILSON                                                                                                                   
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:   Speaking  on  her  own behalf  during  the                                                               
hearing  on HB  177, testified  in  support of  adding a  project                                                               
labor agreement to AGIA.                                                                                                        
                                                                                                                                
DAN WARD, Member                                                                                                                
IUOE, Local 302                                                                                                                 
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:   Speaking  on  his  own behalf  during  the                                                               
hearing  on HB  177, testified  in  support of  adding a  project                                                               
labor agreement to AGIA.                                                                                                        
                                                                                                                                
PAUL D. KENDALL                                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Speaking on  his own behalf, testified on HB                                                               
177 and SB 104.                                                                                                                 
                                                                                                                                
DAVID GOTTSTEIN, Co-Chair                                                                                                       
Backbone Campaign                                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   During the hearing on HB  177, testified in                                                               
support of AGIA.                                                                                                                
                                                                                                                                
STEVE JOSWIAK, President                                                                                                        
Central Labor Council                                                                                                           
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:   During the hearing on HB  177, testified in                                                               
support of adding a project labor agreement to AGIA.                                                                            
                                                                                                                                
KEVIN POMEROY, Member                                                                                                           
Laborers Local 942                                                                                                              
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:   Speaking  on  his  own behalf  during  the                                                               
hearing  on HB  177, testified  in  support of  adding a  project                                                               
labor agreement to AGIA.                                                                                                        
                                                                                                                                
CAROL HETTER, Member                                                                                                            
Laborers Local 942                                                                                                              
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:   Speaking  on  her  own behalf  during  the                                                               
hearing  on HB  177, testified  in  support of  adding a  project                                                               
labor agreement to AGIA.                                                                                                        
                                                                                                                                
TIM SHARP, Business Manager                                                                                                     
Alaska District Council of Laborers;                                                                                            
Business Manager                                                                                                                
Laborers Local 942                                                                                                              
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:   During the hearing on HB  177, testified in                                                               
support  of  AGIA,  and  to  the  addition  of  a  project  labor                                                               
agreement.                                                                                                                      
                                                                                                                                
REE KISSINGER, Apprentice                                                                                                       
International Brotherhood of Electrical Workers Local 1547                                                                      
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:   Speaking  on  his  own behalf  during  the                                                               
hearing  on HB  177, testified  in  support of  adding a  project                                                               
labor agreement of AGIA.                                                                                                        
                                                                                                                                
DIANA SMITH, Member                                                                                                             
Alaska State Employees Association (ASEA)                                                                                       
Fairbanks, Alaska                                                                                                               
Position  Statement:   Speaking  on  her  own behalf  during  the                                                               
hearing  on HB  177, testified  in support  of union  and Alaskan                                                               
hire.                                                                                                                           
                                                                                                                                
SUZANNA BOBINSKI, Member                                                                                                        
Alaska State Employees Association (ASEA)                                                                                       
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:  Speaking  on  her  own  behalf  during  the                                                               
hearing  on HB  177, testified  in support  of union  and Alaskan                                                               
hire.                                                                                                                           
                                                                                                                                
JAMIE BASSETT, Member                                                                                                           
Alaska State Employees Association (ASEA) Local 52                                                                              
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:   Speaking  on  her  own behalf  during  the                                                               
hearing  on HB  177,  testified  in support  of  a project  labor                                                               
agreement for the gas pipeline project.                                                                                         
                                                                                                                                
WILLIAM HUNT                                                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:   During the hearing on HB  177, testified in                                                               
support  of  a  project  labor agreement  for  the  gas  pipeline                                                               
project.                                                                                                                        
                                                                                                                                
MICHAEL COELHO                                                                                                                  
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:   During the hearing on HB  177, testified in                                                               
support  of  a  project  labor agreement  for  the  gas  pipeline                                                               
project.                                                                                                                        
                                                                                                                                
KATIE MACKINNON, Member                                                                                                         
Alaska State Employees Association                                                                                              
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:   Speaking  on  her  own behalf  during  the                                                               
hearing on  HB 177, testified in  support of Alaska's use  of its                                                               
resources.                                                                                                                      
                                                                                                                                
BILL JOHNSON Member                                                                                                             
Laborers;                                                                                                                       
Member                                                                                                                          
American Federation of State, County, and Municipal                                                                             
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:   Speaking  on  his  own behalf  during  the                                                               
hearing  on HB  177,  testified  in support  of  a project  labor                                                               
agreement for gas pipeline project.                                                                                             
                                                                                                                                
VINCE BELTRAMI, President                                                                                                       
Alaska American  Federation of Labor  and Congress  of Industrial                                                               
Organizations (AFL-CIO)                                                                                                         
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   During the hearing on HB  177, testified in                                                               
support  of  a  project  labor agreement  for  the  gas  pipeline                                                               
project.                                                                                                                        
                                                                                                                                
DANIEL O'LEARY, Business Agent                                                                                                  
Iron Workers Local 751                                                                                                          
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified on HB 177 and SB 104.                                                                            
                                                                                                                                
DUFFY HALLADAY, Member                                                                                                          
Laborers International Local 942                                                                                                
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:   Speaking  on  his  own behalf  during  the                                                               
hearing  on HB  177,  testified  in support  of  a project  labor                                                               
agreement for the gas pipeline project.                                                                                         
                                                                                                                                
GERALD KW BROWN                                                                                                                 
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:   During the hearing on HB  177, testified in                                                               
support of local hire for the Alaska gas pipeline project.                                                                      
                                                                                                                                
W. T. REEVES                                                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:   Asked a question about  the Dalton Highway;                                                               
testified on HB 177 and SB 104.                                                                                                 
                                                                                                                                
MERRICK PIERCE                                                                                                                  
North Pole, Alaska                                                                                                              
POSITION STATEMENT:  Testified on HB 177 and SB 104.                                                                            
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR  CHARLIE HUGGINS  called  the joint  meeting  of the  House                                                             
Special  Committee  on  Oil  and Gas  and  the  Senate  Resources                                                               
Standing Committee to  order at 5:39:15 PM.  Present  at the call                                                             
to order  from the House  Special Committee  on Oil and  Gas were                                                               
Representatives  Samuels, Doogan,  Kawasaki, Olson,  and Kohring;                                                               
Representatives Dahlstrom  and Ramras arrived as  the meeting was                                                               
in  progress.    Present  from   the  Senate  Resources  Standing                                                               
Committee  were Senators  Green, Stedman,  and Huggins;  Senators                                                               
Stevens, McGuire, and Wielechowski arrived  as the meeting was in                                                               
progress.                                                                                                                       
                                                                                                                                
HB 177-NATURAL GAS PIPELINE PROJECT                                                                                           
SB 104-NATURAL GAS PIPELINE PROJECT                                                                                           
                                                                                                                                
5:39:44 PM                                                                                                                    
                                                                                                                                
CHAIR HUGGINS announced that the  only order of business would be                                                               
SENATE  BILL NO.  104, "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;" and 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."                                                                                                                          
                                                                                                                                
CHAIR HUGGINS invited public testimony on HB 177 and SB 104.                                                                    
                                                                                                                                
5:40:55 PM                                                                                                                    
                                                                                                                                
JERRY MCCUTCHEON  told the committees  that had the  gas pipeline                                                               
been constructed in the 1980s, Prudhoe  Bay, as we know it, would                                                               
not exist.  He continued to say:                                                                                                
                                                                                                                                
     And  more than  half of  the state's  revenue would  be                                                                    
     missing.   That  admission  came out  of the  Murkowski                                                                    
     Administration.   Prudhoe  Bay has  produced more  than                                                                    
     five billion  barrels more oil  than Prudhoe  Bay would                                                                    
     have  produced had  the oil  companies constructed  the                                                                    
     gas line  back in  the 1980s.  ... The  same parameters                                                                    
     applied  in  the  "80s  still  apply  today,  and  will                                                                    
     continue  to apply  for another  decade,  maybe two  or                                                                    
     three  more  decades. ...  It  is  the decline  in  gas                                                                    
     pressure that  is causing the decline  in oil recovery.                                                                    
     There is more oil to  be produced from Prudhoe Bay than                                                                    
     has been produced.  There's  another 15 billion barrels                                                                    
     of  recoverable oil  but nobody  really  wants to  talk                                                                    
     about and  the gas  is needed to  obtain that  oil. ...                                                                    
     The  Mackenzie River  gas line  costs escalated  ... to                                                                    
     $16 billion  [Canadian dollars]. ... That  gas line was                                                                    
     the one they used as  an analogous example by Pedro van                                                                    
     Meurs.   So we  have a total  increase of  300 percent,                                                                    
     that would make the gas  line, Alcan gas line, from $20                                                                    
     [billion] to  $60 billion. ...  Larry Persily,  when he                                                                    
     was   deputy  commissioner   of   Revenue,  told   LBA,                                                                    
     Legislative  Budget  and  Audit,   in  2004,  that  the                                                                    
     alleged 35  Tcf would  only sustain  the four  and one-                                                                    
     half billion  cubic feet per  day Alcan gas line  for a                                                                    
     little over a decade.   The oil companies really needed                                                                    
     60 cubic  per day.  The  North Slope does not  have the                                                                    
     35 Tcf, only  29.  The [Alaska] Oil  & Gas Conservation                                                                    
     Commission said  that the other reservoirs,  which they                                                                    
     had counted  in the 35  Tcf, are not  available because                                                                    
     gas withdrawal  from them would  cause serious  loss of                                                                    
     oil  recovery.    Thus,  only  Prudhoe  Bay  and  Point                                                                    
     Thomson   are  available   for   gas  withdrawal.   ...                                                                    
     Premature gas  withdrawal for a  gas line  also applies                                                                    
     to  Point Thomson.   In  the case  of Prudhoe  Bay, gas                                                                    
     recycling  ... may  have to  continue for  several more                                                                    
     decades for  oil production to be  reasonably complete.                                                                    
     ... In the case of  Point Thomson, after the litigation                                                                    
     is settled,  it will be  more than a decade  before the                                                                    
     production of Point Thomson gas  liquids can start. ...                                                                    
     Gas will  have to be recycled  for as much as  a decade                                                                    
     to prevent  retrograde condensation of the  gas liquids                                                                    
     and oil condensates ... before  Point Thomson's gas can                                                                    
     be produced for a gas line.                                                                                                
                                                                                                                                
5:45:37 PM                                                                                                                    
                                                                                                                                
PAUL  LAIRD, General  Manager, Alaska  Support Industry  Alliance                                                               
("Alliance"),  said that  the "Alliance"  are the  companies that                                                               
provide  oil producers  with  the goods  and  services that  make                                                               
Alaska's  oil,   gas,  and  mining  industries   possible.    The                                                               
"Alliance's" 400 member companies  generate more than 30,000 jobs                                                               
for  Alaskans.   Mr. Laird  said that  the "Alliance"  is working                                                               
hard to  understand the  details and  implications of  the Alaska                                                               
Gasline  Inducement Act  (AGIA), and  it is  concerned about  the                                                               
$500 million state matching contribution.  He remarked:                                                                         
                                                                                                                                
     It's  unnecessary and  it may  not be  the best  use of                                                                    
     state funds.  We're  concerned about any provision that                                                                    
     transforms pretenders into  contenders by conceding ...                                                                    
     a  licensee without  financial backing  at the  time of                                                                    
     certification  or   additional  years  to   sanction  a                                                                    
     project.     By  the  administration's   timetable  for                                                                    
     certification, this  could delay first gas  sales until                                                                    
     the early to mid 2020s.  The "Alliance"  believes    in                                                                    
     having a  level playing  field for all  applicants, but                                                                    
     we  oppose provisions  that  promote artificial  parody                                                                    
     among the players.  Alaska's  interests are best served                                                                    
     if  the  most  competitive  project  is  built  by  the                                                                    
     strongest developer.   We're  concerned that  there are                                                                    
     no  objective criteria  for judging,  for weighing  the                                                                    
     relative   importance  of   various  elements   of  the                                                                    
     application, assessing  the risks associated  with each                                                                    
     proposal, and  making the selection  in an  open, fair,                                                                    
     and  transparent manner.    We're  concerned about  any                                                                    
     process  mandating the  state  to choose  a winner  and                                                                    
     promote a monopoly at the  expense of other prospective                                                                    
     developers. ...  Once the state  chooses a  licensee to                                                                    
     build a pipeline,  will the producers come  to the open                                                                    
     season?   We  believe the  bill, as  currently drafted,                                                                    
     puts  too  much emphasis  on  the  short term  risk  of                                                                    
     pipeline builders,  and does too little  to address the                                                                    
     long term risks of shippers.   Upstream issues ... need                                                                    
     to  be  resolved first,  if  Alaska  truly wants  North                                                                    
     Slope producers to  commit their gas to  a project. ...                                                                    
     We  look  forward to  working  with  you and  with  the                                                                    
     governor and  her team to  help transform  Alaska's gas                                                                    
     into decades  of clean,  reliable, domestic  energy for                                                                    
     Americans, and generations of prosperity for Alaskans.                                                                     
                                                                                                                                
5:49:17 PM                                                                                                                    
                                                                                                                                
DONALD BENSON, said he is a  life-long Alaskan, and would like to                                                               
encourage the legislature  to support AGIA, with  the addition of                                                               
take-off points that  include Alaska's cities and  villages.  Mr.                                                               
Benson said  that natural gas  is the cleanest and  most reliable                                                               
type  of heat  and can  be backed  with hydroelectric,  wind, and                                                               
solar [energy].   He stressed that  gas prices have risen  in the                                                               
past years, and that  Alaska needs to bring its gas  home.  It is                                                               
an  investment in  Alaska and  in the  United States,  Mr. Benson                                                               
said.                                                                                                                           
                                                                                                                                
5:51:04 PM                                                                                                                    
                                                                                                                                
KAREN  RHOADES,  said  she  wanted  to give  her  opinion,  as  a                                                               
constituent.   She  told the  committees  that when  she and  her                                                               
husband  started their  small business,  they took  a significant                                                               
risk;  they  weighed the  pros  and  cons  and decided  that  the                                                               
potential for  success was worth taking  the risk.  She  said she                                                               
believes that  the $500 million  incentive is worth the  risk and                                                               
is essential  to the success of  the project.  She  said that she                                                               
questioned the  opinions of  those who  compare AGIA  to previous                                                               
failed projects.   This project is needed by the  nation, and she                                                               
said  that she  trusts  the  ability of  the  state  to choose  a                                                               
builder and make good decisions.   Ms. Rhodes said that this is a                                                               
step  in  Alaska's  destiny,  and  she  would  like  to  see  the                                                               
legislature go forward with this plan.                                                                                          
                                                                                                                                
5:53:41 PM                                                                                                                    
                                                                                                                                
JOHN  BROWN, International  Union of  Operating Engineers,  Local                                                               
302, said that  Alaska's natural gas has the  potential to secure                                                               
our economic future,  and he supported the  governor's efforts to                                                               
cause a  pipeline to  be constructed.   However,  we should  do a                                                               
better  job  than we  did  on  the Trans-Alaska  Pipeline  System                                                               
(TAPS).  He said that he  agreed with the inclusion of everything                                                               
the  state  needs from  the  project  in  the  bill.   Mr.  Brown                                                               
emphasized  that we  need  a  low tariff  to  ensure that  Alaska                                                               
receives fair compensation for its  resource and that independent                                                               
companies can afford  to ship their gas in the  pipeline.  One of                                                               
the ways  to ensure a  low tariff is  not addressed in  AGIA, and                                                               
that is to  ensure a steady productive, and  predictive, cost and                                                               
supply of labor.   By including the requirement  for a negotiated                                                               
project  labor  agreement  in  the  bill,  we  can  ensure  labor                                                               
stability  through a  no-strike,  no-lockout provision.   We  can                                                               
also be  sure of a  competent and  trained workforce.   Mr. Brown                                                               
urged members of  the committee to include the  requirement for a                                                               
licensee to  commit to negotiate  a project labor  agreement, for                                                               
construction of the pipeline, and all related infrastructure.                                                                   
                                                                                                                                
5:56:10 PM                                                                                                                    
                                                                                                                                
GEORGE BERRY stated that he was a  member of Local 959, but he is                                                               
testifying on  his own  behalf.   He said  that he  supports AGIA                                                               
legislation  for  its overall  imaginative  approach  to get  new                                                               
producers  on  the  North  Slope   for  the  development  of  gas                                                               
production.  However, he also  supports the addition of a project                                                               
labor agreement  that can bring  predictive labor  costs, maximum                                                               
Alaska hire,  and training  programs to the  project.   Mr. Berry                                                               
said that  after 30 years of  working on TAPS, he  feels that the                                                               
prior labor agreement was the best benefit to Alaskans.                                                                         
                                                                                                                                
5:58:08 PM                                                                                                                    
                                                                                                                                
TAMMIE  WILSON said  she likes  the fact  that AGIA  requires the                                                               
project  winner  to  locate its  local  headquarters  in  Alaska.                                                               
However,  it does  not specify  where the  hiring halls  would be                                                               
located.  She said:                                                                                                             
                                                                                                                                
     I  am  very  concerned  about section  number  15  that                                                                    
     addresses the  actual number of  Alaskans to  be hired.                                                                    
     This  part states  the project  winner  will commit  to                                                                    
     hire qualified residents from  throughout the state for                                                                    
     management, engineering and  other things, and contract                                                                    
     with  businesses located  in this  state to  the extent                                                                    
     permitted by  law.  I  asked [Tom  Irwin, Commissioner,                                                                    
     Department of Natural Resources  (DNR)] what the number                                                                    
     was  and they  told me  that was  "zero."   So, if  the                                                                    
     actual number is zero, why  is this statement even part                                                                    
     of the  bill? ...  It was also  stated that  the reason                                                                    
     there was no project labor  agreement ... was that they                                                                    
     were looking  for workers  to not  just have  jobs, but                                                                    
     careers in the  oil industry.  And they  will take care                                                                    
     of labor issues  later. ... Unions are  careers. ... To                                                                    
     those  of us  in  Fairbanks, this  is  the real  issue.                                                                    
     When  Marcia Davis  came here,  from the  Department of                                                                    
     Revenue, she said, "We  have specifically not addressed                                                                    
     whether  there's  a  project labor  agreement  in  this                                                                    
     structure, and  I know that  is an area of  concern for                                                                    
     many  of  those in  Fairbanks.  ...  And the  strongest                                                                    
     applications are going to be  the ones that ... Alaskan                                                                    
     hire.  ...  This  is  going  to  be  an  Alaskan  state                                                                    
     controlled job development so this  is going to be done                                                                    
     within our Department of  Administration." ... [We are]                                                                    
     asking you  to make  sure that  Alaskans are  truly the                                                                    
     first priority for  these jobs. ...  There  are men and                                                                    
     women [here]  of all  ages to  show how  important this                                                                    
     issue is  to this community.   Please protect  jobs for                                                                    
     Alaskans by  putting in strong  language that  lets all                                                                    
     those, that  will submit an  application, know  that if                                                                    
     they do  not hire  Alaskans they will  not be  the ones                                                                    
     chosen for this project.                                                                                                   
                                                                                                                                
6:00:52 PM                                                                                                                    
                                                                                                                                
DAN WARD said that he was testifying in support of his union,                                                                   
IUOE, Local 302, and to show his support of AGIA, and the                                                                       
addition of a project labor agreement.                                                                                          
                                                                                                                                
6:01:25 PM                                                                                                                    
                                                                                                                                
PAUL  D. KENDALL  said  he was  speaking as  a  citizen, and  was                                                               
encouraged to  see a  project of such  magnitude discussed  in an                                                               
open  and  honest  modality.    Mr.  Kendall  said  that  he  was                                                               
convinced that  the construction of two  separate pipelines needs                                                               
to be addressed.   The Canadian gas pipeline, when  looked at for                                                               
the next 15  years, is a tremendous gamble  because the producers                                                               
and the  state can not know  what will happen to  future markets,                                                               
applications, and  prospectives.  Mr.  Kendall said that  we also                                                               
need to  look at a sovereign  gas pipeline leading to  the people                                                               
of Alaska.   Because of the amount  of time it will  take for the                                                               
gas to  be flowing through the  big line, he suggested,  it would                                                               
be  better to  run a  small  line to  move the  gas to  Fairbanks                                                               
immediately.  He  also noted that the large producers  are not at                                                               
the table, in an open  and frank manner of partnership, promising                                                               
that their in-kind  gas is available to Alaska at  this time.  He                                                               
continued to say:                                                                                                               
                                                                                                                                
     First,  I  hope  you'll  give the  opportunity  to  any                                                                    
     testifier or [Request for  Proposal] proposal person to                                                                    
     swear themselves  in, in some  gauge of  testimony. ...                                                                    
     It  is my  belief that  Alaska should  own and  control                                                                    
     12.5 percent of the  station's spherical content of the                                                                    
     pipeline.    Any pipeline  that  leaves  any field,  we                                                                    
     should ...  tie that  in as an  unrelinquished position                                                                    
     that we  own the  space within  the pipeline.  ... This                                                                    
     should  be  a  proprietary  right and  it  gives  us  a                                                                    
     multitude of  avenues to  participate and  to authorize                                                                    
     and to gauge what is happening....                                                                                         
                                                                                                                                
6:04:50 PM                                                                                                                    
                                                                                                                                
DAVID  GOTTSTEIN, Co-Chair,  Backbone Campaign,  said that  he is                                                               
here today  to encourage  the committee to  complete the  task of                                                               
refining and passing  AGIA.  He stated that AGIA  is an excellent                                                               
platform  for  marketing  Alaska's   gas,  offers  a  competitive                                                               
framework, and  outlines criteria  that are  values to  the state                                                               
and residents.   He cautioned  against endless debate  and opined                                                               
that the  $500 million incentive  is not  a give-away, but  is an                                                               
important  component  that reduces  the  risk  and increases  the                                                               
value of project.   Mr. Gottstein said that the  state should get                                                               
more from a competitive bidding  process.  The Backbone Campaign,                                                               
he  continued,  believes  that   the  bids  should  include  time                                                               
commitments,  and that  time extensions  are not  necessary.   He                                                               
further  cautioned  against adding  language  to  AGIA that  will                                                               
prevent  passage of  the bill,  and thereby,  work in  ExxonMobil                                                               
Corporation's favor.                                                                                                            
                                                                                                                                
6:07:46 PM                                                                                                                    
                                                                                                                                
STEVE  JOSWIAK, Central  Labor Council,  asked  the committee  to                                                               
consider  a  project labor  agreement  for  a sustainable  Alaska                                                               
workforce.    He  said  that   a  labor  agreement  benefits  all                                                               
Alaskans, and that its inclusion  worked successfully for the oil                                                               
pipeline.                                                                                                                       
                                                                                                                                
KEVIN POMEROY  said that he  is a  member of Laborers  Local 942,                                                               
and that he  believes it is important to include  the language of                                                               
a project labor  agreement in AGIA.  In his  experience, he said,                                                               
many  laborers  immediately leave  Alaska  at  the end  of  their                                                               
employment.    A  project  labor   agreement  would  ensure  that                                                               
Alaskans are working and that wages stay in the local economy.                                                                  
                                                                                                                                
CAROL HETTER said she is in  support of adding language [to AGIA]                                                               
for a project  labor agreement.  She emphasized that  she did not                                                               
feel this addition would complicate the bill.                                                                                   
                                                                                                                                
TIM  SHARP,   Business  Manager,   Alaska  District   Council  of                                                               
Laborers; Business  Manager, Laborers Local 942,  stated that the                                                               
Alaska  District  Council  of  Laborers  is  comprised  of  5,000                                                               
construction  workers, and  that  Laborers  Local 942  represents                                                               
1,300  pipeline  building  trades   and  heavy  highway  workers.                                                               
Laborers, he  said, want to  be on  record with their  support of                                                               
AGIA, and of a square deal  for Alaskan workers through a project                                                               
labor agreement.   We  want to avoid  the present  scenario where                                                               
workers fly from out-of-state to  jobs in the Alaskan oil fields.                                                               
Mr.  Sharp said  that  the main  piece missing  from  AGIA is  to                                                               
enforce residency, and  a preference for Alaskan  hire, through a                                                               
project  labor agreement  (PLA).   Mandating a  PLA in  AGIA will                                                               
insure that  Alaskan workers will  be dispatched  through Alaskan                                                               
hiring halls, Alaskan apprentices  will be afforded opportunities                                                               
to learn their  craft, and that wages for  medical and retirement                                                               
benefits  will  stay   in  Alaska.    A  PLA   can  also  include                                                               
enforceable  Alaska Native  hire provisions  to help  address the                                                               
problem  of the  85  percent unemployment  rate  in some  Alaskan                                                               
villages.  Mr.  Sharp concluded by encouraging  the committees to                                                               
make sure that  a PLA is in  place, as a part of  AGIA, to ensure                                                               
that  Alaskan workers  receive the  maximum benefit  possible for                                                               
the development of Alaskan resources.                                                                                           
                                                                                                                                
6:13:28 PM                                                                                                                    
                                                                                                                                
REE KISSINGER, said  that he is an  apprentice with International                                                               
Brotherhood of  Electrical Workers  (IBEW), Local 1547,  and that                                                               
he fully  supports a  PLA agreement  through hiring  hall systems                                                               
and local hire.                                                                                                                 
                                                                                                                                
6:13:58 PM                                                                                                                    
                                                                                                                                
DIANA  SMITH said  she  is  a member  of  Alaska State  Employees                                                               
Association (ASEA)  and is in  support of union hire  and Alaskan                                                               
hire.                                                                                                                           
                                                                                                                                
6:14:20 PM                                                                                                                    
                                                                                                                                
SUZANNA  BOBINSKI  said that  she  is  a  member  of ASEA  and  a                                                               
resident of  Fairbanks.  She  said she is  in favor of  local and                                                               
Alaskan hire.                                                                                                                   
                                                                                                                                
6:14:43 PM                                                                                                                    
                                                                                                                                
JAMIE BASSETT  said that she is  a member of ASEA,  Local 52, and                                                               
that she was born and raised in  Alaska.  She said that she fully                                                               
supports  the  project  labor agreement  and  that  Alaskans  are                                                               
qualified for, and deserve, these jobs.                                                                                         
                                                                                                                                
6:15:40 PM                                                                                                                    
                                                                                                                                
WILLIAM  HUNT testified  that  he  is an  Alaska  resident of  25                                                               
years,  and  he supports  a  project  labor agreement  to  ensure                                                               
future employment for the next generation.                                                                                      
                                                                                                                                
6:15:58 PM                                                                                                                    
                                                                                                                                
MICHAEL COELHO  said that he is  testifying to support a  PLA and                                                               
local hire so that he may retire, in Alaska, someday.                                                                           
                                                                                                                                
6:16:16 PM                                                                                                                    
                                                                                                                                
KATIE MACKINNON  testified that  she is  a member  of ASEA.   She                                                               
said that,  in her  experience as  an eligibility  technician for                                                               
the Division of  Public Assistance, she knows  that people living                                                               
in  Alaska are  looking for  jobs, and  Alaska needs  to use  its                                                               
resources.                                                                                                                      
                                                                                                                                
6:16:51 PM                                                                                                                    
                                                                                                                                
BILL JOHNSON,  Member, Laborers;  Member, American  Federation of                                                               
State, County  and Municipal Employees,  said that he is  a life-                                                               
long resident of  Alaska, and that he works for  ASEA.  He voiced                                                               
his support for a project  labor agreement that will maximize the                                                               
benefits of resource development to  the state, and keep wages in                                                               
the local economy.                                                                                                              
                                                                                                                                
VINCE BELTRAMI, President, Alaska AFL-CIO, stated that he                                                                       
believes the gas pipeline is the most critical issue facing the                                                                 
state.  He said:                                                                                                                
                                                                                                                                
     AFL  represents about  60,000 members  in the  state of                                                                    
     Alaska,  15,000,  or  so, of  which  are  the  building                                                                    
     trades members.  ...  In  the governor's bill  a couple                                                                    
     of  the main  tenets  she outlined  in her  transmittal                                                                    
     letter to Senator Green, of  the six primary goals, and                                                                    
     the sixth was to ensure  Alaskans are trained and ready                                                                    
     for the jobs and that  those jobs are made available to                                                                    
     Alaskans.  And in the  bill under section 43.90.140 ...                                                                    
     addresses  the hiring  qualified residents....  To most                                                                    
     easily   comply   with   that   requirement   and   for                                                                    
     predictability    in    planning   the    construction,                                                                    
     scheduling  labor needs,  safety programs,  and a  plan                                                                    
     ...  to begin  training Alaskans  for a  project a  few                                                                    
     years down  the road,  it's imperative for  the project                                                                    
     to be constructed under the terms  of a PLA.  This will                                                                    
     take  the   guesswork  out  of  the   requirements  the                                                                    
     governor seeks, in regards to  local hire and workforce                                                                    
     readiness, it will add  predictability and stability to                                                                    
     the   project.  ...   In  cases   of  extremely   large                                                                    
     construction projects ... PLAs  have some validity. ...                                                                    
     Eighty-five   percent  of   [the   heavy  and   highway                                                                    
     construction workers]  are represented by unions.   And                                                                    
     of the  federally registered apprentices in  Alaska, 85                                                                    
     percent  are  enrolled   in  our  union  apprenticeship                                                                    
     programs.    And,  through  the terms  of  a  PLA,  all                                                                    
     qualified  residents would  have access  to working  on                                                                    
     this  job  under a  PLA,  irrespective  of their  union                                                                    
     affiliation  or  not.     And  we've  also  established                                                                    
     connections  into rural  Alaska ...  through the  union                                                                    
     apprenticeship program and the  efforts of Alaska Works                                                                    
     [Initiative],  ...  [to]  motivate  Alaska  Natives  to                                                                    
     enter our  programs. ... The U.S.  Congress stated, ...                                                                    
     when [it]  passed the Alaska  Natural Gas  Pipeline Act                                                                    
     [of 2002](ANGPA) ... that  [the pipeline] would provide                                                                    
     significant economic benefits,  and to maxify, maximize                                                                    
     those  benefits,  excuse  me,   that  a  project  labor                                                                    
     agreement should  be used. ...  Also, in ANGPA,  in the                                                                    
     statute,  there is  already a  PLA provision  in there.                                                                    
     ...  In  summary,  I'd   [respectfully]  ask  that  you                                                                    
     consider amending the act to  include the provisions of                                                                    
     a  project  labor   agreement  between  the  successful                                                                    
     applicants,  and the  Alaska Building  and Construction                                                                    
     Trades  Council,   for  the  maximum  benefit   of  all                                                                    
     Alaskans.                                                                                                                  
                                                                                                                                
6:22:16 PM                                                                                                                    
                                                                                                                                
DANIEL  O'LEARY stated  that  the  number one  issue  is to  have                                                               
Alaskan hire  and a PLA  on the gas  pipeline.  He  said Alaskans                                                               
are  demanding  a PLA,  and  want  to  see the  pipeline  project                                                               
proceed.                                                                                                                        
                                                                                                                                
6:23:00 PM                                                                                                                    
                                                                                                                                
DUFFY HALLADAY said that he lived  for the last 16 years in Nome.                                                               
He  previously worked  on TAPS  and noted  that many  of his  co-                                                               
workers  lived out-of-state.   Mr.  Halladay said  that he  hoped                                                               
Alaskans would  benefit from the gas  pipeline construction jobs.                                                               
He also said that he felt  Alaska hire can be negotiated into the                                                               
construction contract.                                                                                                          
                                                                                                                                
6:27:07 PM                                                                                                                    
                                                                                                                                
GERALD KW  BROWN said that  he felt  AGIA is very  important, but                                                               
that the  lack of an  Alaska hire  provision is a  glaring error.                                                               
Presently, oil field  workers live outside and  do not contribute                                                               
to the growth of the state.   He urged the legislature to include                                                               
monitoring criteria  for the project  to ensure that  Alaska hire                                                               
is maintained throughout the life of the pipeline.                                                                              
                                                                                                                                
6:28:55 PM                                                                                                                    
                                                                                                                                
W.T. REEVES informed the committees  that he has been trying, for                                                               
30 years, to  open the last eight miles of  the [Dalton Highway].                                                               
He has been  told that the road can not  be completely opened due                                                               
to the pressure  on the wells, and asked if  that information was                                                               
correct.    He  also  questioned the  wisdom  of  constructing  a                                                               
smaller diameter gas pipeline.                                                                                                  
                                                                                                                                
6:30:19 PM                                                                                                                    
                                                                                                                                
MERRICK PEIRCE  asked the legislature to  follow Governor Palin's                                                               
lead on AGIA.   One of the cornerstones of  the governor's effort                                                               
to build  the gas  pipeline for  Alaska is  to level  the playing                                                               
field for all the parties competing in this process.  Mr. Peirce                                                                
remarked:                                                                                                                       
                                                                                                                                
     What we will see, I  predict, after the governor's AGIA                                                                    
     is passed by  the legislature, is that when  all of the                                                                    
     proposals are  evaluated, you  will see  something that                                                                    
     is  readily apparent  to many  Alaskans. ...  The major                                                                    
     oil  producers  not only  do  not  want  to see  a  gas                                                                    
     pipeline built,  they don't want anybody  else to build                                                                    
     one  either.   To amortize  the cost  of a  $38 billion                                                                    
     [Alaska] Highway  project, the producers would  have to                                                                    
     flood  the Lower  48  market with  natural  gas.   That                                                                    
     would  then shift  the  supply  and demand  equilibrium                                                                    
     heavily  in   favor  of  the   consumers.  ...   It  is                                                                    
     illustrative to  see how  profitable the  limitation of                                                                    
     oil  supplies has  been for  the producers  due to  the                                                                    
     disruption in  oil supplies from  Iraq. ...  Of course,                                                                    
     the consequence  is record high  oil prices  and record                                                                    
     profits  for  [ExxonMobil  Corporation] and  the  other                                                                    
     major  producers  as  well   as  the  [Organization  of                                                                    
     Petroleum Exporting Countries]  members, because supply                                                                    
     is limited.  ... It was also  illustrative, and frankly                                                                    
     embarrassing, to watch Frank  Murkowski and some of the                                                                    
     oil   industry   [indisc.]    supporters   within   the                                                                    
     legislature attempt and fail  to craft an ... agreement                                                                    
     with the  producers, a deal  the producers  walked away                                                                    
     from,  in  spite of  the  fact  that Murkowski  offered                                                                    
     generous and  unconstitutional giveaways. ... A  lot of                                                                    
     us  will  be watching  carefully  as  the oil  industry                                                                    
     lobbyists  ... try  to get  you  to craft  exclusionary                                                                    
     language to  keep the  various voter  approved entities                                                                    
     like  ANGA and  [Alaska  Gasline  Port Authority]  from                                                                    
     being able to compete  under AGIA. ... This legislature                                                                    
     should  try   to  get  a  handle   on  [Federal  Energy                                                                    
     Regulatory  Commission] jurisdiction  now. ...  So that                                                                    
     the ... gas pipeline project  isn't delayed later on by                                                                    
     FERC jurisdictional issues.                                                                                                
                                                                                                                                
[HB 177 and SB 104 were held over.]                                                                                             
                                                                                                                                
6:33:47 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The Senate Resources Standing Committee was recessed at 6:35                                                                    
p.m., to be continued at 4:00 p.m. on March 22, 2007.  [The                                                                     
House Special Committee on Oil and Gas was adjourned at 6:35                                                                    
p.m.]                                                                                                                           
                                                                                                                                

Document Name Date/Time Subjects