Legislature(1999 - 2000)

01/27/2000 01:09 PM House O&G

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
             HOUSE SPECIAL COMMITTEE ON OIL AND GAS                                                                             
                        January 27, 2000                                                                                        
                            1:09 p.m.                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                              
                                                                                                                                
PRESENTATION by Cook Inlet Pipeline Terminus Group                                                                              
                                                                                                                                
TAPE                                                                                                                            
                                                                                                                                
00-7, SIDES A and B                                                                                                             
                                                                                                                                
CALL TO ORDER                                                                                                                   
                                                                                                                                
Representative Whitaker,  Chairman, re-convened the  House Special                                                              
Committee on Oil  and Gas meeting at 1:09 p.m.   [This meeting was                                                              
the third of three held on the same  date.  This third meeting was                                                              
a continuation of the one scheduled for 11:00 a.m.]                                                                             
                                                                                                                                
PRESENT                                                                                                                         
                                                                                                                                
Committee   members   present   at   the  call   to   order   were                                                              
Representatives Dyson,  Phillips, Green, Harris,  Porter, Smalley,                                                              
and Whitaker.                                                                                                                   
                                                                                                                                
SUMMARY OF INFORMATION                                                                                                          
                                                                                                                                
CHAIRMAN WHITAKER introduced Dale  Bagley, Kenai Peninsula Borough                                                              
Mayor,  who  narrated a  visual  presentation  on the  Cook  Inlet                                                              
Pipeline  Terminus  Group's proposal  for  an Alaska  natural  gas                                                              
pipeline terminal at Nikiski on Cook Inlet.                                                                                     
                                                                                                                                
MAYOR BAGLEY began by noting that  there are several proposals for                                                              
natural  gas  projects.   However,  Alaska's  North Slope  has  an                                                              
estimated 35  trillion cubic feet  of natural gas, enough  gas for                                                              
all.                                                                                                                            
                                                                                                                                
Members  of the  Alaska North  Slope Liquefied  Natural Gas  (LNG)                                                              
project  sponsor  group are  ARCO  Alaska, Foothills  Pipe  Lines,                                                              
Ltd.,  Marubeni Corporation,  Phillips Petroleum  Company, and  BP                                                              
Exploration (Alaska)  Inc.  This group  is in the final  months of                                                              
Phase 1 of the  development of a $20 million  construction project                                                              
to bring  Alaskan natural  gas to an  Alaskan port.   This project                                                              
will provide clean energy, clean  industry, and long-term, quality                                                              
jobs for Alaskans.                                                                                                              
                                                                                                                                
The sponsor  group is  considering building  a terminus  either at                                                              
Nikiski  on Cook  Inlet  or  on Anderson  Bay  near  Valdez.   The                                                              
Peninsula  Group supports  the Cook Inlet  location because  there                                                              
are more potential  customers there; the supply of  natural gas is                                                              
not  growing  to   meet  consumer  demand;  and   Alaska  Nitrogen                                                              
Products,  a major employer  on Cook  Inlet, needs  new souses  of                                                              
natural gas.                                                                                                                    
                                                                                                                                
Value-added  processing  of  Alaskan   resources  strengthens  the                                                              
state's  economy.   North Slope  gas provides  an opportunity  for                                                              
value-added   industries.    Those   industries  need   space  for                                                              
facilities, storage, and housing,  and Cook Inlet has the space to                                                              
accommodate  industrial growth.   The  region also  has a  31-year                                                              
relationship   with  the  natural   gas  industry,   resulting  in                                                              
infrastructure, a trained workforce, and market experience.                                                                     
                                                                                                                                
MAYOR  BAGLEY concluded  that  all of  Alaska  would benefit  from                                                              
locating the gas pipeline terminus at Cook Inlet.                                                                               
                                                                                                                                
In a question-and-answer session following the presentation,                                                                    
Mr. Bagley provided additional information including:                                                                           
                                                                                                                                
Having BP Exploration (Alaska) Inc.  as a member of the Cook Inlet                                                              
Pipeline  Terminus  Group  strengthens  chances  of  the  proposal                                                              
coming to fruition.                                                                                                             
                                                                                                                                
If  a port  authority  approach provides  economic  benefits to  a                                                              
gasoline project,  it will  work wherever  a gas line  terminates.                                                              
The relationship  of the state to  any port authority needs  to be                                                              
clearly spelled out because there are economic trade-offs.                                                                      
                                                                                                                                
No  matter which  route the  pipeline  takes, there  will be  some                                                              
permitting  and  environmental hurdles  to  overcome.   There  are                                                              
already  rights of  way for  the  railroad and  highway along  the                                                              
railbelt route  that could minimize  the impacts of a  pipeline in                                                              
that area.   However, this is  a long-term project  with long-term                                                              
economic benefits, and any initial  obstacles should be weighed in                                                              
relation to that.                                                                                                               
                                                                                                                                
All  Alaskans   should  get  behind  the  gas   pipeline  project,                                                              
whichever route is chosen, as all Alaskans will benefit.                                                                        
                                                                                                                                
COMMITTEE ACTION                                                                                                                
                                                                                                                                
The committee took no action.                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                     
                                                                                                                                
The meeting was adjourned at 1:35 p.m.                                                                                          
                                                                                                                                
NOTE:   The meeting  was recorded and  handwritten log  notes were                                                              
taken.   A  copy of  the tape  and log  notes may  be obtained  by                                                              
contacting the House Records Office  at 129 6th Street, Suite 229,                                                              
Juneau, Alaska  99801-2197, (907)  465-2214, and after adjournment                                                              
of  the   second  session   of  the   Twenty-first  Alaska   State                                                              
Legislature  this information  may be obtained  by contacting  the                                                              
Legislative Reference Library at  129 6th Street, Suite 102, (907)                                                              
465-3808.                                                                                                                       
                                                                                                                                

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