03/29/2004 03:19 PM House FIN

HOUSE BILL NO. 417                                                                                                            
                                                                                                                                
     An Act amending the definition of 'project' in the Act                                                                     
     establishing the Alaska Natural Gas Development                                                                            
     Authority; and providing for an effective date.                                                                            
                                                                                                                                
REPRESENTATIVE  MIKE CHENAULT  explained that  HB 417  amends                                                                   
the  definition of  "project" to  include all  options for  a                                                                   
terminus  for  the  Alaska  natural   gas  pipeline,  and  it                                                                   
specifically  identifies Cook  Inlet  as one  terminus.   The                                                                   
voters  gave the  Alaska  Natural Gas  Development  Authority                                                                   
(ANGDA) the power to study the  Prudhoe Bay to Prince William                                                                   
Sound  route  with  a  spur  run   to  the  Southcentral  gas                                                                   
distribution  grid.  This  bill  would allow  ANGDA  to  also                                                                   
consider  Cook  Inlet  as  a   potential  and  possibly  more                                                                   
advantageous terminus.                                                                                                          
                                                                                                                                
Representative  Fate noted  that 3  months ago  ANGDA made  a                                                                   
unanimous  decision to expand  its purview  and do  what this                                                                   
bill  addresses,  and  he  asked  if  HB  417  is  necessary.                                                                   
Representative  Chenault replied  that he  couldn't speak  to                                                                   
the Board's  decision. He  argued for  not limiting  ANGDA to                                                                   
one option but  allowing it to look at all viable  options by                                                                   
June  30.  Representative  Fate  expressed  support  for  the                                                                   
concept.                                                                                                                        
                                                                                                                                
Representative Joule thought that  the title limits the scope                                                                   
to ANGDA  and not  the Stranded Gas  Act. He also  questioned                                                                   
the  impact of  this  language on  proposals  that have  been                                                                   
submitted.  Representative  Chenault clarified  that  ANGDA's                                                                   
only current authority is to study  a Prudhoe Bay/North Slope                                                                   
route  to  Prince William  Sound  with  a  spur line  to  the                                                                   
Southcentral gas distribution  grid.  He reiterated that this                                                                   
bill  amends  their authority  to  include  Cook Inlet  as  a                                                                   
viable option.                                                                                                                  
                                                                                                                                
Co-Chair Harris expressed support  for providing gas where it                                                                   
makes  the  most  economic  sense  for  the  benefit  of  all                                                                   
Alaskans.  The  initiative  authorizing  ANGDA  was  project-                                                                   
specific,  and   this  bill   would  give  ANGDA   additional                                                                   
authority. He pointed out that  major industries on the Kenai                                                                   
Peninsula depend  on natural gas and he spoke  for protection                                                                   
of those jobs.                                                                                                                  
                                                                                                                                
HAROLD  C. HEINZE,  CHIEF EXECUTIVE  OFFICER, ALASKA  NATURAL                                                                   
GAS DEVELOPMENT AUTHORITY, VIA TELECONFERENCE, ANCHORAGE,                                                                       
explained that the Board considered this and other                                                                              
legislation changing the scope of ANGDA.  He clarified that                                                                     
this bill does not relate to the  Stranded Gas Act, and ANGDA                                                                   
itself is outside the limits of the Stranded Gas Act.  He                                                                       
made three points.  The charge for ANGDA in the initiative                                                                      
was to study the route from Prudhoe Bay to Prince William                                                                       
Sound, with a spur line from Glenallen to the Cook Inlet                                                                        
area.  The current feasibility level of study makes it                                                                          
difficult to determine the difference between any of the                                                                        
specific routes to Cook Inlet without a lot more detail                                                                         
and a lot more funding.  He urged the funding of ANGDA.                                                                         
                                                                                                                                
Mr. Heinze continued explaining that ANGDA is working on                                                                        
three projects:  the Liquefied Natural Gas (LNG) project to                                                                     
export gas, use of ANGDA's financing and tax advantage for                                                                      
the highway project, and the Cook Inlet spur line and                                                                           
utility concept to be a gas aggregate  and transporter to the                                                                   
commercial entities in that area.                                                                                               
                                                                                                                                
BOB FAVRETTO, BOARD MEMBER, ALASKA NATURAL GAS DEVELOPMENT                                                                      
AUTHORITY (ANGDA), VIA TELECONFERENCE, KENAI, spoke as a                                                                        
board member and a resident of Kenai Peninsula Borough.  He                                                                     
explained that the industries in the area have a shortfall                                                                      
of natural gas at a sustainable price for operation. He                                                                         
noted that gas projects in Alaska  are changing weekly.  This                                                                   
legislation is a companion bill  to Senator Wagoner's SB 247.                                                                   
It is an issue of timing, and he spoke for funding ANGDA to                                                                     
study alternative gas routes.  He expressed that he                                                                             
wholeheartedly supports the bill.                                                                                               
                                                                                                                                
Co-Chair Williams asked if the title is a little broad.                                                                         
Representative Chenault replied  that he didn't see a problem                                                                   
with the title and he noted that SB 247, which is moving                                                                        
through the Senate, has the same title.  He said that there                                                                     
has not been discussion of tightening the title.                                                                                
                                                                                                                              
At Ease:     3:34 P.M.                                                                                                        
Reconvene:   3:36 P.M.                                                                                                        
                                                                                                                                
Representative Chenault MOVED to report HB 417 out of                                                                           
Committee with the accompanying  fiscal note.  There being NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
HB  417  was REPORTED  out  of  Committee  with a  "do  pass"                                                                   
recommendation and with a previously  published indeterminate                                                                   
fiscal note.