02/02/2010 03:00 PM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| HB306 | |
| Overview(s): by Tony Palmer, Transcanada: Agia Gas Pipeline Project & Open Season | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HB 306 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
February 2, 2010
3:05 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 BILL NO. 306
"An Act declaring a state energy policy."
- MOVED CSHB 306(ENE) OUT OF COMMITTEE
OVERVIEW(S) - TONY PALMER, TRANSCANADA: AGIA GAS PIPELINE
PROJECT & OPEN SEASON
- HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 306
SHORT TITLE: STATE ENERGY POLICY
SPONSOR(s): ENERGY
01/19/10 (H) READ THE FIRST TIME - REFERRALS
01/19/10 (H) ENE, RES
01/26/10 (H) ENE AT 3:00 PM BARNES 124
01/26/10 (H) Heard & Held
01/26/10 (H) MINUTE(ENE)
01/28/10 (H) ENE AT 3:00 PM BARNES 124
01/28/10 (H) Heard & Held
01/28/10 (H) MINUTE(ENE)
02/02/10 (H) ENE AT 3:00 PM BARNES 124
WITNESS REGISTER
TONY PALMER, President, TransCanada Alaska, LLC; Vice President,
Alaska Development TransCanada
Calgary, Alberta, Canada
POSITION STATEMENT: Presented an overview on the AGIA Gas
Pipeline Project & Open Season.
ACTION NARRATIVE
3:05:09 PM
CO-CHAIR BRYCE EDGMON called the House Special Committee on
Energy meeting to order at 3:05 p.m. Present at the call to
order were Representatives, Petersen, Dahlstrom, Johansen,
Millett, and Edgmon. Representatives Tuck and Ramras arrived as
the meeting was in progress.
HB 306-STATE ENERGY POLICY
3:05:36 PM
CO-CHAIR EDGMON announced the first order of business would be
HOUSE BILL NO. 306, "An Act declaring a state energy policy."
3:05:37 PM
REPRESENTATIVE JOHANSEN moved Amendment 5 which read:
Page 2, line 22, following "export":
Insert "of power that is surplus to the
needs of Alaska communities"
3:06:26 PM
CO-CHAIR EDGMON objected for the purpose of discussion.
REPRESENTATIVE JOHANSEN informed the committee that Amendment 5
follows page 2, line 19, which read "encourage economic
development by (A) promoting the development of renewable energy
resources, including geothermal, wind, solar, hydroelectric,
hydrokinetic, tidal, and biomass energy for use by Alaskans and
for export." He explained the amendment says, "as soon as we
take care of ourselves ... then we can export."
3:07:24 PM
REPRESENTATIVE EDGMON removed his objection. Hearing no further
objection, Amendment 5 was adopted.
CO-CHAIR MILLETT moved to report HB 306 [as amended] out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSHB 306(ENE) was
reported out of the House Special Committee on Energy.
3:07:52 PM
The committee took an at-ease from 3:07 p.m. to 3:10 p.m.
3:10:12 PM
^OVERVIEW(S): BY TONY PALMER, TRANSCANADA: AGIA GAS PIPELINE
PROJECT & OPEN SEASON
CO-CHAIR EDGMON announced that the final order of business would
be a presentation by Mr. Tony Palmer of TransCanada regarding
the AGIA gas pipeline project and the open season.
3:10:44 PM
TONY PALMER, President, TransCanada Alaska, LLC; Vice President,
Alaska Development TransCanada, introduced his colleagues. Mr.
Palmer prefaced his presentation by informing the committee that
the materials that were submitted to the Federal Energy
Regulatory Commission (FERC) on January 29, 2010, are available
on TransCanada's Alaska Pipeline Project (APP) website. He
began his presentation by saying that this is an historic moment
for TransCanada and ExxonMobil, as this is the first open season
to be conducted for the project. During open season, the
pipeline company provides potential customers with engineering,
commercial, tariff cost, and other information. He pointed out
that FERC regulations-unique to this project-require that this
information is also available to the public and to competitors.
Also during open season, TransCanada will seek shipper's
contractual commitments through executed agreements. He
displayed slide 2, that was a map indicating the proposed route
of the project with two options: (1) to the Lower 48 market via
Alberta; (2) to the U.S. and international markets via Valdez.
MR. PALMER highlighted that major pipeline projects proceed
through several stages, beginning with a lengthy development
stage. This project is presently in the development stage and
will be through 2014. The development stage is divided into
three periods: "prior to" open season is the period through
April 2010; open season is scheduled from May to July 2010; and
"post" open season is the period from August 2010 through 2014.
He stressed that no single commercial party can guarantee the
success of a project; in fact, its success will take the
cooperation and action of the pipeline project, producers,
shippers, and governments.
3:15:49 PM
MR. PALMER displayed slide 4 that indicated achievements prior
to open season. Firstly, he credited producers and shippers for
their past achievements such as the exploration and development
of gas reserves, and the research of potential gas markets.
Secondly, Alaska's administration and legislature defined their
objectives and moved forward under the Alaska Gasline Inducement
Act (AGIA). Mr. Palmer noted that a critical requirement for
any project is the achievement of local and state support.
Thirdly, the U. S. government and FERC established the
regulatory structure needed for the project, including the
federal loan guarantee. Lastly, the Canadian government
established the Northern Pipeline Act that is the regulatory and
legislative structure needed for the project. He described the
difficulties other pipeline projects have faced and said, "In
order for any project to succeed, the project needs customers
and you need regulatory approval. One of those does not make a
successful project."
3:20:56 PM
CO-CHAIR MILLETT asked whether there is a third element that
must be in alignment-in addition to regulatory and commercial-
for the open season process.
MR. PALMER stated that there are roles for all players;
governments, shippers, and pipeline companies. He said this
subject will be addressed later in the presentation.
3:21:51 PM
CO-CHAIR MILLETT suggested that there is no alignment without
the third elements, which are fiscal terms. She questioned
whether the pipeline company really has all it needs up to this
point. Co-Chair Millett said, "You don't have a pipeline
without ... shippers, and you don't have shippers without fiscal
terms, so, I guess the equation in my terms ... the third leg is
missing.
MR. PALMER observed that this subject is a fundamental part of
his presentation to follow. He did point out, however, that
TransCanada is not a party to fiscal matters.
3:23:15 PM
REPRESENTATIVE PETERSEN asked whether the project has moved
ahead of the Mackenzie Delta pipeline.
MR. PALMER opined that the projects are in different stages; the
Mackenzie project has customers, but not regulatory approval,
and the Alaska project needs a FERC certificate and to attract
customers. Thus, the success of both projects relies on
regulatory and commercial breakthroughs. Mr. Palmer returned to
his presentation and pointed out that TransCanada has held a
project Right-of-Way (ROW) through the Yukon since 1983. He
then displayed slide 5 that listed the project's achievements to
this date. Mr. Palmer re-stated his belief that the best way to
complete the project is to align five parties; three North Slope
producers, TransCanada, and the State of Alaska. What has been
achieved so far is that TransCanada and the state aligned in
2008, TransCanada and ExxonMobil aligned in 2009, and
TransCanada and ExxonMobil continue to offer equity positions to
major parties that significantly commit gas in the initial open
season. As of this date, there are no negotiations in progress
with BP or ConocoPhillips. Additional achievements by the
project include the following: initiated the FERC pre-filing
process and interface with the Northern Pipeline Agency (NPA);
commenced negotiations with First Nations in Canada and with
Alaska Native groups; resolved withdrawn partner claims on
previous projects; developed comprehensive Alberta and LNG
alternatives; filed open season plan with FERC; and completed an
in-state gas study.
MR. PALMER displayed a timeline on slide 6 that indicated the
FERC filing [January 29] began a 60-day FERC review for the U.S.
section of the project. After the review, there will be a
public comment period through February 24, and a decision on the
plan is expected by the end of March 2010.
3:30:10 PM
REPRESENTATIVE RAMRAS asked when the state's reimbursement
obligation shifts from 50:50 to 90:10.
MR. PALMER explained if open season is conducted from May
through the end of July, prior to the end of July, the state
will reimburse TransCanada up to 50 percent for prudently
incurred costs. After August 1, the state will reimburse 90
percent of prudent costs up to the cap of $500 million.
REPRESENTATIVE RAMRAS asked whether TransCanada would move
forward with the pipeline project if the state were to terminate
AGIA and ask TransCanada to participate.
3:32:37 PM
MR. PALMER recalled that TransCanada was granted the AGIA
license under established rules that included obligations and
rights for TransCanada. He observed neither TransCanada, nor
the state, possess the right to "unilaterally change the deal."
If the state decides not to proceed, TransCanada would look at
the process used to terminate any arrangement. He opined
TransCanada has met all of its obligations to date and will
continue to do so, and so has the state.
REPRESENTATIVE RAMRAS surmised the parties want the same thing:
a large diameter gas pipeline and all five parties involved. He
asked what TransCanada would do if the state set aside its
obligations under AGIA in order to foster an opportunity for
participation by all five parties. Representative Ramras opined
the benefits to all of the parties would be numerous.
3:35:30 PM
MR. PALMER reminded the committee of the process, beginning with
the 2007 statute, that was available to "all comers" who wished
to participate in the project. TransCanada decided to
participate, filed the required documents, and was subjected to
extensive review by the administration and the legislature. In
addition, TransCanada committed to a schedule and has presented
massive amounts of information to the state for examination.
Its competitors have not been subjected to this review. At the
same time, TransCanada continues to offer equity participation
to the sponsors of its competitor. Furthermore, the schedule of
the project has allowed all of TransCanada's competitors to see
"our entire proposal today, that's an unusual circumstance." He
then remarked:
If the state makes a decision, to go a different
direction, I presume they'll have discussions with
TransCanada as to how they'll proceed.
3:38:45 PM
REPRESENTATIVE RAMRAS said:
What would TransCanada do if the state opted to
terminate its relationship with AGIA? Would you walk
away from the project or is it still appealing, given
that you have peeled so many layers of the onion back
and have expressed a great deal of confidence in the
ability to build out a program ... My interest is in
what posture would TransCanada take if the state
withdrew from AGIA? Would TransCanada still be
interested in this project if it was going forward
with its own dough?
3:39:01 PM
MR. PALMER acknowledged that there are specific circumstances in
AGIA that allow either party to withdraw, and some incur defined
or undefined penalties; however, "TransCanada has not made any
decision ... as to what it would do in that circumstance
because, quite frankly, we have not contemplated it ..." he
said.
3:40:16 PM
MR. PALMER returned to slide 6 and pointed out that the open
season in Alaska will continue concurrently with the Canadian
open season for service to the Alberta Hub. Subsequent to that,
he expects to take the remainder of the year resolving
conditioned bids. He assured the committee that the timeframe
scheduled to resolve conditioned bids is not related to any
political schedule; in fact, the original schedule for open
season was delayed because the administration and legislature
took longer to review TransCanada's application for the AGIA
license. Conversely, if the bids have no conditions, or there
are no bids, TransCanada will not need 100 days to review them.
3:43:25 PM
CO-CHAIR MILLETT asked whether TransCanada has a regulated,
guaranteed rate of return under the AGIA agreement.
MR. PALMER clarified that there is a regulated rate of return,
but not a guaranteed rate of return. In further response to Co-
Chair Millett, he explained the AGIA application had a
"formulated approach for return on equity, which when we filed
would have yielded a 14 percent return on equity.... We're now
offering for customers that commit in the initial open season a
12 percent rate of return."
CO-CHAIR MILLETT then asked whether the reduction is based on
the increase of natural gas from shale in the market.
3:45:00 PM
MR. PALMER agreed that since 2008 oil and gas prices have
fallen, there is an epic financial crisis, and shale gas is a
more significant player in the natural gas market. However,
TransCanada has responded to these additional components of
competition, and has put forward a more competitive proposal
that shifts risk away from customers to the pipeline company.
In fact, TransCanada is "stretching to make the project
advance."
CO-CHAIR MILLETT inquired as to TransCanada's "threshold" and if
the company could adjust its rate of return any more.
3:47:00 PM
MR. PALMER offered to respond to Co-Chair Millett's question
very shortly. He returned attention to Slide 7 that indicated
the project has a comprehensive, credible, and competitive open
season plan. He stated that TransCanada's and ExxonMobil's
expertise is well-known, and highlighted that both companies
move interstate and inter-provincial natural gas, and can get
the regulatory approvals necessary to advance the project. As a
matter of fact, TransCanada moves 20 percent of North America's
gas every day. He opined ExxonMobil's expertise in gas
treatment plants is unmatched; moreover, ExxonMobil brings to
the project, in addition to the producer study conducted in
2001, over one-quarter million hours of work done to complete
the FERC application and to better understand the cost,
complexity, and scope of the project.
3:49:38 PM
MR. PALMER then addressed the question, posed by Co-Chair
Millett, about how the project has responded to competition;
slide 8 displayed the improved commercial terms and access now
offered to parties that commit gas during the initial season.
He explained that this is a discount offered to advance the
project on an expedited basis. Also, TransCanada has proposed
both the comprehensive Alberta and Valdez options. In response
to discussions with shippers, the project designed a 48-inch,
3.0 billion cubic feet per day (Bcf/d) pipeline to Valdez, is
allowing customers to leave the pipeline upstream of the hub,
shortened the minimum contract term to 20-years, offered short-
term, interruptible, overrun, and park-and-loan services, and
offered shared development costs in the event of the termination
of the pipeline. In terms of the discount provided in the
initial open season, TransCanada proposes to improve the tolls
by $500 million per year for 25 years. Referring to the
formulated approach for return on equity in the AGIA
application, Mr. Palmer said that TransCanada now proposes a
fixed 12 percent rate. Further changes to AGIA terms include an
80 percent capital recovery over the initial contract term, and
a 70:30 debt to equity ratio for expansions. He continued to
point out the facets of the improved terms offered by
TransCanada, and explained how these changes lower the toll and
shift risk from the customers to the pipeline company.
3:54:49 PM
REPRESENTATIVE DAHLSTROM asked what the driving force was behind
lowering TransCanada's capital recovery from 100 percent to 80
percent over initial contract term.
MR. PALMER answered that the driving forces were negotiations
with customers and the competitive position of the project. He
then displayed slide 9 that indicated the options for shippers
to choose from in the open season: (1) a pipeline from the North
Slope to Alberta, 4.5 Bcf/d, approximately 1,700 miles long, 48-
inch diameter, with gas delivered to North American markets; (2)
a pipeline from the North Slope to Valdez, 3.0 Bcf/d,
approximately 800 miles long, 48-inch diameter, with gas
converted to liquefied natural gas (LNG) and delivered by ship
to U.S. and international markets. Both options include:
opportunities for Alaskans to take gas off the pipeline at a
minimum of five off-takes in Alaska; a world-class natural gas
treatment plant; and a 58-mile transmission line connecting
natural gas supplies from the Point Thomson field to the plant.
3:58:48 PM
MR. PALMER displayed slide 10 and pointed out that the estimates
shown are "in 2009 dollars." The capital cost of the project
ranges from $32 to $41 billion with a target in-service date of
2020. To address questions about the tariff he stated the
tariff range, including fuel, to the Alberta Hub is from $2.80
to $3.50. Using the U. S. Department of Energy 2010 Annual
Energy Outlook (DOE AEO) forecast, the net-back estimate is from
$3 to $4 per one million Btu (MMBtu) during the 2020 to 2030
timeframe. He opined this estimate makes the project
technically and commercially viable based on current project
cost estimates and price forecasts. To further clarify, he said
net-back is simply the market price less the tariff, from which
producers must "pay their own costs, take their profits, and
share with governments."
REPRESENTATIVE RAMRAS suggested that Mr. Palmer's estimates are
a best case scenario. He asked Mr. Palmer to "re-state that
information for me, and give me the worst case scenario, so that
I can get it like that. What happens if we do peg out at the
highest price, what happens if we have one or two open seasons
that fail, what becomes the in-service date, how much is it
going to cost a leaseholder if they're looking for a market ...
what is that margin if it's the Chicago market and we're on the
lower range of the estimate...?
4:04:44 PM
MR. PALMER responded that he is representing TransCanada's best
estimate as to what it will take to advance the project and the
cooperation that is needed from other parties, including the
state, to succeed. What is presented is the best estimate, not
the best case, of the cost range for the project. In fact,
TransCanada does not have a worst case alternative, or a best
case alternative. In further response to Representative Ramras,
he said the capital cost range produces a tariff range of from
$2.80 to $3.50. Taking the lower end of the Albert Hub gas
price, $6.25, and deducting the higher end of the tariff range,
$3.50, leaves $2.75. The opposite, deducting $2.80 from $7.65,
leaves $4.75. This is still a fair range, between $3 and $4,
with the numbers rounded at both ends. He opined it is not fair
to take the DOE AEO forecast and arbitrarily deduct $1 because
this is an independent forecast that has been used consistently
in front of this committee for four years.
4:08:07 PM
REPRESENTATIVE RAMRAS asked about the tariff to move the gas
from Alberta to the Chicago market.
MR. PALMER said he provided a tariff range and gas price for gas
at the Alberta Hub; there will be an additional tariff to take
the gas to Chicago, although the price of the gas there is
generally higher. Often the higher price is equal to the
additional transportation cost, but it can be higher or lower.
Mr. Palmer called attention to slide 11 that displayed a
comparison of DOE AEO forecasts for Alberta Hub natural gas
prices. He noted that at the time of the AGIA application, the
latest forecast available was dated December 2006. Based on
forecasts through December 2009, the average estimated gas
prices from 2020 to 2030 are: $6.19, $6.33, $7.64, and $6.79.
Slide 12 displayed project cost estimates for the pipeline from
the North Slope to Valdez. The capital cost range is from $20
billion to $26 billion with a targeted in-service date of 2020.
The tariff range including fuel, is from $2.45 to $3.15, but
does not include the cost of liquefaction or shipping to market.
He said he used the Henry Hub index to estimate the gas price;
however, if the gas is shipped to the Costa Azul LNG plant in
Baja California, Mexico, and then back up to San Diego, or Los
Angeles, the $6.75 to $8.15 price is too high. Secondly, in
order to estimate the Asian market, he used DOE AEO estimates
for oil prices. He reasoned that LNG prices in Asia are
adjusted on an oil equivalency basis and provided DOE AEO
forecasts for imported oil prices from December 2006, through
December 2009, on slide 13.
4:15:05 PM
MR. PALMER displayed slide 14 and turned to the subject of the
commercial and regulatory milestones that are needed to bring
the project through the development stage to construction and
in-service. Firstly, TransCanada expects that the bids received
in open season will be conditioned bids; thus it will work with
producers and shippers to resolve any conditions presented.
Secondly, TransCanada needs to move forward with engineering,
environmental, field work, and other work to prepare for major
U.S. and Canadian permitting. In fact, contracts have been
awarded to commence Alaska and Canada field work. TransCanada
will meet its AGIA obligations, including the FERC application
in 2012, and will advance the project in-step with commercial
and regulatory breakthroughs while prudently managing expenses.
Lastly, TransCanada and ExxonMobil will continue to seek
alignment with BP and ConocoPhillips.
4:17:09 PM
CO-CHAIR MILLETT asked whether TransCanada normally adjusts
commercial terms and risk ratios in order to entice producers to
a pipeline project.
MR. PALMER pointed out that the normal procedure would be for
negotiations to be in private-unlike this case-and commercial
terms often get adjusted, sometimes up, and sometimes down. He
acknowledged that he has never seen a $500 million reduction of
the toll, however, this is a massive project, and "that's why
you see such very large numbers on the table." In further
response to Co-Chair Millet, he estimated that the return on
equity on TransCanada's existing, in-the-ground, 50-year
operational pipelines that are regulated by the (Canadian)
National Energy Board, was 8 percent to 9 percent. He reminded
the committee that the aforementioned percentage is a 40 percent
equity ratio on a project that has been in the ground for 50
years, without the risks of completion, development, and
construction. Moreover, if the calculation was "8 and a half on
40 percent, versus the 12 percent on 25, you would actually get
a higher set of tolls."
4:21:08 PM
REPRESENTATIVE DAHLSTROM asked whether TransCanada has received
any response from BP or ConocoPhillips.
MR. PALMER said there have been no negotiations on the project
regarding the offer on equity. He recalled that negotiations
with ExxonMobil began in the fall of 2008, and were not
completed until June 2009. In further response to
Representative Dahlstrom, he said, "To date, they have not been
responsive to our offer."
MR. PALMER continued his presentation and spoke about the
questions raised earlier by Co-Chair Millett. Slide 15
displayed the commercial and regulatory milestones that are
required of other parties for the project to succeed: producers
and shippers must resolve the conditional bids subsequent to the
settlement of fiscal terms with the state as the "sovereign";
production levels must be resolved with the state and the Alaska
Oil and Gas Conservation Commission (AOGCC). TransCanada was
asked "to stay out of those issues" during the AGIA process.
CO-CHAIR MILLETT asked, "Doesn't that put your pipeline in a
very interesting situation?"
MR. PALMER agreed, but advised that pipeline companies are never
a party to upstream fiscal issues. He remarked:
Now, if that is a condition that customers require, in
order to commit to the pipeline, clearly, we want to
see it resolved. But we're not empowered to do
anything about it. We have to implore, ask, folks
like yourselves to decide if you wish to engage.
MR. PALMER, in further response to a follow-up question by Co-
Chair Millett, agreed that TransCanada is positioned between the
state and the producers. Although not identical to the unique
structure of AGIA, a similar situation occurred when there was a
franchise to serve Alberta customers on TransCanada's pipeline
system. At that time, TransCanada was aligned with governments;
in fact, alignment with governments is critical in any basin-
opening situation, like this one.
4:26:23 PM
CO-CHAIR MILLETT asked whether there were other government
entities that had offered TransCanada inducements for pipeline
projects.
MR. PALMER responded that when the original TransCanada pipeline
across Canada was proposed, there was a decade of conflict;
ultimately, the government of Canada invested money and had to
guarantee debt for a portion of the project. Once the project
succeeded, TransCanada repaid the debt, but the government acted
as a financial backstop and made a contribution so that the
pipeline went into service. He concluded that TransCanada has
received inducements before to advance projects.
CO-CHAIR MILLETT remarked:
At a 90:10 sharing of costs, when do you determine
that it's not profitable, and when do you stop? Do
you stop when the $50 million is gone, do you stop
before? ... My fear is, have we now ... positioned you
to a place where you, through the AGIA license, have
to go ahead and continue with ... the project even if
we can all look at it and wonder how anybody is going
to ship gas....
MR. PALMER reflected that the terms are improved since the AGIA
application. He acknowledged that there are provisions for both
parties to withdraw from AGIA under certain circumstances, one
of which is if the parties determine the project is uneconomic.
However, TransCanada does not feel that is the case and has
invested over $60 million since the license was granted. To
date, it has received $1.1 million in reimbursement from the
state. If TransCanada, or the state, sees that the project is
no longer economic there is a vehicle to terminate. He opined
despite skepticism due to recent changes such as shale gas, the
financial crisis, and increased costs, TransCanada and
ExxonMobil believe the project makes sense. If there is no gas
committed, "Then we'll all have to look at the circumstances at
the time, but we're obligated, under AGIA to continue with the
project, unless we feel it's uneconomic, and even if we feel
that, we need your agreement to terminate...."
4:32:59 PM
REPRESENTATIVE RAMRAS expressed his belief that the most
expedient way for Alaska to monetize its gas is for both sides
to withdraw from AGIA, and after the election all five parties
revisit the project. However, at this time he asked Mr. Palmer
about allowable production by AOGCC, and to compare the
nomination of gas to the Valdez or Alberta projects as to the
size of the gas conditioning plant and on the Valdez side, the
cost of the LNG facility and tankers.
MR. PALMER answered that the design option to Alberta is 4.5
Bcf/d and the design option to Valdez is 3.0 Bcf/d. Because
there is insufficient volume for both, he opined the options are
"either or" and customers will choose Alberta or Valdez.
Regarding the gas treatment plant, he confirmed that there will
be a larger volume at the inlet side of the plant for both
options. The volumes going into the plants are higher because
11 percent to 12 percent of CO2 and other impurities are removed
from the Prudhoe Bay gas.
MR. PALMER returned to slide 15. Additional commercial and
regulatory milestones required for the success of the project
are: customers must also arrange downstream transportation,
secure final gas markets, and if needed, secure export permits;
the state must resolve any upstream tax or production issues
with producers and continue to facilitate project permitting;
the U.S. government and FERC must establish the level, terms,
and conditions of the federal loan guarantee and facilitate
project permitting; and the Canadian government, Alaska Natives,
and Canadian First Nations must facilitate project permitting
and align with the project. Slide 16 was a summary of the
presentation. Mr. Palmer reiterated that this is the time for
all of the parties to come together and move the project forward
to success for Alaskans, and for North American and
international markets.
4:40:19 PM
REPRESENTATIVE PETERSEN shared information regarding problems
with shale gas developments such as the amount of water needed
and the subsequent contamination of drinking water. He
cautioned that the future of shale gas is unknown.
MR. PALMER observed that the volumes of shale gas available are
huge. Positive and negative "cards will be played out in the
next few years."
4:42:27 PM
CO-CHAIR EDGMON adjourned the House Special Committee on Energy
meeting at 4:[42] p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| TCPalmerHRES_SRES_SENG_HENG_2_1_2010 FINAL V2[1] [Compatibility Mode].pdf |
HENE 2/2/2010 3:00:00 PM |
|
| Am #5 HB306.pdf |
HENE 2/2/2010 3:00:00 PM |
HB 306 |