04/15/2002 01:26 PM House RES

HB 302-ALASKA GAS CORPORATION                                                                                                 
                                                                                                                                
CO-CHAIR MASEK announced the first  order of business, HOUSE BILL                                                               
NO.  302, "An  Act  establishing the  Alaska  Gas Corporation,  a                                                               
public corporation, and providing  for its structure, management,                                                               
responsibilities,  and operation,  and requiring  the development                                                               
of a project plan to  evaluate whether construction and operation                                                               
of   a  natural   gas  transmission   pipeline  project   by  the                                                               
corporation is feasible."                                                                                                       
                                                                                                                                
Number 0100                                                                                                                     
                                                                                                                                
REPRESENTATIVE JIM  WHITAKER, Alaska State  Legislature, sponsor,                                                               
came  forward to  present HB  302,  joined by  staff person  Lori                                                               
Backes.  He offered his belief  that a legislative effort of this                                                               
nature can  facilitate construction of a  successful gas pipeline                                                               
project.  However,  a new element has arisen,  an initiative that                                                               
will put  before the voters  in November another "gas  entity," a                                                               
port authority that  is a corporate entity.  He  said the problem                                                               
with  the  initiative is  that  rather  than letting  the  market                                                               
determine  where  gas should  or  shouldn't  go, it  specifies  a                                                               
"Prudhoe Bay-to-Valdez  LNG [liquefied  natural gas]  approach to                                                               
gas."  He remarked, "We've gone  beyond that, and I think that we                                                               
would  muddy  the  waters  significantly  unless  we  provide  an                                                               
alternative to that  initiative."  He offered his  belief that HB
 does that.                                                                                                                  
                                                                                                                                
REPRESENTATIVE WHITAKER  brought attention to a  legal opinion in                                                               
committee packets  from Jack Chenoweth [of  Legislative Legal and                                                               
Research Services],  which he said indicates  Mr. Chenoweth "sees                                                               
no reason  that House  Bill 302 is  not significantly  similar to                                                               
the initiative, as  to make the initiative moot."   Generally, in                                                               
addition to being a better idea  than the initiative, he said, HB
  will   have  an  effect   that  is   significant,  including                                                               
significant  revenue   advantages  to   the  state   relating  to                                                               
ownership.    Mentioning  competition  with  regard  to  pipeline                                                               
access, as  well as in-state  usage issues, he suggested  that it                                                               
is  appropriate,  if  not  imperative, that  the  state  have  an                                                               
ownership position with regard to a natural gas pipeline.                                                                       
                                                                                                                                
CO-CHAIR  MASEK requested  Representative Fate's  comments, since                                                               
he is  a member of  the House Special  Committee on Oil  and Gas,                                                               
which had heard the bill previously.                                                                                            
                                                                                                                                
Number 0431                                                                                                                     
                                                                                                                                
REPRESENTATIVE FATE  said he  thought Mr.  Chenoweth's memorandum                                                               
speaks well  for it, and that  [the bill] is a  little broader in                                                               
scope [than the initiative].  He  offered his own opinion that it                                                               
is a very good bill.                                                                                                            
                                                                                                                                
CO-CHAIR MASEK asked whether anyone  wished to testify; there was                                                               
no response.                                                                                                                    
                                                                                                                                
The committee took an at-ease from 1:28 p.m. to 1:29 p.m.                                                                       
                                                                                                                                
Number 0514                                                                                                                     
                                                                                                                                
REPRESENTATIVE FATE moved to report  HB 302 out of committee with                                                               
individual  recommendations  and  the  accompanying  zero  fiscal                                                               
note.   There being  no objection,  HB 302 was  moved out  of the                                                               
House Resources Standing Committee.