Legislature(2001 - 2002)

03/13/2002 03:40 PM NGP

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                        ALASKA LEGISLATURE                                                                                    
             JOINT COMMITTEE ON NATURAL GAS PIPELINES                                                                         
                          March 13, 2002                                                                                        
                             3:40 p.m.                                                                                          
                                                                                                                                
                                                                                                                                
SENATE MEMBERS PRESENT                                                                                                        
                                                                                                                                
Senator John Torgerson, Chair                                                                                                   
Senator Johnny Ellis                                                                                                            
Senator Don Olson (Alternate)                                                                                                   
                                                                                                                                
SENATE MEMBERS ABSENT                                                                                                         
                                                                                                                                
Senator Rick Halford                                                                                                            
Senator Pete Kelly                                                                                                              
                                                                                                                                
HOUSE MEMBERS PRESENT                                                                                                         
                                                                                                                                
Representative Brian Porter                                                                                                     
Representative Scott Ogan                                                                                                       
Representative John Davies                                                                                                      
Representative Reggie Joule (Alternate)                                                                                         
                                                                                                                                
HOUSE MEMBERS ABSENT                                                                                                          
                                                                                                                                
Representative Joe Green, Vice Chair                                                                                            
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Senator Ben Stevens                                                                                                             
Senator Gary Wilken                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
Energy Council Report                                                                                                           
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 02-5, SIDE A                                                                                                             
                                                                                                                                
Number 001                                                                                                                      
                                                                                                                                
CHAIRMAN JOHN  TORGERSON called the  Joint Committee on Natural  Gas                                                          
Pipelines meeting to order  at 3:40 p.m. and announced the committee                                                            
would first  hear a  brief overview  of the Energy  Council  trip to                                                            
Washington D.C. by Representative Ogan.                                                                                         
                                                                                                                                
REPRESENTATIVE  OGAN told members  the Energy Council meeting  was a                                                            
very valuable meeting to  attend. The chairman of the Federal Energy                                                            
Regulatory  Commission (FERC), Mr.  Wood, addressed the Council.  He                                                            
asked Mr.  Wood whether or  not FERC would  be willing to work  with                                                            
the Regulatory  Commission  of Alaska (RCA)  and the possibility  of                                                            
the RCA having  a seat at the table. Mr. Wood responded  that he's a                                                            
good friend of  Nan Thompson, the Chair of the RCA,  and he would be                                                            
more than happy to work  with her. He said that FERC plans to hold a                                                            
meeting in Alaska.                                                                                                              
                                                                                                                                
He said  that  two other  people expressed  some  concerns over  the                                                            
Knowles-Daschle  announcement  of a floor for  the price of  gas. He                                                            
said [the announcement]  may have  been premature and it  galvanized                                                            
opposition from states that produce gas in the Lower 48.                                                                        
                                                                                                                                
REPRESENTATIVE  OGAN said that the  highlight of the Energy  Council                                                            
meeting  for him  was  the keynote  address  at the  Energy  Council                                                            
luncheon  by  Senator  Bingaman,  Chair  of the  Senate  Energy  and                                                            
Resources  Committee. He had  a short debate  with Senator  Bingaman                                                            
about ANWR as the energy  bill had not been given a Senate Resources                                                            
Committee referral  because Senator Murkowski had  the votes to pass                                                            
ANWR on  the committee.  He surmised,  "Apparently,  the only  thing                                                            
they could do was filibuster  the bill; they couldn't filibuster the                                                            
ANWR issue if it was already on the floor."                                                                                     
                                                                                                                                
REPRESENTATIVE  OGAN said he pointed  out that Alaska has  six times                                                            
as many  caribou on the  North Slope now  than when oil development                                                             
began, that  Alaska exports  its environmental  technology  all over                                                            
the world, and that it  has developed only 2,000 acres at the end of                                                            
the  day.  He  stated,  "We cannot  conserve   our way  out  of  our                                                            
dependency on foreign oil...."                                                                                                  
                                                                                                                                
He said that  Democrats in the Senate  were talking about  requiring                                                            
20%  more efficiency  in  oil  consumption  and  that the  U.S.  has                                                            
accomplished only  2%. Twenty percent would be almost  impossible to                                                            
obtain with  current technology.  He was also  told that the  people                                                            
who blew up  the World Trade Center  were partially funded  by money                                                            
from oil that is imported  into the U.S. and that developing ANWR is                                                            
a national  security issue. He was  told that the Gulf of  Mexico is                                                            
an alternative source, but he thought that was a mature field.                                                                  
                                                                                                                                
REPRESENTATIVE  OGAN told members  that industry experts  said there                                                            
would  be a 43%  increase in  the demand  for power  in the next  20                                                            
years and natural  gas is expected to meet those increases.  Nuclear                                                            
and  coal industry  experts  presented  their  plans with  the  coal                                                            
industry  looking for a  way to gasify  the coal  to make it  clean-                                                            
burning,  but the technology  is a ways off.  He learned that  there                                                            
was an increase  in the output of  nuclear generated power  although                                                            
there are  no new plants  or permits. They  just tweak what  they've                                                            
got.                                                                                                                            
                                                                                                                                
He  said that  everyone  was concerned  about  the outcome  of  ANWR                                                            
because it wasn't going  to go through a committee process. He heard                                                            
the thing that drove action  on the energy bill was the Enron issue.                                                            
One person talked  about the subsurface being dominant  [and] giving                                                            
surface owners more say in exploration.                                                                                         
                                                                                                                                
REPRESENTATIVE OGAN continued  to say that Representatives Joule and                                                            
Kookesh met  with democratic  senators on  behalf of Alaska  Natives                                                            
who desire to  see ANWR opened to development. He  concluded that it                                                            
was a very valuable trip  and related some personal experiences with                                                            
his family.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  DAVIES gave the following  responses to some  of the                                                            
issues Representative Ogan discussed:                                                                                           
                                                                                                                                
     The issue of politics and  pulling the bill - clearly that                                                                 
     happens.  The  Republican  majority  leader not  too  many                                                                 
     months  ago did exactly the same  thing. But the issue  of                                                                 
     the floor  - Senator Murkowski has already raised  that in                                                                 
     public. People already know  about that - that's not a new                                                                 
     discussion.  John Katz observed  that you're not going  to                                                                 
     get an issue  that has that kind of significant  financial                                                                 
     impact through the dark  of the night. It's going to be an                                                                 
     issue that's  going to be discussed one way or  the other.                                                                 
                                                                                                                                
     With respect  to conservation,  it's absolutely true  that                                                                 
     democrats are working hard  for conservation. That doesn't                                                                 
     mean  that they're  not also  working for  development  of                                                                 
     resources.  So, I resent  that comparison  or insinuation                                                                  
     the democrats  are only working for conservation.  Clearly                                                                 
     they  are, but they  see many other  avenues as viable  as                                                                 
     well. It certainly is true  that conservation is extremely                                                                 
     significant.   A quite  doable  conservation   goal  could                                                                 
     equivalently produce what  would come out of ANWR. That is                                                                 
     not  to say  that we  shouldn't do  ANWR or  shouldn't  do                                                                 
     development,  but  it's also  to say that  it's extremely                                                                  
     important and shouldn't be off the table.                                                                                  
                                                                                                                                
CHAIRMAN TORGERSON  said the three deal killers are  CAFÉ standards,                                                            
which are the  conservation measures (Democrats and  Republicans are                                                            
all over  the board on that  one), the nuclear  power issue  and the                                                            
electric  'derestructuring'  (they want to  regulate it again),  and                                                            
ANWR. He explained:                                                                                                             
                                                                                                                                
     They look at whatever we're  going to send down there, 4.5                                                                 
     - 5 Bs of  gas, as a stabilizing effect on the  market, so                                                                 
     the  market may not  grow. Of course,  they have a dog  in                                                                 
     that fight,  because they sell the product, but  so do the                                                                 
     producers.                                                                                                                 
                                                                                                                                
CHAIRMAN  TORGERSON  said  that  a  month  ago Legislative   Council                                                            
approved additional  funds for the committee to hire  a tax attorney                                                            
and he  then had  it broadened to  include bond  counsel, since  the                                                            
Alaska Railroad  tax-exempt bonds became an issue.  He reported that                                                            
today was  the last day for  people to respond  to his RFP.  He sent                                                            
out five and  three came back non-responsive  because of  conflicts.                                                            
He  said they  would  look at  two bids  later  today.  One is  from                                                            
Ballard, Spear and Andrews  in Washington D.C. and the other is from                                                            
Hogan and Harston,  our current lawyers in Washington  D.C. who have                                                            
a large tax division in their operation, too.                                                                                   
                                                                                                                                
REPRESENTATIVE  OGAN moved to recess the regular meeting  to go into                                                            
executive session  under Rule 22(b)(1), "Finances  of the State...,"                                                            
to hear from the  state's attorney in Washington D.C.  There were no                                                            
objections and it was so ordered at 3:52 p.m.                                                                                   
                                                                                                                                
                                                                                                                                

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