Legislature(2015 - 2016)BUTROVICH 205

04/10/2015 03:30 PM RESOURCES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Public Testimony --
+ HJR 18 LIMIT DECLARATION OF NATL. MONUMENTS TELECONFERENCED
Moved SCS CSHJR 18(RES) Out of Committee
*+ SB 101 STATE PARKS FEES & SALES OF MERCHANDISE TELECONFERENCED
Heard & Held
+= SB 50 AIDEA: BONDS;PROGRAMS;LOANS;LNG PROJECT TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                         April 10, 2015                                                                                         
                           3:30 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Cathy Giessel, Chair                                                                                                    
Senator Mia Costello, Vice Chair                                                                                                
Senator John Coghill                                                                                                            
Senator Peter Micciche                                                                                                          
Senator Bert Stedman                                                                                                            
Senator Bill Stoltze                                                                                                            
Senator Bill Wielechowski                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CS FOR HOUSE JOINT RESOLUTION NO. 18(RES)                                                                                       
Urging the United  States Congress to pass  the Improved National                                                               
Monument Designation Process Act.                                                                                               
                                                                                                                                
     - MOVED SCS CSHJR 18(RES) OUT OF COMMITTEE                                                                                 
                                                                                                                                
SENATE BILL NO. 101                                                                                                             
"An  Act  relating   to  fees  for  use  of   state  park  system                                                               
facilities;  and  relating to  the  sale  of merchandise  by  the                                                               
Department of Natural Resources."                                                                                               
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 50                                                                                                              
"An  Act  relating  to  the  programs and  bonds  of  the  Alaska                                                               
Industrial  Development  and  Export Authority;  related  to  the                                                               
financing   authorization    through   the    Alaska   Industrial                                                               
Development  and  Export Authority  of  a  liquefied natural  gas                                                               
production   plant   and   natural  gas   energy   projects   and                                                               
distribution systems  in the state;  amending and  repealing bond                                                               
authorizations granted  to the Alaska Industrial  Development and                                                               
Export Authority; and providing for an effective date."                                                                         
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HJR 18                                                                                                                  
SHORT TITLE: LIMIT DECLARATION OF NATL. MONUMENTS                                                                               
SPONSOR(s): REPRESENTATIVE(s) MILLETT                                                                                           
                                                                                                                                
03/16/15       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/16/15       (H)       RES                                                                                                    
03/30/15       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/30/15       (H)       Moved  CSHJR 18(RES) Out of Committee                                                                  
03/30/15       (H)       MINUTE(RES)                                                                                            
03/31/15       (H)       RES RPT CS(RES) 5DP 1DNP 2AM                                                                           
03/31/15       (H)       DP: HERRON, JOHNSON, OLSON, HAWKER,                                                                    
                         TALERICO                                                                                               
03/31/15       (H)       DNP: JOSEPHSON                                                                                         
03/31/15       (H)       AM: SEATON, TARR                                                                                       
04/08/15       (H)       TRANSMITTED TO (S)                                                                                     
04/08/15       (H)       VERSION: CSHJR 18(RES)                                                                                 
04/09/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/09/15       (S)       RES                                                                                                    
04/10/15       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: SB 101                                                                                                                  
SHORT TITLE: STATE PARKS FEES & SALES OF MERCHANDISE                                                                            
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
04/08/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/08/15       (S)       RES, FIN                                                                                               
04/10/15       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: SB  50                                                                                                                  
SHORT TITLE: AIDEA: BONDS;PROGRAMS;LOANS;LNG PROJECT                                                                            
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
02/11/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/11/15       (S)       NRG, RES, FIN                                                                                          
03/10/15       (S)       NRG AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
03/10/15       (S)       Heard & Held                                                                                           
03/10/15       (S)       MINUTE(NRG)                                                                                            
03/26/15       (S)       NRG AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
03/26/15       (S)       Moved  CSSB 50(NRG) Out of Committee                                                                   
03/26/15       (S)       MINUTE(NRG)                                                                                            
03/27/15       (S)       NRG RPT CS  3DP 1NR  SAME TITLE                                                                        
03/27/15       (S)       DP: EGAN, BISHOP, HOFFMAN                                                                              
03/27/15       (S)       NR: MICCICHE                                                                                           
03/30/15       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/30/15       (S)       Heard & Held                                                                                           
03/30/15       (S)       MINUTE(RES)                                                                                            
04/03/15       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
04/03/15       (S)       -- MEETING CANCELED --                                                                                 
04/09/15       (S)       FIN AT 1:30 PM SENATE FINANCE 532                                                                      
04/09/15       (S)       <Pending Referral>                                                                                     
04/10/15       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JEFF TURNER, staff to Representative Millett                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Explained HJR 18 for the sponsor.                                                                        
                                                                                                                                
RANDY RUARO, staff to Senator Stedman                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Commented on HJR 18.                                                                                      
                                                                                                                                
BEN ELLIS, Director                                                                                                             
Division of Parks and Outdoor Recreation                                                                                        
Department of Natural Resources (DNR)                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Explained the rationale for SB 101.                                                                      
                                                                                                                                
FRED PARADY, Deputy Commissioner                                                                                                
Department of Commerce, Community and Economic Development                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Explained SB 50.                                                                                         
                                                                                                                                
NICK SZYMONIAK, Energy Infrastructure Development Officer                                                                       
Alaska Industrial Development and Export Authority (AIDEA)                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Explained SB 50.                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:30:23 PM                                                                                                                    
CHAIR  CATHY   GIESSEL  called  the  Senate   Resources  Standing                                                             
Committee meeting  to order at 3:30  p.m. Present at the  call to                                                               
order  were   Senators  Stedman,  Costello,  Coghill   and  Chair                                                               
Giessel.                                                                                                                        
                                                                                                                                
          HJR 18-LIMIT DECLARATION OF NATL. MONUMENTS                                                                       
                                                                                                                                
3:30:58 PM                                                                                                                    
CHAIR  GIESSEL  announced  the consideration  of  HJR  18  [CSHJR                                                               
18(RES) was before the committee].                                                                                              
                                                                                                                                
SENATOR  COSTELLO moved  to  adopt  SCS HJR  18(  ), version  29-                                                               
LS0707\N, as the working document.                                                                                              
                                                                                                                                
CHAIR GIESSEL objected for discussion purposes.                                                                                 
                                                                                                                                
JEFF  TURNER,  staff  to  Representative  Millett,  Alaska  State                                                               
Legislature,  Juneau, Alaska,  explained  that HJR  18 urges  the                                                               
United  States Congress  to pass  the Improved  National Monument                                                               
Designation  Process   Act.  Sponsored   by  U.S.   Senator  Lisa                                                               
Murkowski  and  co-sponsored  by  Senator Dan  Sullivan,  SB  437                                                               
creates  new  requirements  and   limits  the  authority  of  the                                                               
president  to  create  or expand  existing  monuments  under  the                                                               
Antiquities  Act  of 1906.  Passed  under  the administration  of                                                               
President Teddy Roosevelt, it grants  the president of the United                                                               
States the  power to create  national monuments that  protect and                                                               
preserve important land marks  in environmentally sensitive areas                                                               
using the  smallest area  necessary to  conserve and  protect the                                                               
monument.                                                                                                                       
                                                                                                                                
3:32:50 PM                                                                                                                    
SENATOR MICCICHE joined the committee.                                                                                          
                                                                                                                                
MR. TURNER  continued that  while this act  has been  used wisely                                                               
for  decades to  preserve  some of  America's  most pristine  and                                                               
important areas,  a lot  has changed. There  are more  demands on                                                               
public lands than  ever and state and local economies  need to be                                                               
taken into consideration. Tourism,  hunting, commercial and sport                                                               
fishing,  and  natural resource  development  all  take place  on                                                               
public lands. The time has come  to make the process for creating                                                               
national monuments more comprehensive.                                                                                          
                                                                                                                                
3:32:59 PM                                                                                                                    
He  said   SB  437  makes   three  significant  changes   to  the                                                               
Antiquities Act. First, it requires  specific authorization by an                                                               
act  of Congress  to designate  a national  monument. Second,  it                                                               
requires  approval  by  the state  legislature  and,  for  marine                                                               
national   monuments,  it   requires  approval   by  each   state                                                               
legislature  within  100  miles  of the  proposed  monument.  And                                                               
third, it must conform to  the National Environmental Policy Act.                                                               
These  commonsense  changes will  bring  the  act into  the  21st                                                               
Century.                                                                                                                        
                                                                                                                                
Why is the improved National  Monument Designation Process Act so                                                               
important and why is it important  to Alaska? Right now there are                                                               
142 national monuments nationwide; 10  of them were created and 2                                                               
more   were  expanded   since  the   current  administration   in                                                               
Washington, D.C., started  its second term in  January 2013. They                                                               
were all created  without the approval of Congress  or the states                                                               
where  the monuments  were created.  The last  one in  Alaska was                                                               
created by President Carter in 1978.                                                                                            
                                                                                                                                
Senator  Murkowski   filed  this   legislation  because   she  is                                                               
concerned  about  the potential  for  new  national monuments  in                                                               
Alaska that are  going to restrict or  outright prohibit critical                                                               
economic  activity. Two  possible sites,  in particular,  are the                                                               
Aleutian  Islands  and  the   Arctic  National  Wildlife  Refuge.                                                               
President Obama  will be in Alaska  this summer and no  one knows                                                               
if he will announce the creation  of a new national monument, but                                                               
the two  senators are worried that  will happen and filed  SB 437                                                               
and Representative Millett filed HJR 18 to support it.                                                                          
                                                                                                                                
MR. TURNER referred  to an article from the  Fairbanks Daily News                                                               
Miner January  25 in  which Senator  Murkowski said  that nothing                                                               
will happen in  congress and she was worried  the president would                                                               
use  the authority  of the  Antiquities  Act and  put the  Arctic                                                               
National Wildlife  Reserve (ANWR) in permanent  wilderness status                                                               
and lock it up.                                                                                                                 
                                                                                                                                
This month  the White  House transmitted  to Congress  its formal                                                               
request to  designate the  Coastal Plain  of ANWR  as wilderness.                                                               
The proposal is  very unlikely to pass congress, so  the stage is                                                               
set for the president to use  the Antiquities Act and lock up the                                                               
most  promising  on-shore oil  and  gas  prospect in  the  entire                                                               
country  and starve  the TransAlaska  Pipeline  (TAPS) from  oil.                                                               
They are not seeking to  stop creation of new national monuments,                                                               
but to make the process better.                                                                                                 
                                                                                                                                
3:33:48 PM                                                                                                                    
SENATOR STOLTZE joined the committee.                                                                                           
                                                                                                                                
3:36:11 PM                                                                                                                    
RANDY RUARO, Staff to Senator  Stedman, Alaska State Legislature,                                                               
Juneau, Alaska,  said that Senator  Stedman had proposed  on page                                                               
2, lines 10-15  and lines 24-26, to insert  language that reminds                                                               
the federal government  that there is already in  statute the "no                                                               
more clauses"  of Alaska National Interest  Land Conservation Act                                                               
(ANILCA)  that were  intended to  prevent unilateral  exercise of                                                               
federal authority to designate more  wilderness areas or parks in                                                               
Alaska.  His language  supplements the  intent of  the resolution                                                               
well, which is  to add clarity and boundaries to  the exercise of                                                               
executive authority.                                                                                                            
                                                                                                                                
CHAIR GIESSEL  asked Mr. Turner  if the change was  acceptable to                                                               
the sponsor.                                                                                                                    
                                                                                                                                
MR. TURNER answered yes.                                                                                                        
                                                                                                                                
CHAIR GIESSEL removed  her objection and the Senate  CS for CSHJR                                                               
18, version N, was adopted.                                                                                                     
                                                                                                                                
SENATOR  STEDMAN noted  that a  couple of  the national  monument                                                               
proclamations had  been abolished: one  in Lake Lewis  and Clark,                                                               
Montana,  and another  one the  Shoshone cabins  in Wyoming.  So,                                                               
apparently, it can be done.                                                                                                     
                                                                                                                                
MR. TURNER  commented that national monuments  had been abolished                                                               
in the past  for a couple of reasons: one  is a national monument                                                               
that  later  on  was  determined  to  not  be  that  historically                                                               
significant;  another  one  was  a  site  explored  by  a  French                                                               
explorer in  North or  South Dakota and  it was  later determined                                                               
that explorer  was never at  that site.  Another in New  York was                                                               
taken over and turned into a state/national park.                                                                               
                                                                                                                                
SENATOR MICCICHE said what is  scary about the Antiquities Act is                                                               
that  the  one that  was  vetoed  by  a  state in  Jackson  Hole,                                                               
Wyoming, was not overridden by the court.                                                                                       
                                                                                                                                
MR. TURNER summarized  that there are over 300  million people in                                                               
this country, but  the power to create a  national monument rests                                                               
entirely  in  the hands  of  one  person  who  can't seem  to  be                                                               
challenged on any level.                                                                                                        
                                                                                                                                
3:41:30 PM                                                                                                                    
SENATOR  COGHILL offered  Amendment  1  on page  2,  line 15,  to                                                               
delete "by federal legislation" and say  that no more land in the                                                               
state should be set aside, period.                                                                                              
                                                                                                                                
CHAIR GIESSEL objected for discussion.                                                                                          
                                                                                                                                
SENATOR STEDMAN said it was fine with him.                                                                                      
                                                                                                                                
MR. RUARO  said the amendment  is important because the  "no more                                                               
clause"   has  expanded   beyond  legislation   by  Congress   to                                                               
unilateral action by the president, as well.                                                                                    
                                                                                                                                
MR. TURNER said the sponsor approves of the change.                                                                             
                                                                                                                                
CHAIR  GIESSEL   removed  her   objection  and   without  further                                                               
objection, Amendment 1 was adopted.                                                                                             
                                                                                                                                
3:44:30 PM                                                                                                                    
SENATOR MICCICHE  said considering  the Jackson Hole  case, which                                                               
used the Antiquities Act for  a national monument, he wondered if                                                               
ANILCA  could give  Alaska standing  if the  same issue  occurred                                                               
under the "no more clause."                                                                                                     
                                                                                                                                
MR.  RUARO  replied  that  ANILCA  gives  Alaska  a  very  strong                                                               
position of standing if that same situation were to occur here.                                                                 
                                                                                                                                
CHAIR GIESSEL  opened public testimony  and finding  none, closed                                                               
public testimony.                                                                                                               
                                                                                                                                
3:45:47 PM                                                                                                                    
SENATOR WIELECHOWSKI joined the committee.                                                                                      
                                                                                                                                
SENATOR WIELECHOWSKI  asked how many acres  President George Bush                                                               
expanded under the Antiquities Act.                                                                                             
                                                                                                                                
MR. TURNER  replied that he didn't  have that number in  front of                                                               
him, but would get it.                                                                                                          
                                                                                                                                
SENATOR  WIELECHOWSKI  asked  how  many  new  national  monuments                                                               
President George Bush established.                                                                                              
                                                                                                                                
MR. TURNER answered that he didn't see one on his list.                                                                         
                                                                                                                                
SENATOR  WIELECHOWSKI   said  he  thought  that   list  might  be                                                               
inaccurate and asked  if he had a listing of  how many presidents                                                               
established national monuments.                                                                                                 
                                                                                                                                
MR. TURNER answered 16.                                                                                                         
                                                                                                                                
SENATOR  STEDMAN remarked  on  the magnitude  of  the impacts  on                                                               
Alaska regardless of which president  did it and he thought there                                                               
would be more emphasis on Alaska in the future.                                                                                 
                                                                                                                                
3:48:37 PM                                                                                                                    
SENATOR MICCICHE said  it looks there were 15  by President Obama                                                               
and President George Bush did 6.                                                                                                
                                                                                                                                
MR.  TURNER corrected  his  previous testimony  and  said 6  were                                                               
created under the second President Bush.                                                                                        
                                                                                                                                
SENATOR WIELECHOWSKI  said his 2009  article says  President Bush                                                               
invoked the  Antiquities Act to establish  three marine monuments                                                               
that protect 125  million acres of habitat, and  according to the                                                               
article,  it was  the most  sweeping use  of the  Antiquities Act                                                               
since 1906.  He asked if  the resolution  could be made  more bi-                                                               
partisan.                                                                                                                       
                                                                                                                                
CHAIR GIESSEL responded  that the information in  his article was                                                               
outdated and that President Obama had created 15.                                                                               
                                                                                                                                
SENATOR WIELECHOWSKI asked if the  legislature took any action or                                                               
do  any  resolutions  when President  Bush  undertook  his  "most                                                               
sweeping actions since 1906."                                                                                                   
                                                                                                                                
MR. TURNER replied that he wasn't  aware of any and explained the                                                               
point they are trying to make  is that an unprecedented number of                                                               
national monuments  had been created  and expanded in  this state                                                               
in the space of two years and one month.                                                                                        
                                                                                                                                
3:51:03 PM                                                                                                                    
He  understood  Senator  Wielechowski's point  about  pointing  a                                                               
finger  at the  current administration,  but this  is for  future                                                               
administrations. The  point is  that a  public process  should be                                                               
created that  brings everyone  to the table  instead of  just one                                                               
person having the ability to create a national monument.                                                                        
                                                                                                                                
3:51:38 PM                                                                                                                    
SENATOR WIELECHOWSKI asked if they  should urge revocation of all                                                               
national monuments  that have been invoked  by presidents without                                                               
congressional approval as part of this resolution.                                                                              
                                                                                                                                
MR.  TURNER   answered  that  was  not   part  of  Representative                                                               
Millett's  resolution and  there is  a concern  about what  could                                                               
happen to ANWR when President Obama visits Alaska.                                                                              
                                                                                                                                
3:52:26 PM                                                                                                                    
SENATOR STEDMAN asked  the committee to reflect  that Sitka under                                                               
President Taft was  number 24. On the repeal issue,  if they were                                                               
to do that, it would be  attractive to look at Glacier Bay, which                                                               
is the area lost to submerged lands.                                                                                            
                                                                                                                                
3:54:38 PM                                                                                                                    
SENATOR MICCICHE commented that the  focus on Alaska seemed to be                                                               
from President Carter with Admiralty Island.                                                                                    
                                                                                                                                
SENATOR COSTELLO  moved to report SCS  CSHJR 18( ), version  N as                                                               
amended,  from  committee  with  individual  recommendations  and                                                               
attached fiscal note(s).  There were no objections  and SCS CSHJR                                                               
18(RES) was reported from Senate Resources Standing Committee.                                                                  
                                                                                                                                
                                                                                                                                
3:55:42 PM                                                                                                                    
At ease from 3:55 to 3:57.                                                                                                      
                                                                                                                                
         SB 101-STATE PARKS FEES & SALES OF MERCHANDISE                                                                     
                                                                                                                                
3:57:17 PM                                                                                                                    
CHAIR GIESSEL announced the consideration of SB 101.                                                                            
                                                                                                                                
BEN ELLIS,  Director, Division of  Parks and  Outdoor Recreation,                                                               
Department of  Natural Resources  (DNR), Juneau, Alaska,  said SB                                                               
101  is necessary  to allow  the  Division of  Parks and  Outdoor                                                               
Recreation to  sell state park merchandise  to retailers ensuring                                                               
a  fair  and  reasonable  return   to  help  support  state  park                                                               
operations, thereby reducing reliance on the general fund.                                                                      
                                                                                                                                
SB 101  would add a new  subsection to AS 41.21.026  to grant the                                                               
DNR  the  authority  to  sell  the  retailers  state  park-themed                                                               
merchandise  for   informational,  educational   and  promotional                                                               
purposes  to support  park operations.  The  new subsection  that                                                               
would allow  the department to  establish prices  for park-themed                                                               
merchandise is to  ensure a fair and reasonable  return. It would                                                               
also remove language in AS  41.21.026(a) requiring all fees to be                                                               
collected in  a park unit,  making clear that the  department has                                                               
the  authority  to collect  fees  at  locations outside  of  park                                                               
units.                                                                                                                          
                                                                                                                                
3:58:48 PM                                                                                                                    
MR. ELLIS said  the bill is needed to help  the division get more                                                               
revenue.  The  division  currently  generates  about  $3  million                                                               
annually from park fees and  33 percent of their operating budget                                                               
is  covered by  these fees.  Fees  were raised  across the  board                                                               
going  into the  2015 season  projecting the  same usage  as last                                                               
year  and that  results  in  about a  42-44  percent increase  in                                                               
revenue.  It has  been his  and the  commissioner's goal  to find                                                               
alternative ways to help fund  more recreational opportunities in                                                               
Alaska. A  number of  states use this  model; South  Carolina has                                                               
done  it for  10 years  and raises  about $1.72  million annually                                                               
above  what  their  merchandising  program  costs  to  run.  This                                                               
proposal would get Alaska going in that direction.                                                                              
                                                                                                                                
SB  101  would allow  the  state  to  create, purchase  and  sell                                                               
authentic  state park  merchandise  to  retailers thus  providing                                                               
opportunity for  private businesses while generating  revenue for                                                               
the  state.  Currently,  he  could   find  only  one  source  for                                                               
purchasing state park merchandise and  it's on line. One can pick                                                               
any state  park in Alaska  and are able  to buy a  T-shirt, sweat                                                               
shirt, hat, whatever,  and the state receives no  funds from that                                                               
enterprise.                                                                                                                     
                                                                                                                                
He said  with this  legislation that  Alaskans who  buy authentic                                                               
Alaska  state  park merchandise  could  be  confident that  their                                                               
purchases would benefit the state parks they care about.                                                                        
                                                                                                                                
4:01:26 PM                                                                                                                    
MR. ELLIS related that four years  ago, they just had completed a                                                               
40-year celebration  of Alaska  state parks and  had a  number of                                                               
beautiful photos in  a photo contest. He thought  what great note                                                               
cards they  would be  and put  eight of the  winning photos  on a                                                               
blank  notecard along  with  the name  of  the photographer,  the                                                               
location,  and technical  information.  It was  put  into a  nice                                                               
package that  could be  sold. His  intent was  to charge  $15 for                                                               
what cost  them $5.28  to create  and it was  going to  go toward                                                               
operations. Unfortunately, current statutes  say that parks can't                                                               
sell  anything -  camp fees,  fire wood,  whatever -  for profit.                                                               
That was  the beginning  of his  starting to  look at  what other                                                               
states  do. He  said that  39 other  states have  some type  of a                                                               
merchandising program; South Carolina has the most successful.                                                                  
                                                                                                                                
SENATOR  COSTELLO said  she remembered  this issue  from previous                                                               
legislatures  and asked  if  raising park  fees  needs a  statute                                                               
change.                                                                                                                         
                                                                                                                                
MR.   ELLIS  answered   yes,   because   AS  41.21.026(a)   lists                                                               
informational,  educational  and  promotional purposes.  It  gets                                                               
wrapped up with fire wood and  other things that can only be sold                                                               
for cost.                                                                                                                       
                                                                                                                                
SENATOR  STOLTZE asked  if Alaska  has a  patent or  trademark on                                                               
these logos.                                                                                                                    
                                                                                                                                
MR. ELLIS answered  no, but a patch saying  "official gear" could                                                               
be put on with the Alaska  state park logo and retailers could be                                                               
urged  to put  a sticker  of support  for Alaska  state parks  in                                                               
their windows. He can't get a  copyright on it, but he is working                                                               
with people on using the Alaska grown symbol.                                                                                   
                                                                                                                                
SENATOR STOLTZE mentioned that the  DNR and the Department of Law                                                               
(DOL) could give  him a lot of insight on  the issue of patenting                                                               
that would be useful to have.                                                                                                   
                                                                                                                                
SENATOR MICCICHE  said he thought selling  authentic Alaskan wear                                                               
would be  a good  idea. He  asked where  the $350,000  would come                                                               
from to initiate the program and what it would be used for.                                                                     
                                                                                                                                
MR. ELLIS  answered the  $50,000 is  a one-time  capital request.                                                               
The $350,000  would the  ability to receive  up to  $350,000 from                                                               
the merchandise.  If this goes forward,  he wanted to do  it on a                                                               
very  measured  basis starting  with  creating  $50,000 worth  of                                                               
product,  selling it,  looking at  the return,  and investing  it                                                               
again the  following year until they  get to a point  of actually                                                               
having enough volume to make a significant profit.                                                                              
                                                                                                                                
SENATOR  MICCICHE asked  if he  plans on  changing revenues  from                                                               
FY16 to FY21 on the fiscal note.                                                                                                
                                                                                                                                
MR. ELLIS answered no.                                                                                                          
                                                                                                                                
4:07:21 PM                                                                                                                    
SENATOR WIELECHOWSKI asked what section 3 is repealing.                                                                         
                                                                                                                                
MR. ELLIS answered that it  basically deletes language saying the                                                               
state can charge the  cost of what the product is,  but not for a                                                               
profit.                                                                                                                         
                                                                                                                                
SENATOR  STEDMAN said  he had  talked to  Mr. Ellis  earlier this                                                               
year  about the  budgets  in trying  to deal  with  the parks  in                                                               
Sitka, one of  which is where the Russians  and Americans changed                                                               
the flag.  Quite a few people  access it and the  state should be                                                               
able  to charge  a  couple dollars  to help  offset  the cost  of                                                               
running  the parks.  But maybe  they should  consider outsourcing                                                               
the merchandising  program and take  some sort of royalty  off of                                                               
it.  People  who are  in  the  business  of selling  T-shirts  or                                                               
popcorn are  probably better  at it  than the  well-meaning folks                                                               
that aren't  actually in that  type of business. The  state could                                                               
just license the product and collect  the check and not stick its                                                               
neck out too far.                                                                                                               
                                                                                                                                
MR.  ELLIS responded  that some  states have  that model,  but he                                                               
looked at the states that  generated the highest level of revenue                                                               
above the  cost of the program  and that was South  Carolina that                                                               
is doing it themselves. But he was not opposed to that approach.                                                                
                                                                                                                                
SENATOR STEDMAN said  he saw his point, but  state agencies don't                                                               
have  that great  a  history of  getting  through their  overhead                                                               
burden. But he supported the bill and the concept.                                                                              
                                                                                                                                
4:12:42 PM                                                                                                                    
SENATOR STOLTZE  concurred with Senator  Stedman, but  added that                                                               
Alaska doesn't  have a trademark  or a patent and  some companies                                                               
are  already  making these  types  of  products. All  Alaska  can                                                               
really sell  is an  official sanction,  which would  have limited                                                               
value if it gets too expensive.                                                                                                 
                                                                                                                                
4:14:28 PM                                                                                                                    
SENATOR WIELECHOWSKI also  wondered what the state  really has to                                                               
sell if  it doesn't have  a trademark or  a patent. He  thought a                                                               
lot of  people would  want to  buy an official  T-shit or  hat or                                                               
something knowing  that a big chunk  of it is going  to the state                                                               
park system.  Going to  a private model  would be  preferable but                                                               
the state doesn't have anything to sell.                                                                                        
                                                                                                                                
MR.  ELLIS responded  that he  is exploring  all options.  He had                                                               
conversations with Princess Lodge that  wants to sell these items                                                               
in their  gift shops,  because they want  to promote  and support                                                               
Alaska's parks.  So, he  believes there  are merchants  out there                                                               
that would be interested. Totem Bite is another example.                                                                        
                                                                                                                                
He didn't  expect to make as  much money as South  Carolina does,                                                               
because  the programs  are  different,  but it  is  the start  of                                                               
looking at other possible revenue  generating areas. Just raising                                                               
fees is not a sustainable model.                                                                                                
                                                                                                                                
4:19:20 PM                                                                                                                    
SENATOR STEDMAN asked him to explain what the Totem Bite is.                                                                    
                                                                                                                                
MR. ELLIS replied  that Totem Bite is a state  historical park in                                                               
Ketchikan that has  hundreds of thousands of  visitors each year.                                                               
It is  a replica of a  totem village that Totem  Trading Company,                                                               
Inc., has next door to it, a museum that is second to none.                                                                     
                                                                                                                                
SENATOR  MICCICHE agreed  that there  is a  market for  gear, but                                                               
said  the  division  already  has ability  in  existing  law  for                                                               
competitive and  exclusive commercial  use permits. Even  if they                                                               
used kiosks in the most popular  places, they wouldn't have to be                                                               
run  by park  employees. They  have  the option  right now  under                                                               
existing law for  someone coming in and having such  a thing with                                                               
a portion of the proceeds going to the Park Service.                                                                            
                                                                                                                                
MR. ELLIS  answered if  there is  a product,  yes, but  he didn't                                                               
know of an Alaskan state product being sold in the state.                                                                       
                                                                                                                                
SENATOR WIELECHOWSKI wondered  if the state is  violating law now                                                               
by selling cabins  referencing deleting "in a park  unit" on page                                                               
1,  line  6, and  he  thought  it would  be  a  good idea  to  do                                                               
something  about that.  He asked  if  there could  be some  other                                                               
unintended impacts coming from that deletion.                                                                                   
                                                                                                                                
MR. ELLIS said  he had worked with the Department  of Law on that                                                               
and  didn't always  understand legal  language, but  currently if                                                               
one wants to reserve  a public use cabin, it is  done on line; it                                                               
is  not done  in a  unit.  If one  goes to  a public  information                                                               
center and purchases an annual parking  pass, that is not done in                                                               
a  unit. This  language just  tries  to clarify  what is  already                                                               
being done.                                                                                                                     
                                                                                                                                
SENATOR COGHILL said  this needs to be passed,  because the state                                                               
is already  violating law and  asked what assurances he  can give                                                               
if  this proceeds  forward, that  it gets  reviewed so  the state                                                               
"doesn't  get tangled  up in  a lawsuit."  He liked  the idea  of                                                               
merchandising things and having it plowed back into the parks.                                                                  
                                                                                                                                
MR. ELLIS gave him his personal  assurance that he would have the                                                               
Department  of  Law  look  into  it. The  model  he  used,  South                                                               
Carolina,  has a  three-legged stool:  they  sell merchandise  in                                                               
their units most of which have  a gift shop; Alaska doesn't. They                                                               
sell them  on line and  they sell  them in retail.  Obviously, in                                                               
the park and on  line, where the State of Alaska  is using it, it                                                               
would be assured of the return  on the profit. He is concerned in                                                               
going with on  line and in the  units that the state  would be in                                                               
competition with  the private  sector even  though they  would be                                                               
giving the  opportunity for  the private  sector to  purchase the                                                               
product at wholesale.                                                                                                           
                                                                                                                                
4:27:09 PM                                                                                                                    
SENATOR COGHILL said on line would  be the best place because his                                                               
area doesn't even have kiosks.                                                                                                  
                                                                                                                                
MR.  ELLIS agreed  that kiosks  would not  be cost  effective and                                                               
that the best bet would be  to work with lodges like the Princess                                                               
Lodge that has a large volume of people coming through it.                                                                      
                                                                                                                                
CHAIR GIESSEL  said the National  Park Service in Kotzebue  has a                                                               
visitor center that sells merchandise and  she sees that in a lot                                                               
of other states, as well.                                                                                                       
                                                                                                                                
SENATOR STOLTZE  said the federal government  has concessionaires                                                               
at the  major national parks. He  asked if the division  needed a                                                               
broader authority  so that  conservation minded  families wanting                                                               
to endow  a cabin as a  friend of the  parks could be able  to do                                                               
that.                                                                                                                           
                                                                                                                                
MR.  ELLIS answered  that they  do  have that  authority now.  It                                                               
comes through  a donation  from a  family that  says it  wants to                                                               
have it applied to a specific area or parks in general.                                                                         
                                                                                                                                
4:30:26 PM                                                                                                                    
SENATOR WIELECHOWSKI said  he wanted to hear  from the Department                                                               
of Law if on line fees are illegal.                                                                                             
                                                                                                                                
MR. ELLIS replied  he hadn't talked to them about  that, but will                                                               
have an answer back through the chair.                                                                                          
                                                                                                                                
SENATOR WIELECHOWSKI said  he thought they likely  needed to pass                                                               
something as quick as possible.                                                                                                 
                                                                                                                                
CHAIR GIESSEL agreed  and said it would be helpful  to know about                                                               
the  logo  trademark issue.  She  asked  Mr.  Ellis to  get  that                                                               
information. She held SB 101 in committee.                                                                                      
                                                                                                                                
         SB  50-AIDEA: BONDS;PROGRAMS;LOANS;LNG PROJECT                                                                     
                                                                                                                                
4:32:38 PM                                                                                                                    
CHAIR  GIESSEL announced  consideration of  SB 50.  [CSSB 50(NRG)                                                               
was before the committee.]                                                                                                      
                                                                                                                                
4:32:59 PM                                                                                                                    
At ease from 4:32 to 4:34 p.m.                                                                                                  
                                                                                                                                
4:34:23 PM                                                                                                                    
FRED  PARADY,   Deputy  Commissioner,  Department   of  Commerce,                                                               
Community  and Economic  Development (DCCED),  Anchorage, Alaska,                                                               
said he had an abbreviated set  of slides to refresh people on SB                                                               
50.                                                                                                                             
                                                                                                                                
NICK  SZYMONIAK,   Energy  Infrastructure   Development  Officer,                                                               
Alaska  Industrial  Development  and  Export  Authority  (AIDEA),                                                               
Anchorage, Alaska, introduced himself.                                                                                          
                                                                                                                                
MR. PARADY  said the goals  of the Interior Energy  Project (IEP)                                                               
are straightforward,  to supply  natural gas  to the  Interior at                                                               
the lowest possible cost to as  many customers as possible and as                                                               
soon as possible.                                                                                                               
                                                                                                                                
Investments in  the IEP  complement the  eventual sources  of gas                                                               
supply  from a  natural gas  pipeline which  everyone hopes  will                                                               
come  forward. A  key  goal,  he said,  is  the  lowering of  the                                                               
particulate matter  (PM) 2.5 in  the non-attainment areas  of the                                                               
Interior,  a  serious  health  issue  that  the  legislature  has                                                               
directed to address through previous SB 23.                                                                                     
                                                                                                                                
MR.  PARADY said  the  current status  of the  IEP  is that  they                                                               
diligently  pursued  development  of   a  North  Slope  liquefied                                                               
natural  gas supply  agreement  through  a concession  agreement.                                                               
That  agreement did  not work  out. AIDEA  and the  Alaska Energy                                                               
Authority  (AEA) are  now  evaluating  infrastructure to  develop                                                               
natural gas from  Cook Inlet and are seeking  authority to source                                                               
gas from Cook Inlet.                                                                                                            
                                                                                                                                
He  said AIDEA  is financing  the build  out of  the natural  gas                                                               
distribution  systems  in  Fairbanks   and  North  Pole.  It  has                                                               
allocated a $15  million loan to Fairbanks Natural  Gas (FNG) and                                                               
a $37.78  million loan  to the Interior  Gas Utilities  (IGU) for                                                               
those distribution systems - a total of $52.78 million.                                                                         
                                                                                                                                
4:38:22 PM                                                                                                                    
MR. PARADY  revisited the  reason the  North Slope  project under                                                               
the concession agreement  did not proceed was because  it did not                                                               
pass AIDEA's  due diligence process  and receive  board approval.                                                               
That is  why they are now  looking at sourcing gas  from the Cook                                                               
Inlet.                                                                                                                          
                                                                                                                                
CHAIR GIESSEL asked him to explain the chart he was referencing.                                                                
                                                                                                                                
4:38:58 PM                                                                                                                    
MR. PARADY  said AIDEA takes  its loan portfolio  very seriously.                                                               
Phase 1 is the project  suitability assessment which consists of:                                                               
proposal information,  sponsor information, estimated cost  and a                                                               
timeline.  The  AIDEA process  that  would  follow those  project                                                               
sponsor  submittals   answers  the  following:  Is   the  project                                                               
consistent with AIDEA's initiatives? Is  it feasible? What is the                                                               
proponent's  experience  and  capability?  Are  they  capable  of                                                               
delivering  what they  are  proposing? And,  is  AIDEA the  right                                                               
source for financing?                                                                                                           
                                                                                                                                
The  output is  a suitability  report; the  decision-making would                                                               
come from a project evaluation committee.                                                                                       
                                                                                                                                
Phase 2  has the  full-blown feasibility  analysis, which  is the                                                               
business  and financing  plan, the  schedule,  its execution  and                                                               
development plan.  The AIDEA  process is  the asking  whether the                                                               
building  and  financing  plan is  attainable.  Is  there  public                                                               
support for  it? What is  the timing  and status of  the project?                                                               
What are  the risks? The output  of that piece of  due diligence,                                                               
which comes  from the Investment Committee,  is the reimbursement                                                               
agreement and term sheet and that goes to the AIDEA board.                                                                      
                                                                                                                                
Phase 3 asks for the  deal's structuring and due diligence, which                                                               
is the final execution plans and final financing plans.                                                                         
                                                                                                                                
Phase 4 is the finalization  and closing. The North Slope project                                                               
did not reach this finalization and closing phase.                                                                              
                                                                                                                                
MR.  PARADY said  the concession  agreement for  the North  Slope                                                               
project  with  MWH,  was  a long  involved  process.  The  equity                                                               
partner  in  that  agreement  offered  $80  million  for  private                                                               
capital  through  North Leaf,  but  the  details surrounding  the                                                               
liquefaction  plant  soared  to $280  million,  the  deliverables                                                               
weren't there in terms of timing and  so it did not reach phase 4                                                               
finalization   and   closing.   The  concession   agreement   was                                                               
terminated prior to phase 4.                                                                                                    
                                                                                                                                
4:41:23 PM                                                                                                                    
MR. PARADY provided a quick  snap shot of project comparisons. He                                                               
said the  natural gas supply for  Cook Inlet is not  certain, but                                                               
indications  are  positive.  On  the North  Slope  there  was  an                                                               
abundant  supply at  low cost  and other  contracts in  place for                                                               
some  of it,  but designing  and  constructing an  LNG plant  for                                                               
North Slope conditions is expensive.  That will be cheaper coming                                                               
from  the south  as that  has lower  trucking costs  and a  large                                                               
trailer potential. He  noted the declaration of  emergency on the                                                               
Dalton Highway and if the project  were connected to an LNG plant                                                               
on the  North Slope, not one  single truck would be  moving for a                                                               
substantial period of days. If that  were to occur in deep winter                                                               
conditions in  Fairbanks, an ultimate  storage facility  would be                                                               
needed to assure reliable supply.                                                                                               
                                                                                                                                
4:42:43 PM                                                                                                                    
Trucking  is more  expensive  from  the North  Slope,  but it  is                                                               
feasible. He  said the  Dalton Highway risk  which is  a somewhat                                                               
new development and that storage  and distribution is essentially                                                               
the same in either project.                                                                                                     
                                                                                                                                
4:43:32 PM                                                                                                                    
MR.  SZYMONIAK took  over  the presentation.  He  noted that  the                                                               
supply of natural  gas is not certain and  being explored through                                                               
a  competitive  commercial process.  He  exhibited  a slide  that                                                               
indicated an  80 bcf of  Interior gas  demand for 10  years. That                                                               
compares with  about 1 tcf  of existing natural gas  reserves not                                                               
including undiscovered fields or  recently discovered fields like                                                               
Kitchen  Lights   or  Cosmo,  which   are  anticipated   to  have                                                               
significant,  producible commercial  volumes  of  natural gas.  A                                                               
scale  of  the   last  10  years  of  LNG  exports   out  of  the                                                               
ConocoPhillips LNG  plant indicated  exports approaching  400 bcf                                                               
in  the last  10  years, which  is vastly  greater  than what  is                                                               
expected to go to Interior Alaska  over the next 10 years. If the                                                               
Agrium Plant were restarted, it  would mean about 30 bcf/year. At                                                               
full build  out the Interior demand  is expected to be  about 9.5                                                               
bcf. This includes  both natural gas utilities as  well as Golden                                                               
Valley Electric Association  (GVEA) - and it would  take a number                                                               
of  years  to complete  very  ambitious  customer conversions  to                                                               
natural gas.                                                                                                                    
                                                                                                                                
4:45:14 PM                                                                                                                    
SENATOR COGHILL  said he couldn't  anticipate this  project going                                                               
forward more, but  there was the question of gas  supply a couple                                                               
of years ago and asked why this gas concept is different now.                                                                   
                                                                                                                                
MR. SZYMONIAK explained that AIDEA  is a market driven authority;                                                               
they respond  to the market  and support the private  sector. One                                                               
of the  big indications that  Cook Inlet  may be a  viable source                                                               
was  that the  private sector  -  Hilcorp and  Westpac -  started                                                               
proposing solutions to bring natural  gas for LNG from there into                                                               
the  Interior market.  In addition,  Cook  Inlet gas  discoveries                                                               
that were in large part due to  the tax incentives as well as the                                                               
two  jack  up  rigs,  one  of which  AIDEA  participated  in  the                                                               
financing of, are  significant. So they have  been in preliminary                                                               
discussions  with producers  and Cook  Inlet utilities  to get  a                                                               
sense  of where  the market  is heading.  There is  reason to  be                                                               
optimistic that  gas could  be available.  Before they  commit to                                                               
Cook  Inlet  that  will  all   be  vetted  through  a  commercial                                                               
solicitation  to determine  what  gas is  available  and if  it's                                                               
available at  a level of  security that is adequate  for Interior                                                               
utilities.                                                                                                                      
                                                                                                                                
MR. PARADY offered that the gas  supply team - DCCED, AIDEA, AEA,                                                               
and DNR  - is developing  the best information to  understand the                                                               
Cook Inlet gas  situation.  The question they have  been asked is                                                               
how they can  be confident with the gas supply  today in relation                                                               
to the  brown-outs people worried  about three years ago  and the                                                               
answer is  a function  of Cook Inlet  Natural Gas  Storage Alaska                                                               
(CINGSA) that has improved gas  storage, a function of incentives                                                               
that have been operating in Cook  Inlet. It is also a function of                                                               
the success  of independent  operators that  have come  into play                                                               
beginning  with  Hilcorp,  which acquired  Marathon  and  Chevron                                                               
assets.  There have  been  75  new oil  and  gas exploration  and                                                               
development wells drilled  since 2009; 36 have  been completed as                                                               
gas wells,  an average of  7.2 new wells  a year. The  Kenai Loop                                                               
gas field was  discovered in June 2011  with sustained production                                                               
beginning in January  2012. Gas reserve additions  have come from                                                               
production enhancements,  compression additions,  new completions                                                               
of  high  probability  pay  intervals,  and  new  completions  of                                                               
potential pay intervals. And then  the DNR analysis to this point                                                               
has   excluded   the   Kitchen  Lights   and   Cosmopolitan   gas                                                               
discoveries, both  of which  are in development  but are  not yet                                                               
producing.                                                                                                                      
                                                                                                                                
So, one  of the  questions to  be ascertained  in the  gas supply                                                               
agreement will  be essentially the  deliverability of gas  to the                                                               
pipe  for the  Fairbanks  demand and  sustainability  of the  gas                                                               
reserves.  Mr. Parady  said  the major  utility  operator in  the                                                               
Anchorage  area, Enstar,  has gas  supply under  contract through                                                               
2018 and is looking to  place contracts for their forward demand.                                                               
Gas supply will  be put under contract for  Fairbanks through the                                                               
utilities - FNG,  IGU, and GVEA -  for a 5-10 year  period. It is                                                               
worth contemplating that this project is  viewed as a bridge to a                                                               
future gas line, but as  the uncertainties are weighed, decisions                                                               
will have to be made about  the longevity of terms they seek from                                                               
the  market  in placing  the  contracts.  Those will  be  private                                                               
sector decisions rather than AIDEA decisions.                                                                                   
                                                                                                                                
SENATOR COGHILL said IGU is not private sector.                                                                                 
                                                                                                                                
MR. PARADY clarified  that a better way to say  that is that they                                                               
are non-AIDEA.                                                                                                                  
                                                                                                                                
4:51:04 PM                                                                                                                    
MR. SZYMONIAK  said slides 7  & 8 show  the project plan  for the                                                               
North Slope that has been pursued  for the last two years and the                                                               
one after  showed the  Cook Inlet  alternative. He  next reviewed                                                               
the  value chain  to describe  AIDEA's approach  to allowing  the                                                               
private parties to put together the financing.                                                                                  
                                                                                                                                
For the  North Slope LNG  project, two of the  Interior utilities                                                               
came to  the project with  executed natural gas  supply contracts                                                               
in hand. AIDEA  anticipated using one of  those contracts through                                                               
project  development. For  LNG production,  AIDEA's  plan was  to                                                               
partner  with   the  private  developer.  They   went  through  a                                                               
competitive   process  and   selected  MWH   and  then   spent  a                                                               
significant  period  of  time  advancing  the  project  with  it.                                                               
Legally, that resulted  in a concession agreement  on which AIDEA                                                               
would own the  LNG plant and MWH's private  investor they brought                                                               
to  the project  would  finance, operate  and  construct the  LNG                                                               
plant.  MWH   would  lead  the   process  under   the  concession                                                               
agreement;  they were  responsible for  getting the  construction                                                               
contract,  the  operating  contract,   and  signing  the  offtake                                                               
agreements with the utilities. Once  the concession agreement was                                                               
signed,  AIDEA  took  the  backseat   and  hoped  to  assist  and                                                               
facilitate.  Ultimately  the costs  came  in  too high  for  this                                                               
project and the contracts with  the utilities were not signed and                                                               
it did not make it through AIDEA's due diligence process.                                                                       
                                                                                                                                
4:52:43 PM                                                                                                                    
AIDEA explored  the trucking component and  discussed owning some                                                               
trailers with the  utilities, but at no point did  AIDEA have any                                                               
interest in operating the trucking  operation. They expected that                                                               
component to be resolved through a competitive private market.                                                                  
                                                                                                                                
The three  Interior Utilities -  Fairbanks Natural  Gas, Interior                                                               
Gas  Utility  and Golden  Valley  Electric  - cooperated  on  LNG                                                               
storage  and  regasification  and  worked together  to  plan  the                                                               
entire value chain.                                                                                                             
                                                                                                                                
4:53:37 PM                                                                                                                    
MR. SZYMONIAK  said the  Cook Inlet  LNG alternative  is visually                                                               
much  the same  project with  the big  difference being  that the                                                               
Cook  Inlet alternative  has a  gas  supply in  hand. AIDEA  will                                                               
evaluate the proposed  projects and determine which  ones are the                                                               
most  promising,  move  through   the  competitive  process  into                                                               
negotiation and then  determine which one is the  best partner to                                                               
finance.                                                                                                                        
                                                                                                                                
The utilities  will be engaged  the entire way through,  he said.                                                               
While  AIDEA is  working with  DCCED  to explore  and secure  gas                                                               
supply and  go through  the RFP process  for liquefaction,  it is                                                               
known that  all the way through  that it's not going  to be AIDEA                                                               
that  owns  or   even  signs  the  contracts   with  the  private                                                               
developers.  It  will  be  the  utilities.  AIDEA  is  playing  a                                                               
facilitating role  to aggregate  and rationalize the  demand from                                                               
the  three Interior  utilities and  come up  with one  commercial                                                               
approach as opposed  to forcing the private developers  to try to                                                               
negotiate   three  individual   gas  supply   and  LNG   capacity                                                               
agreements with three different utilities.                                                                                      
                                                                                                                                
4:55:25 PM                                                                                                                    
MR.  SZYMONIAK  moved to  the  transportation  pieces saying  the                                                               
options were  trucking or railroad  and at this point  their plan                                                               
is to  use trucks.  Just like  the North  Slope, they  expect the                                                               
trucking cost  to be  much lower  than off  the North  Slope, but                                                               
they are  working with  the Railroad  to determine  if rail  is a                                                               
cost  effective  alternative.  He   noted  that  SB  50  includes                                                               
provision  for AIDEA  to finance  a small  diameter pipeline.  If                                                               
that is  the case it will  replace the LNG production  as well as                                                               
the transportation.  The mechanism  for that  to happen  would be                                                               
through this competitive RFP process  that is exclusively open to                                                               
pipeline developers.  If a developer  can demonstrate that  it is                                                               
the preferred means to transport  natural gas to Fairbanks, AIDEA                                                               
will work  with them  and try  to come  to a  financing agreement                                                               
where  the private  developer builds  and  operates the  pipeline                                                               
with some  AIDEA financing to achieve  the goals of the  IEP. The                                                               
limit of that pipeline is 12 inches or less.                                                                                    
                                                                                                                                
SENATOR MICCICHE  said it  not only cuts  out the  LNG production                                                               
and transportation, but  it also cuts out the  storage and re-gas                                                               
facilities  unless  there  was a  supplemental  system  with  the                                                               
existing liquefaction capacity.                                                                                                 
                                                                                                                                
MR. SZYMONIAK said that was correct.                                                                                            
                                                                                                                                
CHAIR GIESSEL said AIDEA and  DCCED are state government and were                                                               
also working  together in competitive solicitation  for contracts                                                               
and  she  was  uncomfortable  with   government  stepping  in  to                                                               
contract negotiations that should be done by the utilities.                                                                     
                                                                                                                                
MR. PARADY said  that AIDEA's role is to  facilitate that ongoing                                                               
process  with the  utilities. Looking  at the  history of  energy                                                               
supply issues  in the Interior,  it is arguable that  the private                                                               
market has not succeeded in  supplying what amounts to relatively                                                               
small levels  of demand. One  of AIDEA's successes to  this point                                                               
with this project  is the Pentax acquisition, which  is under due                                                               
diligence review  now, where there  is an opportunity  to combine                                                               
the  two utilities  - FNG  and IGU  - and  not have  two separate                                                               
entities   operating,  not   have  two   separate  administrative                                                               
structures,  two different  metering systems,  and two  different                                                               
warehouse  systems. The  market, itself,  is small  and combining                                                               
the two entities is a success.                                                                                                  
                                                                                                                                
CHAIR GIESSEL noted  that the state gives  credits and incentives                                                               
to develop  the gas supply in  Cook Inlet and now  it is stepping                                                               
in and  negotiating contracts with  those same folks.  It doesn't                                                               
sound too free "market-ish."                                                                                                    
                                                                                                                                
MR. PARADY responded  that, however it sounds to  her, that AIDEA                                                               
is applying  its analytical  skills and  its investment  tools to                                                               
support  the market.  It  is  not trying  to  bypass the  private                                                               
sector;  it  is  trying  to  find   a  way  to  help  the  system                                                               
rationalize itself.                                                                                                             
                                                                                                                                
4:59:28 PM                                                                                                                    
SENATOR STOLTZE  said he was  wrapped around the HB  132 argument                                                               
and asked how a competing gas line fits in.                                                                                     
                                                                                                                                
CHAIR GIESSEL  said time  has run  out and  others still  want to                                                               
testify so she would continue the  discussion of SB 50 at a later                                                               
time.                                                                                                                           
                                                                                                                                
5:00:40 PM                                                                                                                    
CHAIR GIESSEL  adjourned the Senate  Resources Committee  at 5:00                                                               
p.m.                                                                                                                            
                                                                                                                                

Document Name Date/Time Subjects
HJR18 Ver. H.PDF SRES 4/10/2015 3:30:00 PM
HJR 18
HJR18 Ver. E.PDF SRES 4/10/2015 3:30:00 PM
HJR 18
HJR18 Explaination of Changes.pdf SRES 4/10/2015 3:30:00 PM
HJR 18
HJR18 Sponsor Statement.pdf SRES 4/10/2015 3:30:00 PM
HJR 18
HJR18 Fiscal Note.PDF SRES 4/10/2015 3:30:00 PM
HJR 18
HJR18 Supporting Documents -NPCA National Monuments List.pdf SRES 4/10/2015 3:30:00 PM
HJR 18
HJR18 Supporting Documents-ADN Article.pdf SRES 4/10/2015 3:30:00 PM
HJR 18
HJR18 Supporting Documents-Deseret News Editorial.pdf SRES 4/10/2015 3:30:00 PM
HJR 18
HJR18 Supporting Documents-KUCB News Article.pdf SRES 4/10/2015 3:30:00 PM
HJR 18
HJR18 Supporting Documents-Legislation and Policy Article.pdf SRES 4/10/2015 3:30:00 PM
HJR 18
HJR18 Supporting Documents-NPS Antiquities Act 1906.pdf SRES 4/10/2015 3:30:00 PM
HJR 18
HJR18 Supporting Documents-S. 437.pdf SRES 4/10/2015 3:30:00 PM
HJR 18
HJR18 Supporting Documents-S.437 News Release.pdf SRES 4/10/2015 3:30:00 PM
HJR 18
SB 101.pdf SRES 4/10/2015 3:30:00 PM
SB 101
SB 101 Transmittal Letter.pdf SRES 4/10/2015 3:30:00 PM
SB 101
SB 101 Fiscal Note.pdf SRES 4/10/2015 3:30:00 PM
SB 101
SB 101 Briefing Paper.pdf SRES 4/10/2015 3:30:00 PM
SB 101
SB50 Transmittal Letter.pdf SRES 4/10/2015 3:30:00 PM
STRA 3/10/2015 3:30:00 PM
SB 50
SB50 Fact Sheet.pdf SRES 4/10/2015 3:30:00 PM
STRA 3/10/2015 3:30:00 PM
SB 50
SB50 Fiscal Note-DCCED-AIDEA-Zero-2-11-15.pdf SRES 4/10/2015 3:30:00 PM
STRA 3/10/2015 3:30:00 PM
SB 50
SB50 Sectional Analysis.pdf SRES 4/10/2015 3:30:00 PM
STRA 3/10/2015 3:30:00 PM
SB 50
FBX North Star Borough R2015-08.pdf SNRG 3/10/2015 3:30:00 PM
SRES 4/10/2015 3:30:00 PM
SB 50
Fairbanks Chamber Letter of Support for HB 105 & SB 50.pdf SNRG 3/10/2015 3:30:00 PM
SRES 4/10/2015 3:30:00 PM
HB 105
SB 50
SB50 ver A.pdf SNRG 3/10/2015 3:30:00 PM
SRES 4/10/2015 3:30:00 PM
SB 50
SB50 Fact Sheet.pdf SNRG 3/10/2015 3:30:00 PM
SRES 4/10/2015 3:30:00 PM
SB 50
SB 50 CS NRG version W dated 3-26-15.PDF SNRG 3/26/2015 3:30:00 PM
SRES 4/10/2015 3:30:00 PM
SB 50
SB50 Summary of Changes ver A to ver W.pdf SRES 3/30/2015 3:30:00 PM
SRES 4/3/2015 3:30:00 PM
SRES 4/10/2015 3:30:00 PM
SB 50
SB50 Supporting Documents-Furie LLC letter 3-2015.pdf SRES 3/30/2015 3:30:00 PM
SRES 4/3/2015 3:30:00 PM
SRES 4/10/2015 3:30:00 PM
SB 50
SB 50 Letter of Support Merrick Peirce.pdf SRES 3/30/2015 3:30:00 PM
SRES 4/3/2015 3:30:00 PM
SRES 4/10/2015 3:30:00 PM
SB 50
SB50-AIDEA PowerPoint.pdf SRES 4/10/2015 3:30:00 PM
SB 50
CSHJR18 Explanation of Changes Version E to N.pdf SRES 4/10/2015 3:30:00 PM
SB 50 - Coghill Amendment 29-GS1019 W.2.pdf SRES 4/10/2015 3:30:00 PM
SB 50
CSHJR18-Version N.pdf SRES 4/10/2015 3:30:00 PM
HJR 18