Legislature(2009 - 2010)BARNES 124
02/03/2009 03:00 PM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| HCR2|| HCR3|| HCR4|| HCR5 | |
| HCR2 | |
| HCR3 | |
| HCR4 | |
| HCR5 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HCR 2 | TELECONFERENCED | |
| *+ | HCR 3 | TELECONFERENCED | |
| *+ | HCR 4 | TELECONFERENCED | |
| *+ | HCR 5 | TELECONFERENCED | |
HCR 2-IN-STATE GAS PIPELINE HCR 3-IN-STATE GAS PIPELINE HCR 4-IN-STATE GAS PIPELINE HCR 5-IN-STATE GAS PIPELINE 3:03:36 PM CO-CHAIR MILLETT announced that the order of business would be HOUSE CONCURRENT RESOLUTION NO. 2, Requesting the governor to provide energy security for all Alaskans by pursuing development of a natural gas bullet pipeline from the North Slope to the Cook Inlet region; and requesting the governor to identify and negotiate with one or more persons capable of producing natural gas from the Gubik area, and other areas on the North Slope if necessary, in sufficient quantities to support a bullet pipeline project; HOUSE CONCURRENT RESOLUTION NO. 3, Requesting the governor to provide energy security for all Alaskans by taking and encouraging all action that would support a natural gas bullet pipeline from the North Slope to the Cook Inlet region, including initiating any necessary negotiations to reopen the Agrium plant in Kenai; HOUSE CONCURRENT RESOLUTION NO. 4, Requesting the governor to provide energy security for Alaskans by taking and encouraging all action to support development of a natural gas bullet pipeline from the North Slope to the Cook Inlet region including advocating an increase in the amount of natural gas that may be exported under authority granted by the United States Department of Energy; and HOUSE CONCURRENT RESOLUTION NO. 5, Requesting the governor to provide energy security for all Alaskans by working on significant elements and components to support the timely construction of a natural gas bullet pipeline from the North Slope to the Cook Inlet region and to take necessary action to assist and facilitate the process for a private entity to make a final investment decision to commit to the pipeline before November 1, 2010. 3:03:49 PM CO-CHAIR EDGMON moved to hear as a block HCR 2, HCR 3, HCR 4, and HCR 5, and objected for discussion purposes. [Therefore, the committee heard the resolutions individually.] HCR 2-IN-STATE GAS PIPELINE CO-CHAIR MILLETT announced that the first order of business would be HCR 2, HOUSE CONCURRENT RESOLUTION NO. 2, Requesting the governor to provide energy security for all Alaskans by pursuing development of a natural gas bullet pipeline from the North Slope to the Cook Inlet region; and requesting the governor to identify and negotiate with one or more persons capable of producing natural gas from the Gubik area, and other areas on the North Slope if necessary, in sufficient quantities to support a bullet pipeline project. 3:04:11 PM REPRESENTATIVE RAMRAS, speaking as the Prime Sponsor of HCR 2, HCR 3, HCR 4, and HCR 5, requested that, although the resolutions were moved as a block, the discussion of each resolution be taken in sequence. He said that he preferred to "move them as a block, but to vote them out individually ... ." Representative Ramas then introduced HCR 2 and said that the resolution recognizes that it is in the best interest of all Alaskans to move forward on an in-state gas line. He explained that the construction of a large diameter pipeline either by the Alaska Gasline Inducement Act (AGIA), or by Denali-The Alaska Gas Pipeline, does not offer a timely solution to the availability of in-state natural gas. For example, diesel based economies simply can not continue to endure sub-arctic temperatures at a cost of $4.50 per gallon for home heating fuel. The first consideration in pursuit of an in- state gas line is the certainty of supply: a primary supply and a contingent supply. Representative Ramras noted that HCR 2 recognizes the value of producing natural gas from the Gubik area and also the value of a contingent supply from other areas. To illustrate the importance of a contingent supply of gas, he explained that a 20-inch pipeline is capable of [transporting] up to 500 million cubic feet (mcf) per day, or approximately 180 billion cubic feet (bcf) per year - amortized over 20 years - therefore, 3.6 trillion cubic feet (tcf) of gas is needed. However, only 600 bcf gas is proven from the Gubik area and the actual discovery may be less. 3:09:27 PM REPRESENTATIVE RAMRAS summarized that HCR 2 directs the governor and her administration to help source a contingent supply of gas so that there will be a sufficient supply to amortize a 20-inch pipeline. He concluded: ... [HCR 2] recommends that [sources of natural gas are found in] other areas on the North Slope, if necessary, in sufficient quantities to support a bullet line project. 3:10:05 PM CO-CHAIR MILLETT opened public testimony. 3:10:22 PM FRANK ABEGG, Volunteer, Fairbanks Economic Development Corporation (FEDC), informed the committee that he is a retired citizen active with the Fairbanks Economic Development Corporation (FEDC). He said that a group of Fairbanks residents has been studying energy and better health issues, such as the fine particulate matter (PM2.5) problem, for the past three years. In fact, the group of volunteers studied the state energy profile, including the use of fuel oil and its pricing structure, pipelines, [gas] supply issues, the gas market, and the gas field. The group will soon publish a report through FEDC titled, "In-state Gas Pipeline Options." The publication will report findings on the Alaska Natural Gas Development Authority (ANGDA) gas pipeline, the spur line, the ENSTAR Natural Gas Company bullet line, and the supply of liquefied natural gas (LNG) by Fairbanks Natural Gas, LLC. Each proposal holds "good things and ... bad things, but when you look at the Anchorage area and Fairbanks the one project ... that brings the most promise is the bullet line ... [that] would connect the major Railbelt areas," he said. 3:12:52 PM MR. ABEGG further explained that the community of Fairbanks burns about 50 million gallons of fuel oil per year for residential and commercial heating. If 70 percent of that market could be moved to gas it would improve the PM2.5 [air quality] and also save $120 million based on a fuel oil cost of $2.50 per gallon. Adding electric utilities and refineries that also burn fuel oil would double the savings to $250 million per year. He opined that if Anchorage gas prices increase by $3 due to the necessity to pay for imported LNG, the cost could be an extra $250 million for residential, commercial, and utility consumers. This amount added to the savings for the Fairbanks area equals the annual cost of the bullet line: A $4 billion bullet line at 12 percent equals a rate of return of $500 million per year. 3:14:06 PM MR. ABEGG warned that the "do-nothing scenario" is going to cost Alaska one way or another; therefore, anything the state can do to expedite the bullet line in the next five years is critical to Alaska's economy, air quality, jobs, and the ability for Alaskans to obtain access to a resource. Speaking as a public citizen, he expressed his strong support for the bullet line. 3:15:19 PM ELIZABETH GRAY, Assistant Manager, Matanuska-Susitna Borough, informed the committee that she is the Assistant Manager for the Matanuska-Susitna Borough and stated the borough's support for the construction of a natural gas [pipe]line to help meet the immediate gas needs of Southcentral and Interior Alaska. She observed that Cook Inlet gas supplies are dwindling, while the demand for natural gas is growing. Projections show that in 2010, local natural gas supplies in Southcentral will begin to fall short; in fact, 52 percent of the state will be affected by the shortage of gas supplies. She opined that the proposed bullet natural gas pipeline can be completed in the next few years to meet gas needs and to create new economic activities. The Matanuska-Susitna Borough supports the creation of a gas line to provide energy security for the state and to facilitate natural resource extraction, value-added processing, the development of a cement production plant at Globe Creek, and the possible reactivation of the Agrium, Inc. (Agrium), fertilizer plant in Kenai. 3:17:26 PM MS. GRAY called the committee's attention to the proposed rail line extension from the Alaska Railroad Corporation mainline to Port MacKenzie and said that it will help lower the cost of the construction of the bullet line by an estimated $100 million. She referred to a 2008 study by the University of Alaska Anchorage (UAA) Institute of Economic Research (ISER) that indicated the additional resource extraction facilitated by the rail extension will generate from 500 to 1,000 jobs. Moreover, according to Northern Economics, the rail extension project itself will generate 3,200 to 3,400 construction jobs. She concluded that the Matanuska-Susitna Borough strongly supports the immediate construction of the bullet natural gas line and rail extension in order to diversify the economy and limit the state's dependence on federal government and petroleum industry jobs. 3:18:48 PM MARK MAYO, Planning Director, Matanuska-Susitna Borough, expressed his agreement with the previous speaker. 3:19:01 PM CURTIS THAYER, Director, Corporate & External Affairs, ENSTAR Natural Gas Company (ENSTAR), said ENSTAR supports all four resolutions, as they go hand-in-hand to provide the foundation for the [bullet gas line] project. He emphasized the need for an industrial anchor such as LNG or Agrium, that can establish a reasonable tariff for the residential consumers along the Railbelt. He pointed out that, fifteen months ago, the legislature recognized the need to reduce the tax rate for the in-state use of gas; as a result there is renewed development in the Gubik area, in the Nenana Basin and at the Yukon Flats. Moreover, ENSTAR has committed millions of dollars toward work on the bullet line and has proved gas in Gubik. If necessary, additional sources of gas will come from the North Slope to provide the energy needed for Southcentral and the Interior for the next 50 years. Mr. Thayer stressed that there is an accessible in-state market consisting of Fairbanks, Golden Valley Electric, and Flint Hills Resources, along with potential customers such as Eielson Air Force Base and Ft. Wainwright Army Base. 3:21:57 PM MR. THAYER continued to identify possible customers for natural gas from the bullet line such as Chugach Electric Association, Matanuska Electric Association (MEA), Agrium, and other industrial consumers. He concluded by assuring the committee that ENSTAR is committed to the bullet gas line and supports HCR 2, HCR 3, HCR 4, and HCR 5. 3:22:44 PM CO-CHAIR MILLETT closed public testimony. [Although not formally stated, if was understood that Co-Chair Edgmon removed his objection.] 3:22:53 PM REPRESENTATIVE DAHLSTROM moved to report HCR 2 out of committee with individual recommendations and no attached fiscal note. There being no objection, it was so ordered. 3:23:23 PM The committee took an at-ease from 3:23 p.m. to 3:25 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Sponsor Stmt HCR 2 020309.pdf |
HENE 2/3/2009 3:00:00 PM |
|
| Sponsor Stmt HCR 3 020309.pdf |
HENE 2/3/2009 3:00:00 PM |
|
| Sponsor Stmt HCR 4 020309.pdf |
HENE 2/3/2009 3:00:00 PM |
|
| Sponsor Stmt HCR 5 020309.pdf |
HENE 2/3/2009 3:00:00 PM |