02/03/2009 03:00 PM House ENERGY
| Audio | Topic |
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| Start | |
| HCR2|| HCR3|| HCR4|| HCR5 | |
| HCR2 | |
| HCR3 | |
| HCR4 | |
| HCR5 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HCR 2 | TELECONFERENCED | |
| *+ | HCR 3 | TELECONFERENCED | |
| *+ | HCR 4 | TELECONFERENCED | |
| *+ | HCR 5 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
February 3, 2009
3:03 p.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Charisse Millett, Co-Chair
Representative Nancy Dahlstrom
Representative Kyle Johansen
Representative Jay Ramras
Representative Pete Petersen
Representative Chris Tuck
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
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.
- MOVED HCR 2 OUT OF COMMITTEE
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.
- MOVED HCR 3 OUT OF COMMITTEE
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.
- MOVED HCR 4 OUT OF COMMITTEE
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.
- MOVED HCR 5 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HCR 2
SHORT TITLE: IN-STATE GAS PIPELINE
SPONSOR(s): REPRESENTATIVE(s) RAMRAS
01/21/09 (H) READ THE FIRST TIME - REFERRALS
01/21/09 (H) ENE, RES
02/03/09 (H) ENE AT 3:00 PM BARNES 124
BILL: HCR 3
SHORT TITLE: IN-STATE GAS PIPELINE
SPONSOR(s): REPRESENTATIVE(s) RAMRAS
01/21/09 (H) READ THE FIRST TIME - REFERRALS
01/21/09 (H) ENE, RES
02/03/09 (H) ENE AT 3:00 PM BARNES 124
BILL: HCR 4
SHORT TITLE: IN-STATE GAS PIPELINE
SPONSOR(s): REPRESENTATIVE(s) RAMRAS
01/21/09 (H) READ THE FIRST TIME - REFERRALS
01/21/09 (H) ENE, RES
02/03/09 (H) ENE AT 3:00 PM BARNES 124
BILL: HCR 5
SHORT TITLE: IN-STATE GAS PIPELINE
SPONSOR(s): REPRESENTATIVE(s) RAMRAS
01/21/09 (H) READ THE FIRST TIME - REFERRALS
01/21/09 (H) ENE, RES
02/03/09 (H) ENE AT 3:00 PM BARNES 124
WITNESS REGISTER
FRANK ABEGG, Volunteer
Fairbanks Economic Development Corporation (FEDC)
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of the bullet gas line.
ELIZABETH GRAY, Assistant Manager
Matanuska-Susitna Borough
Palmer, Alaska
POSITION STATEMENT: Testified in support of the bullet gas line.
MARK MAYO, Planning Director
Matanuska-Susitna Borough
Palmer, Alaska
POSITION STATEMENT: Testified in support of the bullet gas line.
CURTIS THAYER, Director
Corporate & External Affairs
ENSTAR Natural Gas Company
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HCR 2, HCR 3, HCR 4,
and HCR 5.
LISA PARKER, Spokesperson
Agrium U.S.
Agrium Inc.
Kenai, Alaska
POSITION STATEMENT: Testified in support of HCR 3.
JERRY MCCUTCHEON,
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to the construction
of a natural gas line.
ACTION NARRATIVE
3:03:25 PM
CO-CHAIR CHARISSE MILLETT called the House Special Committee on
Energy meeting to order at 3:03 p.m. Representatives Dahlstrom,
Ramras, Petersen, Tuck, Edgmon, and Millett were present at the
call to order. Representative Johansen arrived as the meeting
was in progress.
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.
HCR 3-IN-STATE GAS PIPELINE
3:25:43 PM
CO-CHAIR EDGMON moved to hear HCR 3 and objected for purposes of
discussion.
3:26:26 PM
REPRESENTATIVE RAMRAS explained the purpose of introducing
resolutions that incrementally address how to build the in-state
gas line. In fact, the construction of a bullet line has
incremental components, thus the first resolution sources out a
supply of gas. The second resolution, HCR 3, addresses re-
opening of the Agrium plant. Representative Ramras reminded the
committee the fuller the pipe, the lower the tariff, and it is in
the state's best interest to have a full pipe; however, light
commercial and residential consumption of natural gas throughout
the Railbelt represents only 60 billion cubic feet (bcf) per year
and would fill the pipe to one-third of its capacity. Re-
starting the Agrium plant would demand another 60 bcf per year of
industrial usage, in addition to reinstating 250 jobs in the
Kenai area. He opined that more economical energy from the
bullet line "solves the [economical] problem for Agrium."
3:30:04 PM
REPRESENTATIVE RAMRAS continued to explain that the cost of
fertilizer in the state is anticipated to rise by 400 percent due
to the closing of the Agrium plant. In addition, the company was
contributing to Alaska's short list of value-added products by
exporting urea to much of the world; however, this industry
requires a source of cheap natural gas. An additional benefit of
the plant's operation was to provide affordable fertilizer to the
green belts in the Matanuska-Susitna (Mat-Su) Valley and Delta
Junction, possibly for the future growth of bio-fuels. He
stressed that operation of the Agrium plant serves many functions
for the Kenai area, the Mat-Su Borough, the Delta region, and for
recreational gardeners across the state. Representative Ramas
surmised that the present administration's only involvement in
this situation is to determine the company's production tax
status. He expressed his belief that the administration can take
a more active role in restoring the operation of the Agrium
plant; in fact, Agrium officials desire contact with the
administration, and that contact is encouraged by HCR 3.
3:33:54 PM
REPRESENTATIVE PETERSEN asked whether building the bullet line
will delay the building of the major natural gas pipeline.
3:34:35 PM
REPRESENTATIVE RAMRAS assured the committee that there has been
previous testimony from representatives of TransCanada, and
Denali - the Alaska Gas Pipeline Project, that the in-state gas
pipeline is complementary to their projects; in fact, bullet line
take-off points are helpful to them. Moreover, the Gubik area is
not a source of gas for the large diameter pipeline, he said.
3:35:21 PM
CO-CHAIR MILLETT opened public testimony on HCR 3.
3:35:36 PM
LISA PARKER, Spokesperson, Agrium, Inc., Agrium U.S., stated that
the resolutions before the committee are very important to
provide economy stability to the state. She read a brief history
of the Agrium Kenai Nitrogen Fertilizer plant and said that after
40 years of operation the plant closed in September 2007, due to
a lack of natural gas supply from Cook Inlet. She informed the
committee that Agrium supports the bullet line, and HCR 3, and
opined that construction of the bullet line and negotiation of
successful contracts to purchase [gas] would restore a billion
dollar industrial facility to operation along with jobs, a tax
base, and economic benefits to the Kenai community. The
reopening of the plant would also provide urea needed by the
state's agricultural industry and the Department of
Transportation & Public Facilities (DOT&PF). Ms. Parker
corrected Representative Ramras in that there are currently 10
employees "mothballing" the Kenai facility.
3:38:18 PM
REPRESENTATIVE RAMRAS observed "[there is] no greater clarion
call for why we need an in-state bullet line... ."
3:39:04 PM
JERRY MCCUTCHEON informed the committee that construction of any
gas line is not in the best interest of Alaska. What is needed
is a gas liquids pipeline of 150,000 barrels a day built along
the George Parks Highway to Cook Inlet. He stated that gas
liquids are worth more than oil; furthermore, there is not enough
gas for a gas line in all of the North Slope, or in the Gubik
area. He reminded the committee that in 2004, ENSTAR announced
that the gas required [for a gas pipeline] was 1.2 bcf; however,
it now plans a line on 500 million cubic feet (mcf). He opined
that [ENSTAR'S plans] are to keep the legislature "off balance
... so Conoco can continue to pedal its overpriced gas." Mr.
McCutcheon expressed his support for drilling efforts by Escopeta
Oil in Cook Inlet.
3:41:38 PM
CO-CHAIR MILLETT closed public testimony.
3:41:49 PM
CO-CHAIR EDGMON removed his objection.
3:41:57 PM
REPRESENTATIVE DAHLSTROM relayed that a group has been working
with Escopeta Oil and the Department of Natural Resources (DNR)
since November.
3:42:26 PM
CO-CHAIR MILLETT added that DNR has allowed an extended period of
time for the formation of a unit.
3:42:46 PM
CO-CHAIR EDGMON moved to report HCR 3 out of committee with
individual recommendations and no attached fiscal note. Hearing
no objection, it was so ordered.
3:43:04 PM
The committee took an at-ease from 3:43 p.m. to 3:45 p.m.
HCR 4-IN-STATE GAS PIPELINE
CO-CHAIR MILLETT announced that the next order of business would
be 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.
3:45:22 PM
CO-CHAIR EDGMON moved to hear HCR 4 and objected for purposes of
discussion.
3:45:38 PM
REPRESENTATIVE RAMRAS reiterated that a 500 mcf per day gas
pipeline requires an annual flow of 180 bcf to fill the pipe and
allow for a minimum tariff. As discussed, all of the residential
and light commercial gas usage in the Railbelt area would be
approximately 60 bcf per year and the Agrium plant would also use
60 bcf per year. Since the annual capacity of the pipe is 180
bcf, there is a potential shortage of 60 bcf; therefore, HCR 4
encourages the governor and her administration to advocate for an
increase in the amount of natural gas that may be exported under
authority granted by the United States Department of Energy.
Representative Ramras related that an official of the Federal
Energy Regulatory Commission (FERC) conveyed that it is critical
to Alaska that the U. S. Department of Energy be involved in
securing gas for the pipeline; in addition, the official warned
that export licenses are difficult to grant because the U.S.
energy supply is sometimes robust and sometimes very lean.
3:48:16 PM
REPRESENTATIVE RAMRAS emphasized that it is important for the
administration to open a dialog for the purpose of expanding the
capacity of Alaska's export license. Expanding the capacity of
the license would lessen the tariffs for Alaskans. Furthermore,
exported gas is subject to a production tax thus creating an
important additional income stream for Alaska's general fund
(GF).
3:49:24 PM
REPRESENTATIVE PETERSEN asked whether studies have been done as
to how the $4 billion construction cost of the bullet line would
affect the price of natural gas.
3:49:48 PM
REPRESENTATIVE RAMRAS reminded members that HCR 4 speaks to the
export component of the bullet gas pipeline project. He further
explained that gas coming from the Gubik area, or near the North
Slope, is subject to negotiations between the Regulatory
Commission of Alaska (RCA) and the supplier of gas. In this
case, Cook Inlet is a depleted field and exploration and
production costs there would be higher than in the Gubik area
where gas is abundant. He stressed that the tariff cost to
consumers will increase with a pipeline that is only partly full.
He advised Representative Pedersen that the state is far better
off to be early in applying for an expansion of the export
license in order to reduce the tariff by filling the pipe.
3:51:34 PM
REPRESENTATIVE TUCK asked for the amount of natural gas that was
exported out of the Kenai peninsula at its height of production.
3:51:51 PM
REPRESENTATIVE RAMRAS estimated 12 bcf per year and deferred the
question to Mr. Thayer.
3:52:46 PM
MR. THAYER offered to provide an estimate at a later date.
3:53:08 PM
REPRESENTATIVE TUCK asked whether there will be a need to build
another gas liquids plant or will the existing one be able to
handle the full capacity of the bullet line.
3:53:25 PM
REPRESENTATIVE RAMRAS assured the committee that there will not
be a need to expand the LNG plant if the dialog with U.S.
Department of Energy to expand the export license is not
initiated right away.
3:54:09 PM
REPRESENTATIVE TUCK further asked whether there will be a uniform
price for gas, or differences in price for Agrium, exported gas,
and in-state commercial and residential use: In short, one is
subsidizing another.
3:54:39 PM
REPRESENTATIVE RAMRAS said that has not been determined. The
pipeline company has two businesses: negotiating for gas,
selling it, and collecting a premium for the transmission of gas;
and shipping gas for large consumers. He assumed that Agrium,
because it would be consuming one-third of the gas in the bullet
line, would receive pricing preferential to that of residential
and commercial customers; however, Alaskan residential and
commercial customers will still see relief from the present
situation of paying the highest prices for natural gas in the U.
S.
3:55:53 PM
CO-CHAIR MILLETT opened public testimony.
3:56:06 PM
MR. ABEGG expressed his frustration with the extension of the LNG
license for ConocoPhillips Alaska, Inc., (Conoco) because in some
ways the extension has precipitated the problem of limited gas
supplies in Cook Inlet; however, Conoco's past investment has
also provided opportunities for Alaska. He agreed that the gas
pipeline does need a large industrial user and he supported
extending the license for the LNG plant in Kenai for a limited
number of years, based on in-state uses for the gas. He
suggested that in-state opportunities for the use of gas such as
development of the Susitna Dam, a possible cement industry,
mining discoveries, and the coal-to-liquids plant, will come
along. Mr. Abegg concluded that he was in favor of [expanding
the export license] on a limited basis.
3:58:08 PM
REPRESENTATIVE RAMRAS remarked:
Wouldn't it be great if we didn't have a legal
limitation of 500 million cubic feet a day and we could
afford to have an export component and, a, pursue other
value-added opportunities instead of being capped off
like we are because of the AGIA legislation that was
signed into law last year?
3:58:36 PM
MR. ABEGG agreed, because there is a lot of potential gas along
the bullet line, he said. Producers in the Nenana fields area
are expecting reserves of two trillion cubic feet (tcf) to ten
tcf, additionally gas reserves are anticipated in Yukon Flats,
Stevens Village, North Slope, and Gubik field. Although 500
[mcf of gas] will make the line work, additional capacity is
desirable.
3:59:25 PM
REPRESENTATIVE RAMRAS asked:
If we were successful in getting the export expansion
of the license and that bumped us up right at 500
million cubic feet, and then the development of
International Tower Hills ... came up, and if ... a
gas-to-liquids [plant] opened up, and if the Mat-Su
concrete plant opened up, and we were otherwise
committed and we couldn't take our usage up above 500
million cubic feet because we had promised those rights
away to a Canadian company, Transcanada, that would be
a shame, wouldn't it?
4:00:00 PM
MR. ABEGG said yes.
4:00:08 PM
CO-CHAIR MILLETT closed public testimony.
4:00:28 PM
CO-CHAIR EDGMON removed his objection and moved to report HCR 4
out of committee with individual recommendations and no attached
fiscal note. Hearing no objections, it was so ordered.
4:00:48 PM
The committee took an at-ease from 4:00 p.m. to 4:03 p.m.
4:03:02 PM
HCR 5-IN-STATE GAS PIPELINE
CO-CHAIR MILLETT announced that the next order of business would
be 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.
4:03:08 PM
CO-CHAIR EDGMON moved to hear HCR 5 and objected for discussion
purposes.
4:03:18 PM
REPRESENTATIVE RAMRAS explained the state's cross purposes
regarding the introduction of wood bison, a potentially
endangered species, into a region that [the state] is also trying
to open up for gas exploration. House Resolution 5 requests, in
the interest of providing energy security for all Alaskans, that
the government eliminates regulatory hurdles and allows a private
entity to make its final investment decision to commit to the
pipeline before November 1, 2010. Representative Ramras referred
to Mr. McCutcheon's concern about a similar situation, between
the governor's office and DNR, regarding drilling in Cook Inlet
and Point Thomson. He advised that his community of Fairbanks is
"paralyzed by fear" over the possibility of the return of high
oil prices and that a bullet line is essential to liberate from
fear all of the residents that live along the Railbelt. He
concluded that HCR 5 will remove "shackles" and direct the
government to be an active participant in removing hurdles to
[investment decisions by private entities].
4:06:57 PM
REPRESENTATIVE PETERSEN asked about the proposed release date of
the wood bison in the Nenana Basin.
4:07:14 PM
REPRESENTATIVE RAMRAS related that the Alaska Department of Fish
& Game (ADF&G) issued assurances that there is not a problem. He
deferred the question to the appropriate state agency.
4:08:10 PM
CO-CHAIR MILLETT opened public testimony on HCR 5. Hearing none,
public testimony was closed.
4:08:37 PM
CO-CHAIR EDGMON withdrew his objection and moved to report HCR 5
out of committee with individual recommendations and no attached
fiscal note. Hearing no objection, it was so ordered.
4:09:12 PM
CO-CHAIR MILLETT briefly discussed the committee's upcoming
meetings.
4:10:30 PM
REPRESENTATIVE JOHANSEN observed that beginning one year ago, the
sponsor of the aforementioned resolutions has been very public in
pushing these issues. He said that he was thrilled to hear the
governor include these issues in her state-of-the-state address.
Representative Johansen expressed his full support of the
resolutions.
4:11:39 PM
REPRESENTATIVE DAHLSTROM concurred with Representative Johansen.
4:11:45 PM
REPRESENTATIVE TUCK agreed that the bullet line will provide
opportunities to the state and private industry. These
resolutions are needed to ensure that Alaska's deep water port in
the Kenai, and new industry, will flourish.
4:12:25 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 4:12 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 |