Legislature(2009 - 2010)BELTZ 211

02/27/2009 11:00 AM ENERGY


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 31 GEOTHERMAL ELEC. PROD. TAX CREDIT TELECONFERENCED
Moved CSSB 31(ENE) Out of Committee
+ HCR 2 IN-STATE GAS PIPELINE TELECONFERENCED
Moved CSHCR 2(RES) am Out of Committee
+ HCR 3 IN-STATE GAS PIPELINE TELECONFERENCED
Moved HCR 3 am Out of Committee
+ HCR 4 IN-STATE GAS PIPELINE TELECONFERENCED
Moved HCR 4 am Out of Committee
+ HCR 5 IN-STATE GAS PIPELINE TELECONFERENCED
Moved HCR 5 am Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
               SENATE SPECIAL COMMITTEE ON ENERGY                                                                             
                       February 27, 2009                                                                                        
                           11:11 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lesil McGuire, Chair                                                                                                    
Senator Bert Stedman                                                                                                            
Senator Bill Wielechowski                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Lyman Hoffman                                                                                                           
Senator Albert Kookesh                                                                                                          
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 31                                                                                                              
"An  Act  relating to  a  geothermal  electricity production  tax                                                               
credit under the Alaska Net Income Tax Act."                                                                                    
     MOVED CSSB 31(ENE) OUT OF COMMITTEE                                                                                        
                                                                                                                                
CS FOR HOUSE CONCURRENT RESOLUTION NO. 2(RES) am                                                                                
Requesting  the  governor  to provide  energy  security  for  all                                                               
Alaskans first  by pursuing development  of a natural  gas bullet                                                               
pipeline  from the  North Slope  to  the Cook  Inlet region;  and                                                               
requesting  the   governor  to   identify  and   negotiate  where                                                               
appropriate  with  one  or  more  persons  capable  of  producing                                                               
natural gas  from the Gubik  area, and  other areas on  the North                                                               
Slope  if  necessary, in  sufficient  quantities  to support  the                                                               
energy needs of Alaskans and a bullet pipeline project.                                                                         
     MOVED CSHCR 2(RES) am OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE CONCURRENT RESOLUTION NO. 3 am                                                                                            
Requesting  the  governor  to provide  energy  security  for  all                                                               
Alaskans by taking and encouraging  all action that would support                                                               
a natural  gas bullet pipeline from  the North Slope to  the Cook                                                               
Inlet region, including initiating  any necessary negotiations to                                                               
reopen the Agrium plant in Kenai.                                                                                               
     MOVED HCR 3 am OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE CONCURRENT RESOLUTION NO. 4 am                                                                                            
Requesting the  governor to provide energy  security for Alaskans                                                               
by  taking  and encouraging  all  appropriate  action to  support                                                               
development  of a  natural  gas bullet  pipeline  from the  North                                                               
Slope to the  Cook Inlet region including  advocating an increase                                                               
in  the  amount  of  natural  gas  that  may  be  exported  under                                                               
authority granted by the United States Department of Energy.                                                                    
     MOVED HCR 4 am OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE CONCURRENT RESOLUTION NO. 5 am                                                                                            
Requesting  the  governor  to provide  energy  security  for  all                                                               
Alaskans  by working  on significant  elements and  components to                                                               
support the timely construction of  a natural gas bullet pipeline                                                               
from  the North  Slope  to  the Cook  Inlet  region  and to  take                                                               
necessary  and appropriate  action to  assist and  facilitate the                                                               
process for a private entity  to make a final investment decision                                                               
to commit to the pipeline before November 1, 2010.                                                                              
     MOVED HCR 5 am OUT OF COMMITTEE                                                                                            
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB  31                                                                                                                  
SHORT TITLE: GEOTHERMAL ELEC. PROD. TAX CREDIT                                                                                  
SPONSOR(S): SENATOR(S) MCGUIRE                                                                                                  
                                                                                                                                
01/21/09       (S)       PREFILE RELEASED 1/9/09                                                                                

01/21/09 (S) READ THE FIRST TIME - REFERRALS

01/21/09 (S) ENE, RES, FIN 02/12/09 (S) ENE AT 11:00 AM BUTROVICH 205 02/12/09 (S) Heard & Held 02/12/09 (S) MINUTE(ENE) 02/27/09 (S) ENE AT 11:00 AM BELTZ 211 BILL: HCR 2 SHORT TITLE: IN-STATE GAS PIPELINE SPONSOR(S): REPRESENTATIVE(S) RAMRAS

01/21/09 (H) READ THE FIRST TIME - REFERRALS

01/21/09 (H) ENE, RES 02/03/09 (H) ENE AT 3:00 PM BARNES 124 02/03/09 (H) Moved Out of Committee 02/03/09 (H) MINUTE(ENE) 02/04/09 (H) ENE RPT 6DP 1NR 02/04/09 (H) DP: RAMRAS, PETERSEN, DAHLSTROM, TUCK, EDGMON, MILLETT 02/04/09 (H) NR: JOHANSEN 02/04/09 (H) RES AT 1:00 PM BARNES 124 02/04/09 (H) Moved CSHCR 2(RES) Out of Committee 02/04/09 (H) MINUTE(RES) 02/06/09 (H) NR: WILSON 02/06/09 (H) AM: TUCK, KAWASAKI 02/06/09 (H) DP: OLSON, GUTTENBERG, JOHNSON, NEUMAN 02/06/09 (H) RES RPT CS(RES) NT 4DP 1NR 2AM 02/09/09 (H) TRANSMITTED TO (S) 02/09/09 (H) VERSION: CSHCR 2(RES) AM 02/11/09 (S) ENE, RES 02/11/09 (S) READ THE FIRST TIME - REFERRALS 02/19/09 (S) FIN REFERRAL ADDED 02/27/09 (S) ENE AT 11:00 AM BELTZ 211 BILL: HCR 3 SHORT TITLE: IN-STATE GAS PIPELINE SPONSOR(S): REPRESENTATIVE(S) RAMRAS

01/21/09 (H) READ THE FIRST TIME - REFERRALS

01/21/09 (H) ENE, RES 02/03/09 (H) ENE AT 3:00 PM BARNES 124 02/03/09 (H) Moved Out of Committee 02/03/09 (H) MINUTE(ENE) 02/04/09 (H) ENE RPT 6DP 1NR 02/04/09 (H) DP: PETERSEN, DAHLSTROM, RAMRAS, TUCK, EDGMON, MILLETT 02/04/09 (H) NR: JOHANSEN 02/04/09 (H) RES AT 1:00 PM BARNES 124 02/04/09 (H) Moved Out of Committee 02/04/09 (H) MINUTE(RES) 02/06/09 (H) NR: WILSON 02/06/09 (H) AM: KAWASAKI 02/06/09 (H) DP: OLSON, TUCK, JOHNSON, NEUMAN 02/06/09 (H) RES RPT 4DP 1NR 1AM 02/09/09 (H) TRANSMITTED TO (S) 02/09/09 (H) VERSION: HCR 3 AM 02/11/09 (S) ENE, RES 02/11/09 (S) READ THE FIRST TIME - REFERRALS 02/19/09 (S) FIN REFERRAL ADDED 02/27/09 (S) ENE AT 11:00 AM BELTZ 211 BILL: HCR 4 SHORT TITLE: IN-STATE GAS PIPELINE SPONSOR(S): REPRESENTATIVE(S) RAMRAS

01/21/09 (H) READ THE FIRST TIME - REFERRALS

01/21/09 (H) ENE, RES 02/03/09 (H) ENE AT 3:00 PM BARNES 124 02/03/09 (H) Moved Out of Committee 02/03/09 (H) MINUTE(ENE) 02/04/09 (H) NR: JOHANSEN 02/04/09 (H) ENE RPT 6DP 1NR 02/04/09 (H) DP: TUCK, DAHLSTROM, PETERSEN, RAMRAS, MILLETT, EDGMON 02/04/09 (H) RES AT 1:00 PM BARNES 124 02/04/09 (H) Moved Out of Committee 02/04/09 (H) MINUTE(RES) 02/06/09 (H) DP: TUCK, JOHNSON, NEUMAN 02/06/09 (H) AM: KAWASAKI 02/06/09 (H) RES RPT 3DP 2NR 1AM 02/06/09 (H) NR: OLSON, WILSON 02/09/09 (H) VERSION: HCR 4 AM 02/09/09 (H) TRANSMITTED TO (S) 02/11/09 (S) READ THE FIRST TIME - REFERRALS 02/11/09 (S) ENE, RES 02/19/09 (S) FIN REFERRAL ADDED 02/27/09 (S) ENE AT 11:00 AM BELTZ 211 BILL: HCR 5 SHORT TITLE: IN-STATE GAS PIPELINE SPONSOR(S): REPRESENTATIVE(S) RAMRAS

01/21/09 (H) READ THE FIRST TIME - REFERRALS

01/21/09 (H) ENE, RES 02/03/09 (H) ENE AT 3:00 PM BARNES 124 02/03/09 (H) Moved Out of Committee 02/03/09 (H) MINUTE(ENE) 02/04/09 (H) ENE RPT 6DP 1NR 02/04/09 (H) DP: TUCK, PETERSEN, DAHLSTROM, RAMRAS, MILLETT, EDGMON 02/04/09 (H) NR: JOHANSEN 02/04/09 (H) RES AT 1:00 PM BARNES 124 02/04/09 (H) Moved Out of Committee 02/04/09 (H) MINUTE(RES) 02/06/09 (H) NR: WILSON 02/06/09 (H) AM: KAWASAKI 02/06/09 (H) DP: OLSON, TUCK, JOHNSON, NEUMAN 02/06/09 (H) RES RPT 4DP 1NR 1AM 02/09/09 (H) TRANSMITTED TO (S) 02/09/09 (H) VERSION: HCR 5 AM 02/11/09 (S) ENE, RES 02/11/09 (S) READ THE FIRST TIME - REFERRALS 02/19/09 (S) FIN REFERRAL ADDED 02/27/09 (S) ENE AT 11:00 AM BELTZ 211 WITNESS REGISTER TREVOR FULTON, Staff to Senator Lesil McGuire Alaska State Legislature Juneau AK POSITION STATEMENT: Presented SB 31. CLAY KOPLIN Cordova AK POSITION STATEMENT: Spoke in favor of SB 31. MARGARET DOWLING, Staff to Representative Jay Ramras Alaska State Legislature Juneau AK POSITION STATEMENT: Presented HCR 2, HCR 3, HCR 4, and HCR 5. LISA PARKER, Manager Agrium Government Relations Kenai AK POSITION STATEMENT: Spoke in favor of HCR 3. CURTIS THAYER, Director Enstar Government Relations and Public Affairs Anchorage AK POSITION STATEMENT: Spoke in favor of HCR 2, 3, 4, and 5. TOM LAKOSH Anchorage AK POSITION STATEMENT: Spoke in opposition to a gas bullet line. ACTION NARRATIVE 11:11:23 AM CHAIR LESIL MCGUIRE called the Senate Special Committee on Energy meeting to order at 11:11 a.m. Senators Stedman, Wielechowski, and McGuire were present at the call to order. SB 31-GEOTHERMAL ELEC. PROD. TAX CREDIT CHAIR MCGUIRE announced the consideration of SB 31. SENATOR WIELECHOWSKI moved to adopt the proposed committee substitute (CS) to SB 31, labeled 26-LS0217\W, as a working document. SENATOR STEDMAN objected for the purpose of discussion. TREVOR FULTON, Staff to Senator McGuire, said the CS to SB 31 changes the amount of the tax credit from 0.35 cents per kilowatt hour to 2.1 cents. The bill is based on Utah's tax credit, and he spoke with someone from there who told him that 0.35 cents was insignificant. The industry told him the same thing. The credit now matches the federal credit. The CS limits eligibility only to projects placed into service after January 1, 2010. Steve Haagenson of AEA (Alaska Energy Authority) noted that if the credit were applied to current hydro projects, Bradley Lake alone would cost the state $133 million. The third change was to cap the amount of the tax credit to 20 percent of capital investment on a given project. This was in response to a concern by the tax division. The language is borrowed from existing oil and gas tax credits. In order to get the bill to function as envisioned, there needs to be a certificate issued by the department to an eligible party that could be sold or transferred in the open market. 11:15:18 AM MR. FULTON said the fifth change was in response to another tax division concern. There was a situation where a power producer could double dip with the federal tax credit "that the state co- ops, to the tune of 18 percent of that production tax credit. So if we had our tax credit created by SB 31 in statute, and the existing federal 18 percent of the federal tax credit in statute, then there's the possibility for an entity to double dip on that. We made changes to the bill and to existing statute that addresses that federal PTC." The CS has a sunset clause of January 1, 2025, which coincides with the governor's goal of using 50 percent renewable energy. 11:16:29 AM SENATOR STEDMAN asked for clarification on the Dorothy Lake issue. He asked the status of the hydro energy sources. CHAIR MCGUIRE said the tax division was concerned about the lost revenue to the state. Hydro is included in the bill because it is the main source of alternative energy in Southeast, but any project in operation prior to 2010 will not be included. SENATOR STEDMAN suggested clearing up expansions to these projects. Dorothy Lake may have a second phase to increase its production capabilities. There are other existing hydro sites that may want to add additional turbines, raise dam levels, or make other enhancements. It appears that this would exclude all hydro projects in service, which would exclude expansions. 11:18:46 AM CHAIR MCGUIRE said she shares those concerns. There are issues of fairness. "Why should we be more favorable to individuals who put in to place alternative energy today and seemingly punitive to those who had the foresight to put them in years ago?" The tax division was concerned about Bradley lake. SENATOR WIELECHOWSKI asked about a fiscal note. MR. FULTON said the fiscal note is indeterminate. SENATOR WIELECHOWSKI said this issue can be worked on in the Senate Resources Committee. 11:20:08 AM CHAIR MCGUIRE said the effects of the incentive won't be known. She hopes that the tax credit incentivizes many projects. It will reduce the state share, but it is difficult to put a dollar amount on it. Starting the credit in 2010 minimizes the loss of state revenues for projects that were easy to quantify. It does create an unlevel playing field. The division can give more testimony in the Senate Resources committee, but the fiscal note will likely remain indeterminate. SENATOR STEDMAN removed his objection to adopting the CS. Therefore, Version W was before the committee. 11:21:34 AM SENATOR STEDMAN moved Amendment 1 to strike the language on page 1, line 14, and on page 2, line 1, "to be further worked on in the next committee of referral." SENATOR WIELECHOWSKI said this can be discussed in the next committee, but he is concerned that by taking that language out, "then we're talking probably hundreds of millions of dollars in tax credits." He said he won't object because the bill is referred to other committees. Senator Stedman raises valid concerns about expansions. Expansions should be encouraged, but it will cost the state hundreds of millions of dollars for things that were done 20 or 30 years ago. SENATOR STEDMAN said he agrees about not looking back in time, but it will give the legislature the ability to target future expansions and upgrades of existing systems. 11:22:52 AM CHAIR MCGUIRE heard no objection, so Amendment 1 was adopted. CLAY KOPLIN, Cordova, said the new credit amount is much more aligned with industry standards and offers a real incentive. There are several renewable energy projects in the pipeline for 2009, so he suggested that January 2010 should be the first eligible tax credit date. That would benefit some of the projects that are constructed before the end of the year. CHAIR MCGUIRE asked what projects are in the works. 11:24:52 AM MR. KOPLIN said he will put a list together. CHAIR MCGUIRE said she hopes this bill will truly incentivize alternative energy in Alaska. SENATOR WIELECHOWSKI moved to report the CS to SB 31 as amended from committee with individual recommendations and attached fiscal note(s). There being no objection, CSSB 31(ENE) passed out of committee. 11:26:03 AM HCR 2-IN-STATE GAS PIPELINE HCR 3-IN-STATE GAS PIPELINE HCR 4-IN-STATE GAS PIPELINE HCR 5-IN-STATE GAS PIPELINE CHAIR MCGUIRE announced the consideration of four House Concurrent Resolutions: HCR 2(RES) am, HCR 3 am, HCR 4 am, and HCR 5 am. MARGARET DOWLING, Staff to Representative Jay Ramras, Alaska State Legislature, said the resolutions remind Representative Ramras of how one eats an elephant: one bite at a time. Each resolution attempts to help get a bullet line with affordable natural gas to hungry Alaskan markets one bite at a time. HCR 2 encourages the administration to promote a bullet line; to identify entities in Gubik or elsewhere on the North Slope that may have sufficient quantities of natural gas to support the line; and to negotiate a commitment with that entity for natural gas production on commercially reasonable terms that would support the economic viability of a gasline. HCR 3 addresses the demand end of the gasline equation by encouraging the administration to expedite the reopening of the Agrium plant in Kenai. The plant closed in 2007 because it lacked an adequate supply of gas. It employed up to 250 people and manufactured fertilizer and ammonia for local use and for export. So HCR 3 also supports the farms of Alaska, which cover over 25,000 acres in five boroughs. There are more than 300 farmers in the Mat-Su borough and 130 in Fairbanks. Since the Agrium plant closed, farmers have experienced a 400 percent increase in the cost of fertilizer, and farming jobs may decline by 150 positions. 11:29:08 AM MS. DOWLING said HCR 4 asks the governor to advocate for an increase in the amount of gas that may be exported under U.S. Department of Energy licenses to 60 bcf per year. Current licenses are set to expire in 2011, and the Kenai LNG export facility could be forced to close unless additional supplies of gas are found in the Cook Inlet. HCR 5 gives the administration a timeline for these projects. It basically tells it to lend a hand, use the resources it has, and then get out of the way. It requests that the governor facilitate the process for a private entity to make a final commitment before November 1, 2010. In summary, these resolutions urge the administration to take the lead for instate gas. Alaskans need a cheap, clean, and reliable source of fuel, and a bullet line will do that. The governor has the resources to make that happen, and these resolutions will just encourage her to do so. 11:31:02 AM SENATOR WIELECHOWSKI said HCR 2 talks about 180 billion cubic feet per year, and he asked what that is per day. There is a provision in AGIA that "we" can't go over 500 mcf per day. MS. DOWLING said nothing in these resolutions will conflict with AGIA. The intent is that any pipeline would fit within the limitations of AGIA. 11:31:50 AM SENATOR WIELECHOWSKI said page 2, lines 13-18, of HCR 2 talks about exporting natural gas overseas. If there are 60 bcf for the Railbelt and 60 bcf for industrial use, will it be sufficient to supply gas for Alaskans? He doesn't want to support shipping gas overseas if Alaskans aren't taken care of. MS. DOWLING said Representative Ramras knows about that concern. These resolutions don't have the force of law. It is a way to encourage consistent demand so the pipeline can be viable. There will be many opportunities to weigh in on these licenses. An amendment to HCR 2 puts Alaskans first. 11:33:07 AM SENATOR WIELECHOWSKI said the issue of the time availability for Gubik gas came up in a Senate Resources hearing several weeks ago. Enstar said it needs gas by 2015, and Gubik won't be on line until 2016, at the earliest. The big gasline will be available in 2018. Everyone wants to get gas as quickly as possible to Alaska consumers, but what about this disconnect? MS. DOWLING said there is an expectation of other sources of natural gas, and all should be explored. The resolution mentions Gubik and the North Slope, but it isn't meant to be exclusive. CHAIR MCGUIRE said page 2 of HCR 2 refers to promoting the development of the Gubik area and other North Slope areas. MS. DOWLING said it is not exclusive to any one producer or entity. It is to be as broad as possible in finding gas. 11:34:56 AM CHAIR MCGUIRE said Senator Wielechowski has a good point. It was disappointing to hear of those dates in a prior committee. Natural resource exploration timeframes can move, but it may happen sooner. These are good resolutions. SENATOR STEDMAN said HCR 2 is "the 500 a day." "Close enough." CHAIR MCGUIRE said she has to be mindful of that 500 million mcf limit in AGIA, but a lot of things can happen. We don't know that a pipeline will come to fruition under AGIA. "I would hope that we continue to be innovative in getting natural gas to Alaskans, and it may well be that we find a project that is larger than that for the pure economics of it." 11:36:43 AM SENATOR WIELECHOWSKI noted that HCR 5 talks about government getting out of the way. That may be the best course of action, but what role will ANGDA have as a governmental organization that is working on the exact same thing? MS. DOWLING said she will ask Representative Ramras. 11:37:42 AM LISA PARKER, Manager, Government Relations, Agrium, Kenai, said the resolutions are important for providing economic stability to Alaska and to get gas to consumers -- residential and industrial. After 40 years of operation, Agrium shut down its facility in 2007 due to a lack of natural gas supply in Cook Inlet. Agrium put over $350 million per year into the Alaska economy at its peak. Agrium supports a bullet line and has had discussions with state agencies about it. If the line is constructed in the next 5 to 7 years, Agrium could put a $1 billion industrial facility back into operation on the Kenai Peninsula. It would provide a stable tax base and jobs. It would help the agricultural industry and the Department of Transportation and Public Facilities for airports that use urea. 11:39:52 AM SENATOR WIELECHOWSKI thanked her for her advocacy. Everyone wants to get Agrium back. What price per mcf makes it feasible for Agrium to reopen? MS. PARKER said she will provide that. SENATOR WIELECHOWSKI said in the past Agrium was paying $3 per mcf and that was stretching Agrium's finances. The costs that he has heard are Henry hub, which can fluctuate from $4 to $12 per mcf. Is the bullet line the best way to get the cheapest gas for Southcentral and at a price that Agrium can do business? MS. PARKER said Agrium was paying "Henry hub plus" in the latter years of operation. The devil will be in the details of the bullet line and what the price will be. 11:41:46 AM CHAIR MCGUIRE said it was hard for the lawmakers who really tried to keep Agrium open. Her heart goes out to the 250 employees. It is a loss. CURTIS THAYER, Director, Government Relations and Public Affairs, Enstar, said he supports all four resolutions. They provide a foundation for the project to move forward. The industrial anchor in HCR 3 or the LNG plant in HCR 4 cannot be overemphasized for providing a reasonable tariff for the consumers along the Railbelt. Enstar thanks Representative Ramras and other. About 18 months ago ACES set a tax rate that helped spur development in Gubik, the Nenana Basin, and the Yukon Flats. This will be a long process but he hopes to be successful in the next five to seven years. 11:43:38 AM TOM LAKOSH, Anchorage, asked the committee to recall SB 31 because his testimony was blocked by the moderator. He was denied his constitutional right to petition his government. He would also like to voice concerns about the bullet line as a $4 billion boondoggle for the following reasons. Gas producers will not commit to long-term gas for the bullet line because the tariffs will be too high. They will be able to make more money on the main gasline that will follow in a year or two. More than half of the gasline will become obsolete a year or two after construction because the mainline will deliver it more cheaply. The overly optimistic projections of the bullet line tariffs depend on an explosion of use in Southcentral. The proposed carbon tax, energy conservation measures, and renewable power projects will greatly reduce gas use. The cost per unit of gas will triple. The increased costs will cause lower gas use, further increasing the per unit cost. He made the same argument to the Bonneville Power Administration when it was building the whoops power plants [Washington Public Power Supply System] that were shut down because the cost of electricity became too expensive and the plants were no longer needed. MR. LAKOSH said any near-term shortage of gas in Southcentral can be quickly remedied by the cancelation of the export license for Cook Inlet gas that will lower gas rates, and if we still need additional gas in the long-term, we could then build a shorter spur off of the main line in Fairbanks for less than $2 billion. The excuse that production must be maintained to prevent degradation of the production is a flimsy excuse for maintaining export where the Agrium plant can provide for interruptible consumption of gas to maintain production rates. The specific production needs of each field would be required to definitively ascertain if degradation would occur from slower gas production rates. In those fields where degradation would not occur from slower production, gas can be stored for exceptional winter needs. Some exhausted gas fields on the Kenai are being proposed for this very purpose. On-land storage in tanks in compressed or liquid form is also being proposed to serve high-use periods, and production can be maintained from degrading gas fields by supplying those storage facilities. If it is determined that continuous production from gas fields must be maintained for gas conservation, the production of fertilizer and employment at the Agrium plant is of substantially greater value to Alaskans and should be deemed a more beneficial use of Alaska natural gas. It is a clear constitutional justification for cancelation of the export license. 11:47:25 AM CHAIR MCGUIRE asked for his testimony in writing. She said he can testify on SB 31 in the Senate Resources Committee. MR. LAKOSH said cancellation of the export license for the LNG plant in Nikiski will force the oil companies to look for more gas in Cook Inlet and the spur line won't be needed at all when new gas fields are developed. For the price of the pipeline, one gigawatt of renewable energy could be built at $3,000 per kilowatt and still have $1 billion left over for transmission of those alternative energy sources. He urged the committee not to spur the state to spend a thin dime on this boondoggle. 11:49:13 AM CHAIR MCGUIRE said when she was in the resources committee a few years ago, she offered an instate tax credit for the Nenana Basin, and there was discussion on whether it would incentivize natural gas exploration. It is good to hear Enstar personnel talk about it. She hopes to see more development. She hopes SB 31 will offer such benefits. Tax incentives really do help. SENATOR WIELECHOWSKI moved to report HCR 2 from committee with individual recommendations and attached fiscal note(s). There being no objection, HCR 2(RES) am moved from committee. SENATOR WIELECHOWSKI moved to report HCR 3 from committee with individual recommendations and attached fiscal note(s). There being no objection, HCR 3 am moved from committee. SENATOR WIELECHOWSKI moved to report HCR 4 from committee with individual recommendations and attached fiscal note(s). There being no objection, HCR 4 am moved from committee. SENATOR WIELECHOWSKI moved to report HCR 5 from committee with individual recommendations and attached fiscal note(s). There being no objection, HCR 5 am moved from committee. 11:51:37 AM There being no further business to come before the committee, Chair McGuire adjourned the meeting at 11:51 a.m.

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