Legislature(2007 - 2008)SENATE FINANCE 532
03/21/2007 05:30 PM House OIL & GAS
| Audio | Topic |
|---|---|
| Start | |
| HB177|| SB104 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 177 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
JOINT MEETING
HOUSE SPECIAL COMMITTEE ON OIL AND GAS
SENATE RESOURCES STANDING COMMITTEE
March 21, 2007
5:39 p.m.
MEMBERS PRESENT
HOUSE OIL AND GAS
Representative Vic Kohring, Chair
Representative Kurt Olson, Vice Chair
Representative Nancy Dahlstrom
Representative Jay Ramras
Representative Ralph Samuels
Representative Mike Doogan
Representative Scott Kawasaki
SENATE RESOURCES
Senator Charlie Huggins, Chair
Senator Bert Stedman, Vice Chair
Senator Lyda Green
Senator Gary Stevens
Senator Lesil McGuire
Senator Bill Wielechowski
MEMBERS ABSENT
HOUSE OIL AND GAS
All members present
SENATE RESOURCES
Senator Tom Wagoner
COMMITTEE CALENDAR
HOUSE BILL NO. 177
"An Act relating to the Alaska Gasline Inducement Act;
establishing the Alaska Gasline Inducement Act matching
contribution fund; providing for an Alaska Gasline Inducement
Act coordinator; making conforming amendments; and providing for
an effective date."
- HEARD AND HELD
SENATE BILL NO. 104
"An Act relating to the Alaska Gasline Inducement Act;
establishing the Alaska Gasline Inducement Act matching
contribution fund; providing for an Alaska Gasline Inducement
Act coordinator; making conforming amendments; and providing for
an effective date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 177
SHORT TITLE: NATURAL GAS PIPELINE PROJECT
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
03/05/07 (H) READ THE FIRST TIME - REFERRALS
03/05/07 (H) O&G, RES, FIN
03/06/07 (H) O&G AT 3:00 PM BARNES 124
03/06/07 (H) -- MEETING CANCELED --
03/08/07 (H) O&G AT 3:00 PM BARNES 124
03/08/07 (H) -- MEETING CANCELED --
03/13/07 (H) O&G AT 3:30 PM HOUSE FINANCE 519
03/13/07 (H) Heard & Held
03/13/07 (H) MINUTE(O&G)
03/15/07 (H) O&G AT 3:00 PM BARNES 124
03/15/07 (H) Heard & Held
03/15/07 (H) MINUTE(O&G)
03/19/07 (H) O&G AT 8:30 AM CAPITOL 106
03/19/07 (H) Heard & Held
03/19/07 (H) MINUTE(O&G)
03/20/07 (H) O&G AT 3:00 PM BARNES 124
03/20/07 (H) Heard & Held
03/20/07 (H) MINUTE(O&G)
03/21/07 (H) O&G AT 5:30 PM SENATE FINANCE 532
BILL: SB 104
SHORT TITLE: NATURAL GAS PIPELINE PROJECT
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
03/05/07 (S) READ THE FIRST TIME - REFERRALS
03/05/07 (S) RES, JUD, FIN
03/14/07 (S) RES AT 3:30 PM BUTROVICH 205
03/14/07 (S) Heard & Held
03/14/07 (S) MINUTE(RES)
03/16/07 (S) RES AT 3:30 PM BUTROVICH 205
03/16/07 (S) Heard & Held
03/16/07 (S) MINUTE(RES)
03/19/07 (S) RES AT 3:30 PM BUTROVICH 205
03/19/07 (S) Heard & Held
03/19/07 (S) MINUTE(RES)
03/21/07 (S) RES AT 5:30 PM SENATE FINANCE 532
WITNESS REGISTER
JERRY MCCUTCHEON
Anchorage, Alaska
POSITION STATEMENT: During the hearing on HB 177, testified
against the construction of a gas pipeline.
PAUL LAIRD, General Manager
Alaska Support Industry Alliance ("Alliance")
Anchorage, Alaska
POSITION STATEMENT: Testified on HB 177 and SB 104.
DONALD BENSON
Palmer, Alaska
POSITION STATEMENT: Speaking on his own behalf during the
hearing on HB 177, testified in support of the Alaska Gasline
Inducement Act (AGIA).
Karen Rhoades
Wasilla, Alaska
POSITION STATEMENT: Speaking on her own behalf during the
hearing on HB 177, testified in support of AGIA.
JOHN BROWN, Field Representative
International Union of Operating Engineers (IUOE), Local 302
Fairbanks, Alaska
POSITION STATEMENT: During the hearing on HB 177, testified on
AGIA.
GEORGE BERRY
Fairbanks, Alaska
POSITION STATEMENT: Speaking on his own behalf during the
hearing on HB 177, testified in support of adding a project
labor agreement to AGIA.
TAMMIE WILSON
Fairbanks, Alaska
POSITION STATEMENT: Speaking on her own behalf during the
hearing on HB 177, testified in support of adding a project
labor agreement to AGIA.
DAN WARD, Member
IUOE, Local 302
Fairbanks, Alaska
POSITION STATEMENT: Speaking on his own behalf during the
hearing on HB 177, testified in support of adding a project
labor agreement to AGIA.
PAUL D. KENDALL
Anchorage, Alaska
POSITION STATEMENT: Speaking on his own behalf, testified on HB
177 and SB 104.
DAVID GOTTSTEIN, Co-Chair
Backbone Campaign
Anchorage, Alaska
POSITION STATEMENT: During the hearing on HB 177, testified in
support of AGIA.
STEVE JOSWIAK, President
Central Labor Council
Fairbanks, Alaska
POSITION STATEMENT: During the hearing on HB 177, testified in
support of adding a project labor agreement to AGIA.
KEVIN POMEROY, Member
Laborers Local 942
Fairbanks, Alaska
POSITION STATEMENT: Speaking on his own behalf during the
hearing on HB 177, testified in support of adding a project
labor agreement to AGIA.
CAROL HETTER, Member
Laborers Local 942
Fairbanks, Alaska
POSITION STATEMENT: Speaking on her own behalf during the
hearing on HB 177, testified in support of adding a project
labor agreement to AGIA.
TIM SHARP, Business Manager
Alaska District Council of Laborers;
Business Manager
Laborers Local 942
Fairbanks, Alaska
POSITION STATEMENT: During the hearing on HB 177, testified in
support of AGIA, and to the addition of a project labor
agreement.
REE KISSINGER, Apprentice
International Brotherhood of Electrical Workers Local 1547
Fairbanks, Alaska
POSITION STATEMENT: Speaking on his own behalf during the
hearing on HB 177, testified in support of adding a project
labor agreement of AGIA.
DIANA SMITH, Member
Alaska State Employees Association (ASEA)
Fairbanks, Alaska
Position Statement: Speaking on her own behalf during the
hearing on HB 177, testified in support of union and Alaskan
hire.
SUZANNA BOBINSKI, Member
Alaska State Employees Association (ASEA)
Fairbanks, Alaska
POSITION STATEMENT: Speaking on her own behalf during the
hearing on HB 177, testified in support of union and Alaskan
hire.
JAMIE BASSETT, Member
Alaska State Employees Association (ASEA) Local 52
Fairbanks, Alaska
POSITION STATEMENT: Speaking on her own behalf during the
hearing on HB 177, testified in support of a project labor
agreement for the gas pipeline project.
WILLIAM HUNT
Fairbanks, Alaska
POSITION STATEMENT: During the hearing on HB 177, testified in
support of a project labor agreement for the gas pipeline
project.
MICHAEL COELHO
Fairbanks, Alaska
POSITION STATEMENT: During the hearing on HB 177, testified in
support of a project labor agreement for the gas pipeline
project.
KATIE MACKINNON, Member
Alaska State Employees Association
Fairbanks, Alaska
POSITION STATEMENT: Speaking on her own behalf during the
hearing on HB 177, testified in support of Alaska's use of its
resources.
BILL JOHNSON Member
Laborers;
Member
American Federation of State, County, and Municipal
Fairbanks, Alaska
POSITION STATEMENT: Speaking on his own behalf during the
hearing on HB 177, testified in support of a project labor
agreement for gas pipeline project.
VINCE BELTRAMI, President
Alaska American Federation of Labor and Congress of Industrial
Organizations (AFL-CIO)
Anchorage, Alaska
POSITION STATEMENT: During the hearing on HB 177, testified in
support of a project labor agreement for the gas pipeline
project.
DANIEL O'LEARY, Business Agent
Iron Workers Local 751
Fairbanks, Alaska
POSITION STATEMENT: Testified on HB 177 and SB 104.
DUFFY HALLADAY, Member
Laborers International Local 942
Fairbanks, Alaska
POSITION STATEMENT: Speaking on his own behalf during the
hearing on HB 177, testified in support of a project labor
agreement for the gas pipeline project.
GERALD KW BROWN
Fairbanks, Alaska
POSITION STATEMENT: During the hearing on HB 177, testified in
support of local hire for the Alaska gas pipeline project.
W. T. REEVES
Fairbanks, Alaska
POSITION STATEMENT: Asked a question about the Dalton Highway;
testified on HB 177 and SB 104.
MERRICK PIERCE
North Pole, Alaska
POSITION STATEMENT: Testified on HB 177 and SB 104.
ACTION NARRATIVE
CHAIR CHARLIE HUGGINS called the joint meeting of the House
Special Committee on Oil and Gas and the Senate Resources
Standing Committee to order at 5:39:15 PM. Present at the call
to order from the House Special Committee on Oil and Gas were
Representatives Samuels, Doogan, Kawasaki, Olson, and Kohring;
Representatives Dahlstrom and Ramras arrived as the meeting was
in progress. Present from the Senate Resources Standing
Committee were Senators Green, Stedman, and Huggins; Senators
Stevens, McGuire, and Wielechowski arrived as the meeting was in
progress.
HB 177-NATURAL GAS PIPELINE PROJECT
SB 104-NATURAL GAS PIPELINE PROJECT
5:39:44 PM
CHAIR HUGGINS announced that the only order of business would be
SENATE BILL NO. 104, "An Act relating to the Alaska Gasline
Inducement Act; establishing the Alaska Gasline Inducement Act
matching contribution fund; providing for an Alaska Gasline
Inducement Act coordinator; making conforming amendments; and
providing for an effective date;" and HOUSE BILL NO. 177, "An
Act relating to the Alaska Gasline Inducement Act; establishing
the Alaska Gasline Inducement Act matching contribution fund;
providing for an Alaska Gasline Inducement Act coordinator;
making conforming amendments; and providing for an effective
date."
CHAIR HUGGINS invited public testimony on HB 177 and SB 104.
5:40:55 PM
JERRY MCCUTCHEON told the committees that had the gas pipeline
been constructed in the 1980s, Prudhoe Bay, as we know it, would
not exist. He continued to say:
And more than half of the state's revenue would be
missing. That admission came out of the Murkowski
Administration. Prudhoe Bay has produced more than
five billion barrels more oil than Prudhoe Bay would
have produced had the oil companies constructed the
gas line back in the 1980s. ... The same parameters
applied in the "80s still apply today, and will
continue to apply for another decade, maybe two or
three more decades. ... It is the decline in gas
pressure that is causing the decline in oil recovery.
There is more oil to be produced from Prudhoe Bay than
has been produced. There's another 15 billion barrels
of recoverable oil but nobody really wants to talk
about and the gas is needed to obtain that oil. ...
The Mackenzie River gas line costs escalated ... to
$16 billion [Canadian dollars]. ... That gas line was
the one they used as an analogous example by Pedro van
Meurs. So we have a total increase of 300 percent,
that would make the gas line, Alcan gas line, from $20
[billion] to $60 billion. ... Larry Persily, when he
was deputy commissioner of Revenue, told LBA,
Legislative Budget and Audit, in 2004, that the
alleged 35 Tcf would only sustain the four and one-
half billion cubic feet per day Alcan gas line for a
little over a decade. The oil companies really needed
60 cubic per day. The North Slope does not have the
35 Tcf, only 29. The [Alaska] Oil & Gas Conservation
Commission said that the other reservoirs, which they
had counted in the 35 Tcf, are not available because
gas withdrawal from them would cause serious loss of
oil recovery. Thus, only Prudhoe Bay and Point
Thomson are available for gas withdrawal. ...
Premature gas withdrawal for a gas line also applies
to Point Thomson. In the case of Prudhoe Bay, gas
recycling ... may have to continue for several more
decades for oil production to be reasonably complete.
... In the case of Point Thomson, after the litigation
is settled, it will be more than a decade before the
production of Point Thomson gas liquids can start. ...
Gas will have to be recycled for as much as a decade
to prevent retrograde condensation of the gas liquids
and oil condensates ... before Point Thomson's gas can
be produced for a gas line.
5:45:37 PM
PAUL LAIRD, General Manager, Alaska Support Industry Alliance
("Alliance"), said that the "Alliance" are the companies that
provide oil producers with the goods and services that make
Alaska's oil, gas, and mining industries possible. The
"Alliance's" 400 member companies generate more than 30,000 jobs
for Alaskans. Mr. Laird said that the "Alliance" is working
hard to understand the details and implications of the Alaska
Gasline Inducement Act (AGIA), and it is concerned about the
$500 million state matching contribution. He remarked:
It's unnecessary and it may not be the best use of
state funds. We're concerned about any provision that
transforms pretenders into contenders by conceding ...
a licensee without financial backing at the time of
certification or additional years to sanction a
project. By the administration's timetable for
certification, this could delay first gas sales until
the early to mid 2020s. The "Alliance" believes in
having a level playing field for all applicants, but
we oppose provisions that promote artificial parody
among the players. Alaska's interests are best served
if the most competitive project is built by the
strongest developer. We're concerned that there are
no objective criteria for judging, for weighing the
relative importance of various elements of the
application, assessing the risks associated with each
proposal, and making the selection in an open, fair,
and transparent manner. We're concerned about any
process mandating the state to choose a winner and
promote a monopoly at the expense of other prospective
developers. ... Once the state chooses a licensee to
build a pipeline, will the producers come to the open
season? We believe the bill, as currently drafted,
puts too much emphasis on the short term risk of
pipeline builders, and does too little to address the
long term risks of shippers. Upstream issues ... need
to be resolved first, if Alaska truly wants North
Slope producers to commit their gas to a project. ...
We look forward to working with you and with the
governor and her team to help transform Alaska's gas
into decades of clean, reliable, domestic energy for
Americans, and generations of prosperity for Alaskans.
5:49:17 PM
DONALD BENSON, said he is a life-long Alaskan, and would like to
encourage the legislature to support AGIA, with the addition of
take-off points that include Alaska's cities and villages. Mr.
Benson said that natural gas is the cleanest and most reliable
type of heat and can be backed with hydroelectric, wind, and
solar [energy]. He stressed that gas prices have risen in the
past years, and that Alaska needs to bring its gas home. It is
an investment in Alaska and in the United States, Mr. Benson
said.
5:51:04 PM
KAREN RHOADES, said she wanted to give her opinion, as a
constituent. She told the committees that when she and her
husband started their small business, they took a significant
risk; they weighed the pros and cons and decided that the
potential for success was worth taking the risk. She said she
believes that the $500 million incentive is worth the risk and
is essential to the success of the project. She said that she
questioned the opinions of those who compare AGIA to previous
failed projects. This project is needed by the nation, and she
said that she trusts the ability of the state to choose a
builder and make good decisions. Ms. Rhodes said that this is a
step in Alaska's destiny, and she would like to see the
legislature go forward with this plan.
5:53:41 PM
JOHN BROWN, International Union of Operating Engineers, Local
302, said that Alaska's natural gas has the potential to secure
our economic future, and he supported the governor's efforts to
cause a pipeline to be constructed. However, we should do a
better job than we did on the Trans-Alaska Pipeline System
(TAPS). He said that he agreed with the inclusion of everything
the state needs from the project in the bill. Mr. Brown
emphasized that we need a low tariff to ensure that Alaska
receives fair compensation for its resource and that independent
companies can afford to ship their gas in the pipeline. One of
the ways to ensure a low tariff is not addressed in AGIA, and
that is to ensure a steady productive, and predictive, cost and
supply of labor. By including the requirement for a negotiated
project labor agreement in the bill, we can ensure labor
stability through a no-strike, no-lockout provision. We can
also be sure of a competent and trained workforce. Mr. Brown
urged members of the committee to include the requirement for a
licensee to commit to negotiate a project labor agreement, for
construction of the pipeline, and all related infrastructure.
5:56:10 PM
GEORGE BERRY stated that he was a member of Local 959, but he is
testifying on his own behalf. He said that he supports AGIA
legislation for its overall imaginative approach to get new
producers on the North Slope for the development of gas
production. However, he also supports the addition of a project
labor agreement that can bring predictive labor costs, maximum
Alaska hire, and training programs to the project. Mr. Berry
said that after 30 years of working on TAPS, he feels that the
prior labor agreement was the best benefit to Alaskans.
5:58:08 PM
TAMMIE WILSON said she likes the fact that AGIA requires the
project winner to locate its local headquarters in Alaska.
However, it does not specify where the hiring halls would be
located. She said:
I am very concerned about section number 15 that
addresses the actual number of Alaskans to be hired.
This part states the project winner will commit to
hire qualified residents from throughout the state for
management, engineering and other things, and contract
with businesses located in this state to the extent
permitted by law. I asked [Tom Irwin, Commissioner,
Department of Natural Resources (DNR)] what the number
was and they told me that was "zero." So, if the
actual number is zero, why is this statement even part
of the bill? ... It was also stated that the reason
there was no project labor agreement ... was that they
were looking for workers to not just have jobs, but
careers in the oil industry. And they will take care
of labor issues later. ... Unions are careers. ... To
those of us in Fairbanks, this is the real issue.
When Marcia Davis came here, from the Department of
Revenue, she said, "We have specifically not addressed
whether there's a project labor agreement in this
structure, and I know that is an area of concern for
many of those in Fairbanks. ... And the strongest
applications are going to be the ones that ... Alaskan
hire. ... This is going to be an Alaskan state
controlled job development so this is going to be done
within our Department of Administration." ... [We are]
asking you to make sure that Alaskans are truly the
first priority for these jobs. ... There are men and
women [here] of all ages to show how important this
issue is to this community. Please protect jobs for
Alaskans by putting in strong language that lets all
those, that will submit an application, know that if
they do not hire Alaskans they will not be the ones
chosen for this project.
6:00:52 PM
DAN WARD said that he was testifying in support of his union,
IUOE, Local 302, and to show his support of AGIA, and the
addition of a project labor agreement.
6:01:25 PM
PAUL D. KENDALL said he was speaking as a citizen, and was
encouraged to see a project of such magnitude discussed in an
open and honest modality. Mr. Kendall said that he was
convinced that the construction of two separate pipelines needs
to be addressed. The Canadian gas pipeline, when looked at for
the next 15 years, is a tremendous gamble because the producers
and the state can not know what will happen to future markets,
applications, and prospectives. Mr. Kendall said that we also
need to look at a sovereign gas pipeline leading to the people
of Alaska. Because of the amount of time it will take for the
gas to be flowing through the big line, he suggested, it would
be better to run a small line to move the gas to Fairbanks
immediately. He also noted that the large producers are not at
the table, in an open and frank manner of partnership, promising
that their in-kind gas is available to Alaska at this time. He
continued to say:
First, I hope you'll give the opportunity to any
testifier or [Request for Proposal] proposal person to
swear themselves in, in some gauge of testimony. ...
It is my belief that Alaska should own and control
12.5 percent of the station's spherical content of the
pipeline. Any pipeline that leaves any field, we
should ... tie that in as an unrelinquished position
that we own the space within the pipeline. ... This
should be a proprietary right and it gives us a
multitude of avenues to participate and to authorize
and to gauge what is happening....
6:04:50 PM
DAVID GOTTSTEIN, Co-Chair, Backbone Campaign, said that he is
here today to encourage the committee to complete the task of
refining and passing AGIA. He stated that AGIA is an excellent
platform for marketing Alaska's gas, offers a competitive
framework, and outlines criteria that are values to the state
and residents. He cautioned against endless debate and opined
that the $500 million incentive is not a give-away, but is an
important component that reduces the risk and increases the
value of project. Mr. Gottstein said that the state should get
more from a competitive bidding process. The Backbone Campaign,
he continued, believes that the bids should include time
commitments, and that time extensions are not necessary. He
further cautioned against adding language to AGIA that will
prevent passage of the bill, and thereby, work in ExxonMobil
Corporation's favor.
6:07:46 PM
STEVE JOSWIAK, Central Labor Council, asked the committee to
consider a project labor agreement for a sustainable Alaska
workforce. He said that a labor agreement benefits all
Alaskans, and that its inclusion worked successfully for the oil
pipeline.
KEVIN POMEROY said that he is a member of Laborers Local 942,
and that he believes it is important to include the language of
a project labor agreement in AGIA. In his experience, he said,
many laborers immediately leave Alaska at the end of their
employment. A project labor agreement would ensure that
Alaskans are working and that wages stay in the local economy.
CAROL HETTER said she is in support of adding language [to AGIA]
for a project labor agreement. She emphasized that she did not
feel this addition would complicate the bill.
TIM SHARP, Business Manager, Alaska District Council of
Laborers; Business Manager, Laborers Local 942, stated that the
Alaska District Council of Laborers is comprised of 5,000
construction workers, and that Laborers Local 942 represents
1,300 pipeline building trades and heavy highway workers.
Laborers, he said, want to be on record with their support of
AGIA, and of a square deal for Alaskan workers through a project
labor agreement. We want to avoid the present scenario where
workers fly from out-of-state to jobs in the Alaskan oil fields.
Mr. Sharp said that the main piece missing from AGIA is to
enforce residency, and a preference for Alaskan hire, through a
project labor agreement (PLA). Mandating a PLA in AGIA will
insure that Alaskan workers will be dispatched through Alaskan
hiring halls, Alaskan apprentices will be afforded opportunities
to learn their craft, and that wages for medical and retirement
benefits will stay in Alaska. A PLA can also include
enforceable Alaska Native hire provisions to help address the
problem of the 85 percent unemployment rate in some Alaskan
villages. Mr. Sharp concluded by encouraging the committees to
make sure that a PLA is in place, as a part of AGIA, to ensure
that Alaskan workers receive the maximum benefit possible for
the development of Alaskan resources.
6:13:28 PM
REE KISSINGER, said that he is an apprentice with International
Brotherhood of Electrical Workers (IBEW), Local 1547, and that
he fully supports a PLA agreement through hiring hall systems
and local hire.
6:13:58 PM
DIANA SMITH said she is a member of Alaska State Employees
Association (ASEA) and is in support of union hire and Alaskan
hire.
6:14:20 PM
SUZANNA BOBINSKI said that she is a member of ASEA and a
resident of Fairbanks. She said she is in favor of local and
Alaskan hire.
6:14:43 PM
JAMIE BASSETT said that she is a member of ASEA, Local 52, and
that she was born and raised in Alaska. She said that she fully
supports the project labor agreement and that Alaskans are
qualified for, and deserve, these jobs.
6:15:40 PM
WILLIAM HUNT testified that he is an Alaska resident of 25
years, and he supports a project labor agreement to ensure
future employment for the next generation.
6:15:58 PM
MICHAEL COELHO said that he is testifying to support a PLA and
local hire so that he may retire, in Alaska, someday.
6:16:16 PM
KATIE MACKINNON testified that she is a member of ASEA. She
said that, in her experience as an eligibility technician for
the Division of Public Assistance, she knows that people living
in Alaska are looking for jobs, and Alaska needs to use its
resources.
6:16:51 PM
BILL JOHNSON, Member, Laborers; Member, American Federation of
State, County and Municipal Employees, said that he is a life-
long resident of Alaska, and that he works for ASEA. He voiced
his support for a project labor agreement that will maximize the
benefits of resource development to the state, and keep wages in
the local economy.
VINCE BELTRAMI, President, Alaska AFL-CIO, stated that he
believes the gas pipeline is the most critical issue facing the
state. He said:
AFL represents about 60,000 members in the state of
Alaska, 15,000, or so, of which are the building
trades members. ... In the governor's bill a couple
of the main tenets she outlined in her transmittal
letter to Senator Green, of the six primary goals, and
the sixth was to ensure Alaskans are trained and ready
for the jobs and that those jobs are made available to
Alaskans. And in the bill under section 43.90.140 ...
addresses the hiring qualified residents.... To most
easily comply with that requirement and for
predictability in planning the construction,
scheduling labor needs, safety programs, and a plan
... to begin training Alaskans for a project a few
years down the road, it's imperative for the project
to be constructed under the terms of a PLA. This will
take the guesswork out of the requirements the
governor seeks, in regards to local hire and workforce
readiness, it will add predictability and stability to
the project. ... In cases of extremely large
construction projects ... PLAs have some validity. ...
Eighty-five percent of [the heavy and highway
construction workers] are represented by unions. And
of the federally registered apprentices in Alaska, 85
percent are enrolled in our union apprenticeship
programs. And, through the terms of a PLA, all
qualified residents would have access to working on
this job under a PLA, irrespective of their union
affiliation or not. And we've also established
connections into rural Alaska ... through the union
apprenticeship program and the efforts of Alaska Works
[Initiative], ... [to] motivate Alaska Natives to
enter our programs. ... The U.S. Congress stated, ...
when [it] passed the Alaska Natural Gas Pipeline Act
[of 2002](ANGPA) ... that [the pipeline] would provide
significant economic benefits, and to maxify, maximize
those benefits, excuse me, that a project labor
agreement should be used. ... Also, in ANGPA, in the
statute, there is already a PLA provision in there.
... In summary, I'd [respectfully] ask that you
consider amending the act to include the provisions of
a project labor agreement between the successful
applicants, and the Alaska Building and Construction
Trades Council, for the maximum benefit of all
Alaskans.
6:22:16 PM
DANIEL O'LEARY stated that the number one issue is to have
Alaskan hire and a PLA on the gas pipeline. He said Alaskans
are demanding a PLA, and want to see the pipeline project
proceed.
6:23:00 PM
DUFFY HALLADAY said that he lived for the last 16 years in Nome.
He previously worked on TAPS and noted that many of his co-
workers lived out-of-state. Mr. Halladay said that he hoped
Alaskans would benefit from the gas pipeline construction jobs.
He also said that he felt Alaska hire can be negotiated into the
construction contract.
6:27:07 PM
GERALD KW BROWN said that he felt AGIA is very important, but
that the lack of an Alaska hire provision is a glaring error.
Presently, oil field workers live outside and do not contribute
to the growth of the state. He urged the legislature to include
monitoring criteria for the project to ensure that Alaska hire
is maintained throughout the life of the pipeline.
6:28:55 PM
W.T. REEVES informed the committees that he has been trying, for
30 years, to open the last eight miles of the [Dalton Highway].
He has been told that the road can not be completely opened due
to the pressure on the wells, and asked if that information was
correct. He also questioned the wisdom of constructing a
smaller diameter gas pipeline.
6:30:19 PM
MERRICK PEIRCE asked the legislature to follow Governor Palin's
lead on AGIA. One of the cornerstones of the governor's effort
to build the gas pipeline for Alaska is to level the playing
field for all the parties competing in this process. Mr. Peirce
remarked:
What we will see, I predict, after the governor's AGIA
is passed by the legislature, is that when all of the
proposals are evaluated, you will see something that
is readily apparent to many Alaskans. ... The major
oil producers not only do not want to see a gas
pipeline built, they don't want anybody else to build
one either. To amortize the cost of a $38 billion
[Alaska] Highway project, the producers would have to
flood the Lower 48 market with natural gas. That
would then shift the supply and demand equilibrium
heavily in favor of the consumers. ... It is
illustrative to see how profitable the limitation of
oil supplies has been for the producers due to the
disruption in oil supplies from Iraq. ... Of course,
the consequence is record high oil prices and record
profits for [ExxonMobil Corporation] and the other
major producers as well as the [Organization of
Petroleum Exporting Countries] members, because supply
is limited. ... It was also illustrative, and frankly
embarrassing, to watch Frank Murkowski and some of the
oil industry [indisc.] supporters within the
legislature attempt and fail to craft an ... agreement
with the producers, a deal the producers walked away
from, in spite of the fact that Murkowski offered
generous and unconstitutional giveaways. ... A lot of
us will be watching carefully as the oil industry
lobbyists ... try to get you to craft exclusionary
language to keep the various voter approved entities
like ANGA and [Alaska Gasline Port Authority] from
being able to compete under AGIA. ... This legislature
should try to get a handle on [Federal Energy
Regulatory Commission] jurisdiction now. ... So that
the ... gas pipeline project isn't delayed later on by
FERC jurisdictional issues.
[HB 177 and SB 104 were held over.]
6:33:47 PM
ADJOURNMENT
The Senate Resources Standing Committee was recessed at 6:35
p.m., to be continued at 4:00 p.m. on March 22, 2007. [The
House Special Committee on Oil and Gas was adjourned at 6:35
p.m.]
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