Legislature(2011 - 2012)BUTROVICH 205

03/26/2012 03:30 PM Senate RESOURCES


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Audio Topic
03:33:45 PM Start
03:35:19 PM Presentation by Chrystia Chudczak, Assistant Commissioner, Canadian Federal Northern Pipeline Agency
04:05:16 PM SB215
04:37:32 PM SB209
04:55:18 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation by Chrystia Chudczak, Asst. TELECONFERENCED
Commissioner, Canada's Federal Northern Pipeline
Agency
+= SB 215 GASLINE DEV. CORP: IN-STATE GAS PIPELINE TELECONFERENCED
Heard & Held
+= SB 209 DEVELOPMENT PLANS FOR OIL & GAS LEASES TELECONFERENCED
Heard & Held
<Public Testimony>
+ Bills Previously Heard/Scheduled TELECONFERENCED
        SB 215-GASLINE DEV. CORP: IN-STATE GAS PIPELINE                                                                     
                                                                                                                                
4:05:16 PM                                                                                                                    
CO-CHAIR  PASKVAN  announced  consideration   of  SB  215  and  a                                                               
continuation of the Monday, March 26, presentation.                                                                             
                                                                                                                                
SCOTT HEYWORTH,  Chair, Alaska Natural Gas  Development Authority                                                               
(ANGDA), Anchorage, AK,  said he had two contractors  with him to                                                               
give  an overview  of  what ANGDA  had done  with  the Beluga  to                                                               
Fairbanks (B2F) project.                                                                                                        
                                                                                                                                
4:07:05 PM                                                                                                                    
He  said about  four years  ago,  Governor Palin  called a  press                                                               
conference and asked  ANGDA and Enstar to run  a "project," which                                                               
was  a  gasline from  Cook  Inlet  to  Fairbanks. ANGDA  had  one                                                               
meeting  with Enstar  who pulled  away, but  ANGDA continued  and                                                               
started looking at the  Ft. Richardson/Glenn/TAPS corridor route.                                                               
They felt  that it  had the most  population with  three military                                                               
bases, Golden Valley Electric and  the Flint Hills Refinery. They                                                               
already  had  a  state   unconditional  right-of-way  lease  from                                                               
Glennallen to  Palmer and it  would be very  easy to work  in the                                                               
existing  TAPS  corridor,  recently  valued  at  $12  million  by                                                               
Legislative Budget  and Audit (LB&A).  ANGDA ran out  of funding,                                                               
but completed 80 to 90 percent of the route.                                                                                    
                                                                                                                                
4:08:47 PM                                                                                                                    
CO-CHAIR PASKVAN wanted  to know if the following  statement in a                                                               
December 2009 report was still true:                                                                                            
                                                                                                                                
     There  are sufficient  additional natural  gas reserves                                                                    
     in the  Cook Inlet region for  development and delivery                                                                    
     to  Fairbanks  via  the B2F  Pipeline.  Therefore,  the                                                                    
     supply  of  gas to  existing  consumers  of Cook  Inlet                                                                    
     Natural Gas would not be adversely impacted.                                                                               
                                                                                                                                
MR. HEYWORTH responded that he didn't  know how much faith he had                                                               
in  that statement  even four  years ago,  but today  he believed                                                               
there was plenty of gas in Cook  Inlet, 3.5 tcf or 10-15 years of                                                               
gas  according to  Furie. Cook  Inlet is  supposed to  have three                                                               
jack-up  rigs working  in it  this summer,  and there  is a  good                                                               
chance a lot more gas will be  found if they get lucky like Furie                                                               
did in striking a big find on the very first well.                                                                              
                                                                                                                                
4:10:46 PM                                                                                                                    
CO-CHAIR WAGONER related that Furie  said on Wednesday that their                                                               
estimate was down to 750 bcf/d  and they still hadn't flow tested                                                               
the well or done  a lot of logs on it. And  only two jack-up rigs                                                               
will be in Cook Inlet this  summer, the Endeavor and Spartan 151;                                                               
there never was a third.                                                                                                        
                                                                                                                                
MR. HEYWORTH remarked  that he was disappointed  about going down                                                               
to 750 bcf.                                                                                                                     
                                                                                                                                
CO-CHAIR PASKVAN asked him to elaborate  a little more on why the                                                               
B2F project was not completed.                                                                                                  
                                                                                                                                
MR. HEYWORTH replied that a  couple of things coincided. As ANGDA                                                               
got started on  Governor Palin's B2F project,  a parallel instate                                                               
gasline committee was  started in HB 269; its  first chairman was                                                               
Harry Noah  who passed it off  to Bob Swenson, who  passed it off                                                               
to  Dan  Fauske. The  other  group  was  strongly for  the  Parks                                                               
Highway;  but ANGDA  ran out  of  funds and  support and  started                                                               
receiving a  lot of resistance  from the Army Corps  of Engineers                                                               
and the  Bureau of  Land Management (BLM).  The state  decided to                                                               
get behind Mr. Fauske and HB 9.                                                                                                 
                                                                                                                                
4:14:17 PM                                                                                                                    
SENATOR FRENCH  asked how much longer  the Glenn/Richardson route                                                               
is than the Parks Highway route.                                                                                                
                                                                                                                                
MR. HEYWORTH answered that he  wanted help in answering that from                                                               
Mr. Odsather.                                                                                                                   
                                                                                                                                
4:14:55 PM                                                                                                                    
RICHARD "O.D." ODSATHER,  Odsather International Marketing, ANGDA                                                               
contractor, Fairbanks, AK, answered  that one line, Glennallen to                                                               
Delta to  North Pole,  is 30  miles shorter  than the  other. The                                                               
distance  for the  Glenn Highway/Tok/North  Pole route  was about                                                               
437  miles  and  the  distance for  the  Milepost  39/Dunbar/Fort                                                               
Greely route was 467 miles; three military bases were involved.                                                                 
                                                                                                                                
SENATOR FRENCH said he wanted to  compare a line from Big Lake to                                                               
Fairbanks versus  a line from  Fairbanks to the  nearest pipeline                                                               
coming down the Richardson and the Glenn Highways.                                                                              
                                                                                                                                
MR. ODSATHER  responded to subtract  25 miles from the  467 miles                                                               
for going up through Dunbar, because  it's 25 miles from Big Lake                                                               
to Milepost 38 on the Enstar line.                                                                                              
                                                                                                                                
SENATOR FRENCH asked him how many  pipeline miles it was from Big                                                               
Lake to  Fairbanks up the  Parks Highway  saying he came  up with                                                               
271 miles. Mr. Odsather agreed.                                                                                                 
                                                                                                                                
SENATOR  FRENCH asked  how many  miles  it was  from the  nearest                                                               
pipeline touching  the grid that connects  Anchorage to Fairbanks                                                               
through  the Glenn/Richardson  route if  its 271  miles from  Big                                                               
Lake to Fairbanks.                                                                                                              
                                                                                                                                
MR. ODSATHER  responded that they had  to back up a  bit, because                                                               
to make  them equal,  you have  to go from  Fairbanks up  to Fort                                                               
Greely to pick up the three military bases.                                                                                     
                                                                                                                                
SENATOR  FRENCH asked  why the  three military  bases have  to be                                                               
included.                                                                                                                       
                                                                                                                                
MR.  ODSATHER   explained  that   the  B2F  line   includes  Fort                                                               
Wainwright,  Eielson Air  Force Base  and Fort  Greely as  anchor                                                               
tenants.                                                                                                                        
                                                                                                                                
SENATOR FRENCH  asked Mr. Odsather if  he was saying that  he had                                                               
added enough pipe to the 271  miles from Big Lake to Fairbanks to                                                               
touch the three bases (if they  all agreed that is something that                                                               
has to be done).                                                                                                                
                                                                                                                                
MR. ODSATHER replied "Yes, sir...if  you want to make them equal,                                                               
you have to do that."                                                                                                           
                                                                                                                                
4:20:25 PM                                                                                                                    
CO-CHAIR WAGONER  said Mr.  Odsather was saying  you have  to add                                                               
the  distance from  Fairbanks back  down to  the bases  using the                                                               
Parks Highway route, but you don't  have to add the bases. First,                                                               
they need  to figure out  what it takes  to get to  Fairbanks and                                                               
then if the bases want the gas  they can build a supply line from                                                               
wherever the hub is established.                                                                                                
                                                                                                                                
SENATOR FRENCH asked how big the pipe would be.                                                                                 
                                                                                                                                
MR.  ODSATHER replied  24  inches  from Palmer  to  Delta and  10                                                               
inches from Delta to North Pole.                                                                                                
                                                                                                                                
4:24:02 PM                                                                                                                    
CO-CHAIR  PASKVAN asked  if  the  24 inch  pipe  from Delta  into                                                               
Palmer  was for  the lateral  from the  anticipated 48  inch line                                                               
going to Canada.                                                                                                                
                                                                                                                                
MR.  ODSATHER answered  yes  and  he added  that  it's a  totally                                                               
reversible pipeline.                                                                                                            
                                                                                                                                
CO-CHAIR PASKVAN asked  if building a gasline next  to a railroad                                                               
(the Parks route) would save any money.                                                                                         
                                                                                                                                
MR.  ODSATHER  answered if  you  can  get  the permits  from  the                                                               
highway  or the  railroad, fine,  but it  may be  difficult going                                                               
through  Denali State  Park  where the  highway  goes through  an                                                               
"omnibus  road"  and  its  subsurface is  owned  by  the  federal                                                               
government.  So, you  might have  to negotiate  with the  federal                                                               
government.                                                                                                                     
                                                                                                                                
CO-CHAIR PASKVAN asked  if it was good or bad  to have a railroad                                                               
close by.                                                                                                                       
                                                                                                                                
4:25:40 PM                                                                                                                    
MR. ODSATHER replied that personally he  would move it off to the                                                               
edge of  the road,  because that  is the  greatest thaw  area and                                                               
therefore the least stable.                                                                                                     
                                                                                                                                
4:26:06 PM                                                                                                                    
SENATOR  JOE THOMAS,  Alaska State  Legislature, Juneau,  AK, co-                                                               
sponsor  of SB  215, observed  that the  B2F line  was considered                                                               
important at one  time and a reduced-size plastic  pipe was going                                                               
to go from  Delta into Fairbanks, because  they were anticipating                                                               
that a  line would  come down through  Fairbanks anyhow.  So, you                                                               
put  in the  plastic line  and when  the big  line was  built you                                                               
could remove the plastic one.                                                                                                   
                                                                                                                                
The Parks  Highway is 365  miles from Anchorage to  Fairbanks and                                                               
you're roughly 30  some miles north of that. So  if you run right                                                               
into Fairbanks,  you subtract 30  miles off  of that and  come up                                                               
with a 335 mile pipeline.                                                                                                       
                                                                                                                                
SENATOR FRENCH  said he was a  big supporter of this  project and                                                               
gas pipelines in  general, but the North Slope gas  project is so                                                               
big that it's hard to pinpoint  when it will actually happen, and                                                               
that  was   why  they  were   considering  taking   existing  gas                                                               
production to where was needed in  the Interior. He asked if they                                                               
were thinking about using plastic pipe as a short-term fix.                                                                     
                                                                                                                                
MR. HEYWORTH  replied that ANGDA  had researched PVC pipe  and it                                                               
could  be used  if it  was going  down the  Glenn/Richardson/TAPS                                                               
corridor where  it's very close to  either base. But to  be fair,                                                               
an existing Enstar  line goes to Big  Lake and it has  an 18 inch                                                               
tap at  the end  of it. You  could come off  of that  and proceed                                                               
north on  the Parks Highway and  come into Dunbar and  Nenana and                                                               
get into Fairbanks  and North Pole. But what he  really wanted to                                                               
convey to  the committee was the  idea that if the  ASAP pipeline                                                               
comes off  the North Slope  from Livengood down through  Minto to                                                               
Dunbar and  then cuts  over to  the UAA  campus with  the 39-mile                                                               
lateral,  then 20-mile  increments gets  you to  Fairbanks, North                                                               
Pole  and  Eielson.  The  lateral  could be  a  smaller  10  inch                                                               
pipeline coming all  the way down to and  through Delta Junction.                                                               
He asked  why you  would come  down just to  Dunbar if  you start                                                               
with the  lateral going  all the  up to North  Pole and  not just                                                               
continue down the Glenn/Richardson at  that point and hit all the                                                               
military bases:  Livengood to Dunbar,  east to Golden  Valley and                                                               
North Pole  and then pick  up the ANGDA  route to Palmer.  It's a                                                               
much cheaper pipeline that catches everybody.                                                                                   
                                                                                                                                
SENATOR FRENCH  said he  appreciated his answer  and that  he was                                                               
just  trying to  get up  to speed  by thinking  of the  quickest,                                                               
cheapest solution.                                                                                                              
                                                                                                                                
SENATOR THOMAS said  realistically the only base  you would leave                                                               
out if  you came from  mile 39 and went  up the Parks  Highway by                                                               
building  a 340  mile pipeline  would be  Fort Greely.  A plastic                                                               
pipe would probably  last long enough if an instate  line of some                                                               
type would be installed at a later date.                                                                                        
                                                                                                                                
SENATOR FRENCH said it would be  interesting to know how much gas                                                               
can  move through  12 inch  plastic pipe,  because he  didn't how                                                               
long Fairbanks  was going to  wait to  get a steel  pipeline from                                                               
the North Slope - and he didn't think they could wait that long.                                                                
                                                                                                                                
SENATOR THOMAS replied that someone  probably has the calculation                                                               
for a temporary fix to Fairbanks, but  he thought a 10 or 12 inch                                                               
pipe would be more than enough.                                                                                                 
                                                                                                                                
4:33:57 PM                                                                                                                    
SENATOR FRENCH  said every single  house in Fairbanks  would have                                                               
to  convert and  distribution lines  would  have to  be laid  and                                                               
wondered how  long that  would take  no matter  how the  gas gets                                                               
there.                                                                                                                          
                                                                                                                                
SENATOR THOMAS agreed.                                                                                                          
                                                                                                                                
CO-CHAIR  WAGONER said  they should  establish a  location for  a                                                               
hub. Pipelines  don't put  all the supply  lines out  there; they                                                               
let whoever has the certificate  of public convenience do it. The                                                               
main thing is to  get the gas to that area  and let everyone else                                                               
worry about the distribution.                                                                                                   
                                                                                                                                
CO-CHAIR PASKVAN agreed  and said the line  between Fairbanks and                                                               
Big Lake does not  need to be 24 inches. That's  only if you want                                                               
to  pre construct  the lateral  to hook  up with  a future  large                                                               
diameter line going to Valdez or through Canada.                                                                                
                                                                                                                                
CO-CHAIR WAGONER said there should be  just one line to take care                                                               
of all the needs.                                                                                                               
                                                                                                                                
[SB 215 was held in committee.]                                                                                                 

Document Name Date/Time Subjects
Northern Pipeline Agency Canada_SEN RES_03-26-2012.pdf SRES 3/26/2012 3:30:00 PM