CSSB 287(RES): "An Act amending the powers and duties of the Alaska Railroad Corporation related to the exercise of authority to purchase, transport, and sell natural gas produced on the North Slope for in-state use, and transferring exclusive and primary responsibility for the initiation and development of that project to that corporation; and providing for an effective date."
00 CS FOR SENATE BILL NO. 287(RES) 01 "An Act amending the powers and duties of the Alaska Railroad Corporation related to 02 the exercise of authority to purchase, transport, and sell natural gas produced on the 03 North Slope for in-state use, and transferring exclusive and primary responsibility for 04 the initiation and development of that project to that corporation; and providing for an 05 effective date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 08 to read: 09 LEGISLATIVE FINDINGS AND PURPOSE. (a) The legislature finds that 10 (1) by 2018, declining oil flow through the Trans Alaska Pipeline System will 11 seriously diminish state revenue; 12 (2) Cook Inlet natural gas reserves are depleting at a rate that could cause 13 significant short-term shortages for residential and commercial gas users in Southcentral
01 Alaska by 2013; 02 (3) a proposed natural gas pipeline to deliver North Slope gas reserves to the 03 North American domestic gas pipeline grid at a connection in central Alberta will not produce 04 revenue for the benefit of the state before 2020; 05 (4) the state's significant reserves of natural gas should be made available on a 06 priority basis in the state to enhance employment opportunities, expand the state's economy, 07 and supply a significant portion of community energy needs; 08 (5) the Alaska Natural Gas Development Authority is studying a pipeline spur, 09 aggregating in-state demand for natural gas, and facilitating delivery of natural gas and 10 natural gas liquids to Alaskans; and 11 (6) in light of competing demands for future uses of the state's North Slope 12 natural gas reserves, an aggressive effort involving planning, permitting, and coordination of 13 information sharing, of necessary agreements and commitments, and commercial negotiations 14 among interested parties is necessary for completion of construction of an in-state natural gas 15 pipeline that will provide significant direct benefit to the people of the state at the earliest 16 possible date. 17 (b) It is the purpose of this Act 18 (1) to give general direction to the Alaska Railroad Corporation, an agency 19 that enjoys express authority to acquire, construct, improve, maintain, equip, and operate a 20 natural gas pipeline and related facilities for the transportation of natural gas recovered from 21 the North Slope without regard to whether the facilities are or will be owned in whole or in 22 part by the corporation or located on land owned by the corporation, to plan and develop 23 construction of a high pressure in-state natural gas pipeline of appropriate diameter between 24 Alaska's North Slope and Cook Inlet sufficient to provide for the distribution of natural gas 25 for residential and commercial purposes at locations along the pipeline route; and 26 (2) to advance to the point of project sanction an in-state natural gas pipeline 27 that will provide significant direct benefit to the people of the state at the earliest possible 28 date. 29 * Sec. 2. AS 42.40.460 is amended by adding a new subsection to read: 30 (l) The provisions of AS 42.40.560(d) prevail over the provisions of this 31 section for the purpose of development of the North Slope natural gas pipeline project
01 described in that section. 02 * Sec. 3. AS 42.40.560 is amended to read: 03 Sec. 42.40.560. North Slope natural gas pipeline. The corporation may 04 provide [FINANCING] for the acquisition, construction, improvement, maintenance, 05 equipping, and operation of a natural gas pipeline and related facilities, and for the 06 financing of the pipeline project and related facilities, for the transportation of 07 natural gas recovered from the North Slope of this state without regard to whether the 08 facilities are or will be owned in whole or in part by the corporation or located on land 09 owned by the corporation. The authority provided by this section is limited to the 10 project popularly identified as the Stand-Alone Pipeline Project, or Stand-Alone 11 Project, that 12 (1) proposes to develop a gas pipeline system to transport natural 13 gas, and possibly additional natural gas liquids to markets in the Anchorage bowl 14 area, and the Kenai Peninsula, and to additional customers along the 15 transportation route; 16 (2) contemplates the commercial development of two primary 17 sources of natural gas, the Prudhoe Bay Central Gas Facility and the Gubik gas 18 field located in the northern foothills of the Brooks Range, and allows for use of 19 gas from either or both of those gas sources or from any other source of natural 20 gas; 21 (3) projects a pipeline system routing generally along the state's 22 existing transportation corridors between the North Slope and Southcentral 23 Alaska, starting from each potential gas source location, making its way to the 24 Trans Alaska Pipeline System and Dalton Highway corridor, generally 25 paralleling that corridor from the North Slope to the vicinity of Livengood, north 26 of Fairbanks, and continuing to the Cook Inlet area, using one of two routes that 27 are the existing transportation corridors between Fairbanks and Cook Inlet: the 28 Parks Highway and the Richardson and Glenn Highways; and 29 (4) is compatible but not competitive with the project described in 30 and authorized by AS 41.41 or the project described in and authorized by 31 AS 43.90.
01 * Sec. 4. AS 42.40.560 is amended by adding new subsections to read: 02 (b) In the exercise of its authority under (a) of this section for a North Slope 03 natural gas pipeline project, the corporation shall 04 (1) establish, maintain, and operate a subsidiary of the corporation to 05 perform the work described in this section; 06 (2) aggressively pursue the acquisition of all necessary federal permits 07 and authorizations essential for the development and operation of the project; 08 (3) provide monthly reports to the presiding officers of each house of 09 the legislature and to the governor on the corporation's activities relating to the 10 project; 11 (4) initiate a cost study for construction of a gas-to-liquids facility; in 12 the exercise of its authority under this paragraph, the corporation may arrange for 13 essential engineering and design work; and 14 (5) initiate efforts to identify and develop in-state markets for the 15 natural gas to be delivered by the project and, to the extent necessary to ensure the 16 long-term feasibility of the project, work to identify and develop overseas markets for 17 the gas. 18 (c) Subject to AS 36.30.015(e), the board may provide that all or any portion 19 of the project described in this section shall be subject to competitive sealed bid or 20 competitive sealed proposal procedures. 21 (d) To fulfill its obligations under this section, the corporation shall identify 22 all or a portion of a proposed natural gas pipeline transportation corridor: 23 (1) to the maximum extent possible consistent with ensuring the long- 24 term feasibility of the project, the corporation shall make reasonable efforts to locate 25 the proposed corridor between Fairbanks and the Kenai Peninsula on its land; 26 (2) notwithstanding any contrary provision of law, the Department of 27 Natural Resources shall grant the corporation a right-of-way lease under AS 38.35 for 28 the transportation corridor identified under (1) of this subsection if 29 (A) the corporation submits a complete right-of-way lease 30 application under AS 38.35.050; 31 (B) the lease application is made the subject of notice and other
01 reasonable and appropriate publication requirements under AS 38.35.070; and 02 (C) the corporation agrees to be bound by the right-of-way 03 lease covenants set out in AS 38.35.120; 04 (3) notwithstanding any contrary provision of law, a right-of-way lease 05 granted under (2) of this subsection is subject to AS 38.05, except that the best interest 06 findings requirements of AS 38.05 do not apply to a lease made under this subsection. 07 * Sec. 5. The uncodified law of the State of Alaska is amended by adding a new section to 08 read: 09 ALASKA RAILROAD CORPORATION: TRANSITIONAL PROVISIONS 10 AFFECTING OBLIGATIONS UNDER AS 42.40.560. (a) Subject to (c) of this section, in 11 discharging its obligations under AS 42.40.560(b)(2), enacted by sec. 4 of this Act, the Alaska 12 Railroad Corporation shall 13 (1) initiate permit and acquisition applications in accordance with the federal 14 permit schedule that was provided to the legislature by the Office of the Governor on or about 15 December 15, 2009; 16 (2) seek letters of intent from buyers and sellers of natural gas to ship gas 17 using the facilities of the project and, from information obtained, by February 15, 2011, 18 define the project parameters that would allow the project to be commercially viable; 19 (3) seek letters of interest from private pipeline construction and operating 20 companies to develop the project; the work under this paragraph should be initiated between 21 November 15, 2010, and shall be completed by March 15, 2011; 22 (4) prepare and submit to the governor and the presiding officer of each house 23 of the legislature, by December 15, 2010, any initial legislation necessary to advance the 24 project; 25 (5) identify or define and submit to the legislature, not later than January 15, 26 2011, the corporation's estimates of any long-lead time cost items or work tasks to achieve an 27 early start-up for the project; 28 (6) prepare a final bankable feasibility document; the work under this 29 paragraph should be initiated by July 1, 2011, and shall be completed by June 30, 2012; and 30 (7) unless otherwise provided in the monthly report required by 31 AS 42.40.560(b)(3), enacted by sec. 4 of this Act, prepare and submit a report at each of the
01 dates set out in (1) - (6) of this subsection to the governor, the speaker of the house of 02 representatives, and the president of the senate. 03 (b) The parties having responsibility for contracts, permit and acquisition 04 applications, and studies in progress on the effective date of this Act entered into by the 05 Office of the Governor or a state agency shall transfer those obligations and initiatives to the 06 Alaska Railroad Corporation. Transfer of those obligations and initiatives may not be 07 unreasonably delayed. 08 (c) The corporation shall cease its activities under this section and AS 42.40.560, as 09 amended by secs. 3 and 4 of this Act, if the corporation receives a communication that 10 (1) the governor, after setting out with particularity the reasons that support 11 the decision, has entered a finding that 12 (A) an agreement has been entered into that will result in construction 13 of the project described in AS 43.90; 14 (B) construction of the project described in this section would prevent 15 initiation and completion of the project described in AS 43.90; or 16 (C) other circumstances warrant cessation of activities under this 17 section and AS 42.40.560; 18 (2) the legislature expresses its approval of the finding of the governor made 19 under (1) of this subsection by concurrent resolution. 20 * Sec. 6. This Act takes effect July 1, 2010.