Legislature(1997 - 1998)

04/02/1998 02:30 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
         HOUSE RESOURCES STANDING COMMITTEE                                    
                   April 2, 1998                                               
                     2:30 p.m.                                                 
                                                                               
                                                                               
MEMBERS PRESENT                                                                
                                                                               
Representative Bill Hudson, Co-Chairman                                        
Representative Scott Ogan, Co-Chairman                                         
Representative Beverly Masek, Vice Chair                                       
Representative Ramona Barnes                                                   
Representative Fred Dyson                                                      
Representative Joe Green                                                       
Representative William K. (Bill) Williams                                      
Representative Irene Nicholia                                                  
Representative Reggie Joule                                                    
                                                                               
MEMBERS ABSENT                                                                 
                                                                               
All members present.                                                           
                                                                               
COMMITTEE CALENDAR                                                             
                                                                               
HOUSE BILL NO. 393                                                             
"An Act relating to contracts with the state establishing payments             
in lieu of other taxes by a qualified sponsor or qualified sponsor             
group for projects to develop stranded gas resources in the state;             
providing for the inclusion in such contracts of terms making                  
certain adjustments regarding royalty value and the timing and                 
notice of the state's right to take royalty in kind or in value                
from such projects; relating to the effect of such contracts on                
municipal taxation; and providing for an effective date."                      
                                                                               
    - MOVED CSHB 393(RES) OUT OF COMMITTEE                                     
                                                                               
(* First public hearing)                                                       
                                                                               
PREVIOUS ACTION                                                                
                                                                               
BILL: HB 393                                                                   
SHORT TITLE: DEVELOP STRANDED GAS RESOURCES                                    
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                   
                                                                               
Jrn-Date    Jrn-Page           Action                                          
 2/11/98      2280     (H)  READ THE FIRST TIME - REFERRAL(S)                  
 2/11/98      2281     (H)  OIL & GAS, FINANCE                                 
 2/11/98      2281     (H)  2 FISCAL NOTES (DNR, REV)                          
 2/11/98      2281     (H)  GOVERNOR'S TRANSMITTAL LETTER                      
 2/19/98               (H)  O&G AT 11:00 AM CAPITOL 124                        
 2/19/98               (H)  MINUTE(O&G)                                        
 2/24/98               (H)  O&G AT 10:00 AM CAPITOL 124                        
 2/24/98               (H)  MINUTE(O&G)                                        
 2/26/98               (H)  O&G AT 10:00 AM CAPITOL 124                        
 2/26/98               (H)  MINUTE(O&G)                                        
 3/03/98               (H)  O&G AT 10:00 AM CAPITOL 124                        
 3/03/98               (H)  MINUTE(O&G)                                        
 3/05/98               (H)  MINUTE(O&G)                                        
 3/09/98      2578     (H)  RES REFERRAL ADDED                                 
 3/10/98               (H)  O&G AT 10:00 AM CAPITOL 124                        
 3/10/98               (H)  MINUTE(O&G)                                        
 3/12/98               (H)  O&G AT 10:00 AM CAPITOL 124                        
 3/12/98               (H)  MINUTE(O&G)                                        
 3/19/98               (H)  O&G AT 10:00 AM CAPITOL 124                        
 3/19/98               (H)  MINUTE(O&G)                                        
 3/24/98               (H)  O&G AT 10:00 AM CAPITOL 124                        
 3/24/98               (H)  MINUTE(O&G)                                        
 3/24/98               (H)  O&G AT  5:00 PM CAPITOL 124                        
 3/24/98               (H)  MINUTE(O&G)                                        
 3/26/98               (H)  O&G AT 10:00 AM CAPITOL 124                        
 3/26/98               (H)  MINUTE(O&G)                                        
 3/26/98               (H)  O&G RPT PROPOSED COMMITTEE SUBSTITUTE              
                            O&G NT & ATTACHED AM 1DP 5NR DP:                   
                            HODGINS; NR: BUNDE, OGAN, ROKEBERG,                
                            BRICE, KEMPLEN                                     
 3/26/98      2750     (H)  2 FISCAL NOTES (DNR, REV) 2/11/98                  
 3/26/98               (H)  RES AT  1:00 PM CAPITOL 124                        
 3/26/98               (H)  MINUTE(RES)                                        
 3/28/98               (H)  RES AT  1:00 PM CAPITOL 124                        
 3/28/98               (H)  MINUTE(RES)                                        
 3/31/98               (H)  RES AT  1:00 PM CAPITOL 124                        
 3/28/98               (H)  MINUTE(RES)                                        
 3/31/98               (H)  RES AT  1:00 PM CAPITOL 124                        
 3/31/98               (H)  MINUTE(RES)                                        
 4/02/98               (H)  RES AT  1:00 PM CAPITOL 124                        
                                                                               
WITNESS REGISTER                                                               
                                                                               
WILSON CONDON, Commissioner                                                    
Department of Revenue                                                          
P.O. Box 110400                                                                
Juneau, Alaska 99811-0400                                                      
Telephone:  (907) 465-2300                                                     
POSITION STATEMENT: Answered questions of the committee members on             
                    HB 393.                                                    
                                                                               
JOHN SHIVELY, Commissioner                                                     
Department of Natural Resources                                                
400 Willoughby Avenue                                                          
Juneau, Alaska 99801-1724                                                      
Telephone:  (907) 465-2400                                                     
POSITION STATEMENT: Answered questions of the committee members on             
                    HB 393.                                                    
                                                                               
ACTION NARRATIVE                                                               
                                                                               
TAPE 98-41, SIDE A                                                             
Number 001                                                                     
                                                                               
CO-CHAIRMAN SCOTT OGAN called the House Resources Standing                     
Committee meeting to order at 2:30 p.m.  Members present at the                
call to order were Representatives Hudson, Ogan, Masek, Green, and             
Williams.  Representatives Barnes, Dyson, Nicholia and Joule                   
arrived at 2:31 p.m., 2:36 p.m., 3:10 p.m., and 3:15 p.m.,                     
respectively.                                                                  
HB 393 - DEVELOP STRANDED GAS RESOURCES                                        
                                                                               
CO-CHAIRMAN OGAN announced the only order of business today was                
House Bill Number 393, "An Act relating to contracts with the state            
establishing payments in lieu of other taxes by a qualified sponsor            
or qualified sponsor group for projects to develop stranded gas                
resources in the state; providing for the inclusion in such                    
contracts of terms making certain adjustments regarding royalty                
value and the timing and notice of the state's right to take                   
royalty in kind or in value from such projects; relating to the                
effect of such contracts on municipal taxation; and providing for              
an effective date."                                                            
                                                                               
CO-CHAIRMAN OGAN entertained a motion to adopt the proposed                    
committee substitute for HB 393, version 0-GH2006\Q, Glover,                   
4/1/98.                                                                        
                                                                               
Number 056                                                                     
                                                                               
CO-CHAIRMAN BILL HUDSON made a motion and asked unanimous consent              
to adopt the proposed committee substitute for HB 393, version 0-              
GH2006\Q, Glover, 4/1/98, for consideration.  There being no                   
objection, it was so adopted.                                                  
                                                                               
CO-CHAIRMAN OGAN announced that Roger Marks, a petroleum economist             
from the Department of Revenue; and Bill Van Dyke, Division of Oil             
and Gas, Department of Natural Resources, are online in Anchorage.             
to answer any technical questions in regards to gas-to-liquids                 
(GTL).                                                                         
                                                                               
CO-CHAIRMAN OGAN announced the arrival of Representative Barnes.               
                                                                               
CO-CHAIRMAN OGAN called on Commissioner Condon from the Department             
of Revenue and Commissioner Shively from the Department of Natural             
Resources.                                                                     
                                                                               
Number 116                                                                     
                                                                               
WILSON CONDON, Commissioner, Department of Revenue, testified in               
Juneau.  He is prepared to talk about the chemistry of GTL.                    
                                                                               
CO-CHAIRMAN OGAN stated it seems that incorporating GTL in the bill            
is an apple-orange comparison.  It would no doubt take a                       
considerable capital investment to create a facility to convert                
natural gas to liquid.  He asked Commissioner Condon to brief him              
on the logic of including GTL language in the bill, especially in              
light of the effective date.                                                   
                                                                               
Number 159                                                                     
                                                                               
COMMISSIONER CONDON replied the sunset date in the bill means that             
the chances of someone bringing a GTL proposal are remote, given               
where technology stands today.  Nevertheless, we believe that                  
taking the gas to market as liquid natural gas (LNG) is the best               
alternative today for monetizing the tremendous resource on the                
North Slope.  But, GTL technology is being developed.  The bill is             
a framework for the executive branch to develop proposals to bring             
to the legislature in order to develop stranded gas either as an               
LNG, GTL, methanol, or a gas pipeline project.                                 
                                                                               
Number 213                                                                     
                                                                               
REPRESENTATIVE RAMONA BARNES asked Commissioner Condon whose idea              
was it to put GTL in the bill.                                                 
                                                                               
COMMISSIONER CONDON replied he really doesn't remember.                        
                                                                               
REPRESENTATIVE BARNES asked Commissioner Condon whether he knows               
how long the technology for GTL has been around.                               
                                                                               
COMMISSIONER CONDON replied it has been around in one form or                  
another since the 1920s.                                                       
                                                                               
REPRESENTATIVE BARNES asked Commissioner Condon whether Hitler                 
developed it during World War II.                                              
                                                                               
COMMISSIONER CONDON replied it was developed well before he gained             
political power, but Hitler used it to manufacture fuel for his war            
machines.                                                                      
                                                                               
REPRESENTATIVE BARNES asked Commissioner Condon why hasn't it been             
developed commercially to this point in time.                                  
                                                                               
COMMISSIONER CONDON replied it has been commercially developed for             
some limited uses.  It has not been commercially developed on a                
scale that would be useful for Alaska.  It has been developed in a             
way that it is economical for making wax.  It was also developed in            
South Africa when it was subject to an oil embargo.                            
                                                                               
REPRESENTATIVE BARNES asked Commissioner Condon, with a project the            
size of the stranded gas reserves at Prudhoe Bay and Point Thomson,            
how long would it take for technology to develop in order to take              
it to the marketplace.                                                         
                                                                               
COMMISSIONER CONDON replied at least a decade, but that is his own             
personal guess.                                                                
                                                                               
REPRESENTATIVE BARNES asked Commissioner Condon whether he was the             
person who hired Dr. Pedro van Meurs.                                          
                                                                               
COMMISSIONER CONDON replied he is the person responsible for having            
him hired.                                                                     
                                                                               
REPRESENTATIVE BARNES asked Commissioner Condon whether Pedro van              
Meurs indicated the window of opportunity for Alaska is around the             
year 2005, otherwise other projects would "nibble ours to death."              
She read the following from Dr. van Meurs' report:                             
                                                                               
     "The main drawback of delays in the Alaska project is                     
     that the project may be nibbled to death by small                         
     projects coming in ahead of the Alaska project.                           
     Petroleum exploration in Asia used to be primarily for                    
     oil; gas was considered a byproduct.  However, the                        
     strongly emerging gas markets in Asia have now created a                  
     situation where petroleum companies are now exploring for                 
     gas."                                                                     
                                                                               
COMMISSIONER CONDON stated he does remember him talking about that.            
                                                                               
REPRESENTATIVE BARNES asked Commissioner Condon whether anything               
has changed that would cause Alaska to think it would be viable in             
the marketplace as late as the year 2010 and before the year 2015.             
                                                                               
COMMISSIONER CONDON replied the sooner Alaska's project gets in the            
cue the better the chances of successfully marketing its gas.  Dr.             
van Meurs didn't indicate that the window would close, but it needs            
to be in-line as quickly as possible.                                          
                                                                               
REPRESENTATIVE BARNES stated van Meurs didn't indicate that the                
window would close.  He laid out a scenario of how the economy of              
Asia would grow and the window would broaden.  Since that time, the            
economy of Asia has contracted considerably and it is not likely to            
grow anywhere near the rate he laid out.  She asked Commissioner               
Condon whether he believes that the window of opportunity will                 
continue to grow as fast as the scenario that was laid out in van              
Meurs' report.                                                                 
                                                                               
COMMISSIONER CONDON replied he does not.  He thinks there will be              
a period of two to three years where growth will be close to zero              
then it will continue at its previous rate.                                    
                                                                               
REPRESENTATIVE BARNES stated it is her belief that with the GTL                
language in the bill it will be used as an excuse to slow down the             
development of building a gas pipeline to get the gas to the                   
marketplace.  She asked Commissioner Condon whether he would take              
exception to that language coming out of the bill.                             
                                                                               
COMMISSIONER CONDON replied he understands her concerns, but he                
doesn't share the same belief.  There are some good reasons for                
leaving all possibilities open.  It is a question of evaluating                
motives.                                                                       
                                                                               
REPRESENTATIVE BARNES asked Commissioner Condon what would preclude            
the administration from coming back to the legislature when the                
technology is developed.                                                       
                                                                               
COMMISSIONER CONDON replied, "Not a thing."                                    
                                                                               
REPRESENTATIVE BARNES asked Co-Chairman Ogan whether there is                  
anybody to discuss the makeup of GTL, the loss of the product to               
the atmosphere, and the fact that there is no taxing structure in              
place for diesel fuel.                                                         
                                                                               
CO-CHAIRMAN OGAN replied there are people here to testify on those             
concerns.                                                                      
                                                                               
Number 385                                                                     
                                                                               
REPRESENTATIVE JOE GREEN asked Commissioner Condon whether it would            
make sense to keep all of the avenues open even though there might             
be a loss of a product.                                                        
                                                                               
COMMISSIONER CONDON replied, "Yes."  Both LNG and GTL options would            
use the resource and take it to the market.  A little less than 10             
percent of the gas would be used to run the pipeline, power the                
refrigeration plant, and run the ships for an LNG project.  The                
state would tax and get a royalty on all of the gas supplied at the            
front end of the project.  About 65 to 70 percent of the energy                
would get to the market for a GTL project.  The other 35 percent               
would be used to run the chemical plant.  Nevertheless, the state              
would get a royalty on it or tax the entire volume delivered to the            
GTL plant.  In both instances the economics would be the cost of               
getting it there and to make it.  It would be a net-back procedure.            
It would be cheaper by a considerable amount to move liquid rather             
than gas to the marketplace.  Once it is at the market the values              
would be roughly the same.  Diesel would go for a little bit more              
than delivered gas, but it would be roughly the same.  The cost to             
get the diesel there would be a lot less, but it would cost a lot              
of money to make it.                                                           
                                                                               
REPRESENTATIVE GREEN said, "As we move through our utilization from            
stationary sources to maybe mobile sources of using the energy                 
right now we're unfortunate in realizing a glut of conventional                
oil, but in the future is it conceivable that, as I understand this            
product, whatever form it is it's essentially pure in that you                 
don't have impurities like sulfur really common in other forms of              
diesel and lower-ends than the normal gas line - CH4 gas.  That                
there could be with flexibility of going either way a market                   
response that would not necessarily be there if you maintained your            
eggs in one basket so to speak.  So that--for example, if gas                  
becomes a like oil is right now that if--at that same time maybe               
diesel fuel or whatever this product is GTL.  I wish we had a                  
sample of that so we could see what it looked like.  But, if that              
might be a more marketable product, that you would have the                    
flexibility and that both the operators and the state could stand              
to benefit with that flexibility."                                             
                                                                               
COMMISSIONER CONDON stated Representative Green is correct in that             
an LNG plan would be built around long-term contracts so that there            
wouldn't be a lot of flexibility.  In a GTL plan there wouldn't be             
long-term contracts.  It would be marketed differently, even if it             
was blended with crude oil.                                                    
                                                                               
Number 491                                                                     
                                                                               
CO-CHAIRMAN OGAN said, "We take--the way it's gonna--if detail                 
happens, we have a refinery up there on the North Slope.  It                   
refines this product.  It's a relatively pure product.  We mix it              
in with the oil, get it all dirty again and mixed up with all the              
oil.  I guess, the only advantage might be that we keep more                   
liquids going through the pipeline in the long-term because there's            
probably capacity there cause were not running at full capacity                
anyway.  But, then it has to be--the whole soup has to be refined              
on the other end anyway.  Correct?"                                            
                                                                               
COMMISSIONER CONDON replied if it is blended together that is                  
correct.                                                                       
                                                                               
CO-CHAIRMAN OGAN said, "If you send it down the pipeline un-blended            
you'd have to put in a pig, you'd have to have storage facilities              
built on--for the oil, you'd have to have storage facilities built             
for the GTL, put in a pig and ship it down that way."                          
                                                                               
COMMISSIONER CONDON replied that is correct.  Storage facilities               
would have to be at both ends in order not to shut in the oil field            
while shipping the GTLs.                                                       
                                                                               
CO-CHAIRMAN OGAN stated oil fields don't shut in very easily.                  
                                                                               
COMMISSIONER CONDON stated they aren't hard to shut in, but "your              
not happy about it when you cash the checks at the end of the                  
month."                                                                        
                                                                               
Number 510                                                                     
                                                                               
JOHN SHIVELY, Commissioner, Department of Natural Resources, stated            
the pipeline has run at about 2.2 million barrels a day.  It is                
running at 1.3 million barrels a day now.  There was storage                   
capacity at Valdez for 2.2 million barrels when it was running at              
that capacity, but they probably will have to be a redesigned.  "My            
opinion is that if they do this most likely they will ship it in               
slugs.  I mean that--it doesn't make a lot of sense to make a                  
basically pure product then mix it back in with crude, but the                 
technology to shipping slugs is not new.  I mean it's done in other            
places."                                                                       
                                                                               
Number 518                                                                     
                                                                               
REPRESENTATIVE GREEN said, "Would it be your--in your discussions              
or maybe we should talk to one of the operators.  would it be                  
significant enough through put if GTLs seem to be reasonable that              
you could keep the slugging that you could go beyond whatever the              
(indisc.--sneezing) number is and we've heard anything from two to             
three (indisc.--coughing) barrels a day before the existing                    
pipeline just is not efficient enough to keep running, that by                 
batching you could run that down to a significantly lower oil                  
throughput thereby keeping the fields that are producing there                 
longer."  Would batching allow us to extend the lives of the                   
fields? he asked.                                                              
                                                                               
COMMISSIONER SHIVELY replied, "Basically it's our feeling that in              
order to have a project that would be economic, if the technology              
changes, you'd process about two billion cubic feet a day which                
would translate into about 200,000 barrels under current technology            
and people don't know when the pipeline might shut down, the                   
300,000-barrels-a-day figure has--what has been used.  So, yeah, it            
could make a difference and as you know right now we're producing              
up there about six to seven million cubic feet a day.  It's about              
two billion a day also for the LNG so, I mean, there is even under             
existing resources plenty of resource to do both.  And that doesn't            
take into account the fact that I think most people believe that if            
there were an outlet for the gas there's a lot of opportunity to               
look for additional gas on the North Slope."                                   
                                                                               
Number 547                                                                     
                                                                               
REPRESENTATIVE BILL WILLIAMS asked Commissioner Condon whether the             
bill is to create options to find out how to get the gas to the                
marketplace economically.                                                      
                                                                               
COMMISSIONER CONDON replied, "Correct."                                        
                                                                               
REPRESENTATIVE WILLIAMS asked Commissioner Condon whether somebody             
in the administration follows the marketplace.                                 
                                                                               
COMMISSIONER CONDON replied, "We certainly do."                                
                                                                               
REPRESENTATIVE WILLIAMS asked Commissioner Condon whether the                  
people who follow the marketplace always agree.                                
                                                                               
COMMISSIONER CONDON replied, "No."                                             
                                                                               
REPRESENTATIVE WILLIAMS asked Commissioner Condon whether the state            
would want to force itself into the marketplace if it wasn't                   
economical.                                                                    
                                                                               
COMMISSIONER CONDON replied, "I don't think we would want to.                  
That's not to say we couldn't do it, but I think we'd have to spend            
our own money.  And I would hope that we wouldn't do that."                    
                                                                               
REPRESENTATIVE WILLIAMS asked Commissioner Condon whether the state            
would want to close any options off, such as GTL or anything else,             
in order to maximize the economics.                                            
                                                                               
COMMISSIONER CONDON replied the purpose of the legislation is to               
require the administration to come before the legislature with a               
proposal to make stranded gas economical.                                      
                                                                               
REPRESENTATIVE WILLIAMS asked Commissioner Condon how far out in               
the future would the state know that the marketplace is ready for              
GTL.                                                                           
                                                                               
COMMISSIONER CONDON replied when there are deals in place to build             
a project.                                                                     
                                                                               
REPRESENTATIVE WILLIAMS asked Commissioner Condon to give a good               
reason why the bill should have a sunset date.                                 
                                                                               
COMMISSIONER CONDON replied the argument for a sunset date is to               
create an incentive for people to make up their minds in regards to            
the opportunities that may face the state right now.                           
                                                                               
REPRESENTATIVE WILLIAMS asked Commissioner Condon whether part of              
an incentive today would be tax breaks.                                        
                                                                               
COMMISSIONER CONDON replied there aren't any tax breaks now.  The              
bill calls for proposals and fiscal systems to be authorized by the            
legislature.  The argument for a cutoff date is to get people to               
step forward and take advantage of the opportunity or to not take              
advantage of the opportunity.  If an opportunity is open ended                 
people may wait.                                                               
                                                                               
REPRESENTATIVE WILLIAMS asked Commissioner Condon whether the                  
market dictates whether an opportunity is open ended.                          
                                                                               
COMMISSIONER CONDON replied it is a judgement call.                            
                                                                               
REPRESENTATIVE WILLIAMS stated he realizes that the state wants to             
get the gas to the market, show the industry that it is willing to             
work with them, and make arrangements to be partners.  He is                   
concerned about the sunset clause in the bill forcing private                  
industry into the marketplace, however.                                        
                                                                               
Number 653                                                                     
                                                                               
REPRESENTATIVE BARNES stated, if GTL is left in the bill, the state            
will wait for a long-time for the major oil companies to step                  
forward to get the gas to the market.  She asked Commissioner                  
Condon whether GTL would be economical, if all the state revenues              
were given up - taxes, royalties, and etc.                                     
                                                                               
COMMISSIONER CONDON replied, "I do not believe that."                          
                                                                               
REPRESENTATIVE BARNES asked Commissioner Condon why the language               
should be included in the bill.                                                
                                                                               
COMMISSIONER CONDON replied because, "I know that I don't know                 
everything."                                                                   
                                                                               
REPRESENTATIVE BARNES said, "I'd like to say to you Commissioner               
that none of us know everything.  But a lot of times after dealing             
with people over a long period of time, you get a real gut feeling             
about what's going on, especially after you hear them tell stories             
in two different perspectives depending on which side of the                   
comments that you're on, and then you begin to have this feeling               
that all is not right in the world.  You understand what I mean?"              
                                                                               
COMMISSIONER CONDON replied, "I certainly do."                                 
                                                                               
REPRESENTATIVE BARNES asked Commissioner Condon whether he would               
have any real heartburn if GTL came out of the bill.                           
                                                                               
COMMISSIONER CONDON replied if GTL came out of the bill it would               
not give him heartburn.  The wise decision would be to leave it in,            
however.                                                                       
                                                                               
REPRESENTATIVE BARNES asked Commissioner Shively whether he would              
have any real heartburn if GTL came out of the bill.                           
                                                                               
COMMISSIONER SHIVELY replied, "No."  He said, "One of the reasons              
that it is in here--even if it is not economic today that there is             
a lot going on looking at technology which could change that.  And,            
you know it is a chance to market."                                            
                                                                               
REPRESENTATIVE BARNES asked whether the administration could always            
come back to the legislature for a new bill if GTL became viable.              
                                                                               
COMMISSIONER SHIVELY replied, "Correct."                                       
                                                                               
CO-CHAIRMAN OGAN announced the arrival of Representative Nicholia.             
                                                                               
CO-CHAIRMAN HUDSON stated he has heard enough to believe that when             
GTL is feasible and economical that the legislature would jump to              
the opportunity.  But, because of the unknown now, he would favor              
removing it from the bill.                                                     
                                                                               
TAPE 98-41, SIDE B                                                             
Number 002                                                                     
                                                                               
CO-CHAIRMAN HUDSON made a motion and asked unanimous consent to                
insert a period after the word "tankers" on page 2, line 20; and               
delete all the language after "tankers" on page 2, lines 20-25.                
                                                                               
REPRESENTATIVE BARNES suggested taking out any reference to GTL in             
the bill.                                                                      
                                                                               
COMMISSIONER SHIVELY pointed out that a semicolon would go after               
the word "tankers" not a period.                                               
                                                                               
CO-CHAIRMAN HUDSON agreed with Commissioner Shively.                           
                                                                               
REPRESENTATIVE WILLIAMS objected.  The bill is enabling                        
legislation.  All options need to be looked at.                                
                                                                               
CO-CHAIRMAN OGAN stated that by amending language referring to GTL             
out of the bill, he hopes that the industry doesn't see it as a                
signal to looking into GTL.  Certainly, LNG is a priority in the               
short-term.  If the sunset date remains in the bill, it is a moot              
point anyway.                                                                  
                                                                               
CO-CHAIRMAN OGAN announced the arrival of Representative Joule.                
                                                                               
CO-CHAIRMAN OGAN explained the motion is to insert a semicolon                 
after the word "tankers" on page 2, line 20; and delete all the                
language after "tankers" on page 2, lines 20-25.                               
                                                                               
CO-CHAIRMAN OGAN called for a roll call vote.  Representatives                 
Barnes, Joule, Nicholia, and Williams voted against the motion.                
Representatives Barnes, Masek and Hudson voted in favor of the                 
motion.  Representative Ogan did not vote and called for a brief at            
ease.  Representatives Dyson and Green were not present to vote.               
                                                                               
CO-CHAIRMAN OGAN called the meeting back to order.                             
                                                                               
CO-CHAIRMAN OGAN called for a second roll call vote.                           
Representatives Barnes, Dyson, Masek, Hudson and Ogan voted in                 
favor of the motion.  Representatives Green, Joule, Nicholia and               
Williams voted against the motion.  The motion carried.                        
                                                                               
Number 175                                                                     
                                                                               
REPRESENTATIVE BARNES stated Commissioners Condon and Shively have             
answered her questions regarding the loss of GTL as it is converted            
and the taxing regimes to her satisfaction.                                    
                                                                               
Number 190                                                                     
                                                                               
REPRESENTATIVE BARNES made a motion and asked unanimous consent to             
move the proposed committee substitute for HB 393, version 0-                  
GH2006\Q, Glover, 4/1/98, as amended, from the committee with                  
individual recommendations and the attached fiscal note(s).  There             
being no objection, CSHB 393(RES) moved from the House Resources               
Standing Committee.                                                            
ADJOURNMENT                                                                    
                                                                               
Number 196                                                                     
                                                                               
CO-CHAIRMAN OGAN adjourned the House Resources Standing Committee              
meeting at 3:27 p.m.                                                           

Document Name Date/Time Subjects