Legislature(2015 - 2016)BUTROVICH 205
03/30/2015 03:30 PM Senate RESOURCES
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing: Alaska Gasline Development Corporation: Board of Directors | |
| SB70 | |
| SB50 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 70 | TELECONFERENCED | |
| SB 50 | |||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
March 30, 2015
3:30 p.m.
MEMBERS PRESENT
Senator Cathy Giessel, Chair
Senator Mia Costello, Vice Chair
Senator John Coghill
Senator Bert Stedman
Senator Bill Stoltze
Senator Bill Wielechowski
MEMBERS ABSENT
Senator Peter Micciche
COMMITTEE CALENDAR
CONFIRMATION HEARING
Alaska Gasline Development Corporation: Board of Directors
Joe Paskvan
- CONFIRMATION ADVANCED
SENATE BILL NO. 70
"An Act relating to exceptions from designation as a special
purpose site under art. VIII, sec. 7 of the Constitution of the
State of Alaska for portions of Denali State Park, Captain Cook
State Recreation Area, Nancy Lake State Recreation Area, and
Willow Creek State Recreation Area to allow leasing a right-of-
way for a natural gas pipeline."
- MOVED CSSB 70(RES) OUT OF COMMITTEE
SENATE BILL NO. 50
"An Act relating to the programs and bonds of the Alaska
Industrial Development and Export Authority; related to the
financing authorization through the Alaska Industrial
Development and Export Authority of a liquefied natural gas
production plant and natural gas energy projects and
distribution systems in the state; amending and repealing bond
authorizations granted to the Alaska Industrial Development and
Export Authority; and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 70
SHORT TITLE: GAS PIPELINE RIGHT-OF-WAY;PARKS;REFUGES
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
03/06/15 (S) READ THE FIRST TIME - REFERRALS
03/06/15 (S) RES, FIN
03/09/15 (S) RES AT 3:30 PM BUTROVICH 205
03/09/15 (S) Heard & Held
03/09/15 (S) MINUTE(RES)
03/30/15 (S) RES AT 3:30 PM BUTROVICH 205
BILL: SB 50
SHORT TITLE: AIDEA: BONDS;PROGRAMS;LOANS;LNG PROJECT
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/11/15 (S) READ THE FIRST TIME - REFERRALS
02/11/15 (S) NRG, RES, FIN
03/10/15 (S) NRG AT 3:30 PM BELTZ 105 (TSBldg)
03/10/15 (S) Heard & Held
03/10/15 (S) MINUTE(NRG)
03/26/15 (S) NRG AT 3:30 PM BELTZ 105 (TSBldg)
03/26/15 (S) Moved CSSB 50(NRG) Out of Committee
03/26/15 (S) MINUTE(NRG)
03/27/15 (S) NRG RPT CS 3DP 1NR SAME TITLE
03/27/15 (S) DP: EGAN, BISHOP, HOFFMAN
03/27/15 (S) NR: MICCICHE
03/30/15 (S) RES AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
JOE PASKVAN, Appointee
Board of Directors
Alaska Gasline Development Corporation
Fairbanks, Alaska
POSITION STATEMENT: Testified as appointee to the Alaska
Gasline Development Corporation Board of Directors.
BEN ELLIS, Director
Division of Parks and Outdoor Recreation
Department of Natural Resources (DNR)
Juneau, Alaska
POSITION STATEMENT: Explained SB 70.
DON PERRIN, Acting Director
State Pipeline Coordinator's Office
Department of Natural Resources (DNR)
Anchorage, Alaska
POSITION STATEMENT: Commented on SB 70.
GENE THERRIAULT, Deputy Director
Alaska Energy Authority (AEA)
Fairbanks, Alaska
POSITION STATEMENT: Commented on SB 50.
FRED PARADY, Deputy Commissioner
Department of Commerce, Community and Economic Development
Juneau, Alaska
POSITION STATEMENT: Commented on SB 50.
ACTION NARRATIVE
3:30:41 PM
CHAIR CATHY GIESSEL called the Senate Resources Standing
Committee meeting to order at 3:30 p.m. Present at the call to
order were Senators Coghill, Costello, Stedman, and Chair
Giessel.
^Confirmation Hearing: Alaska Gasline Development Corporation:
Board of Directors
Confirmation Hearing: Alaska Gasline Development Corporation:
Board of Directors
3:31:27 PM
CHAIR GIESSEL announced the confirmation hearing for Joe Paskvan
to the Alaska Gasline Development Corporation (AGDC) Board of
Directors.
3:32:46 PM
SENATOR WIELECHOWSKI joined the committee.
CHAIR GIESSEL reviewed the governing statute, AS 31.25.020, for
appointments to the AGDC. She said it is a public member seat
and there are five public members. The appointees should have
experience and expertise in natural gas pipeline construction,
operation and marketing, finance, large project management and
other expertise and experience that is relevant to the purpose,
powers, and duties of the corporation.
JOE PASKVAN, governor's nominee to the AGDC Board of Directors,
Fairbanks, Alaska, joined the committee. He said he was born and
raised in Fairbanks and graduated from the University of Alaska
Fairbanks (UAF). He was married 38 years ago in Fairbanks to a
woman who was also born and raised there. He is an attorney in
private practice and has been for over 35 years. He has been a
member of Rotary for 25 years, has been on the Diocesan Finance
Committee for 25 years and is a guest lecturer at UAF on a
number of topics. He was a certified hockey coach when his boys
were in hockey and has years of experience as an Alaska State
Senator.
3:34:19 PM
SENATOR STOLTZE joined the committee.
MR. PASKVAN said his nomination is for the AGDC board as a
public member and part of his professional life he had "quite a
bit" of experience in construction on both large and small
projects, has represented major contractors in Interior Alaska
and been involved on their behalf in construction disputes. He
has been involved with large projects involving state contracts
and small construction contracts involving only private
construction contracts. As part of his work as an attorney, he
hires advisors and consultants that best help and assist his
clients. He is currently on two subcommittees with AGDC: one is
the Tech Committee led by Dave Cruz and the other is the
Commercialization Subcommittee led by John Burns. He explained
that subcommittees only gather information and provide it to the
board.
He said that an overarching task of AGDC is to promote the
delivery of the cheapest gas to Alaskans. The task of AGDC under
AS 31.25.060 is to secure and engage professional and technical
advisors.
3:36:03 PM
MR. PASKVAN said that AGDC is looking at two projects, as
required by law: the AKLNG is the first project which has the
probability of being the most successful. It is currently a 42-
inch diameter pipe with the potential of 48 inch diameter pipe.
The second project, and the backup project, is a 36-inch Alaska
Stand Alone Project (ASAP). Its objective is to ensure that
Alaska has an economically viable project should the AKLNG
Project falter.
He explained that AGDC has been tasked and performs work, which
advances both projects. Fritz Kruzen advises the board on AKLNG
Project; he has 35 years with ConocoPhillips, specifically in
the area of liquefaction experience. He is not a consultant to
AGDC, but a direct employee. Frank Richards advises the AGDC
board on the ASAP Project.
3:37:46 PM
MR. PASKVAN said he thought it important to provide the
Resources Committee with examples of work that advances both the
AKLNG and the ASAP Projects. AGDC provides a framework for the
sharing of data and coordinating of work and historical data,
such as geotechnical, hydrological, environmental, cultural and
routing work. It established a common pipeline route that is
essentially 98.5 percent identical. Only when it gets south of
the Susitna River is there a little deviation between the two
projects. So, AGDC, addressing the right-of-way work, advances
both projects.
Much of the environmental impact statement (EIS) submitted in
2012, with a supplemental initiated in August 2014, advances
both projects with many river and stream crossing surveys and
design work including two-dimensional mapping of these
crossings. There is a potential for cultural resources and
wetland delineation as part of the survey that benefits both
projects. More than 400 geo-technical bore holes have been
drilled that advances both projects. The sites for 124 material
sources have been identified and air quality monitoring data and
permit work for the gas conditioning facility has been done for
the facility that would exist on the North Slope. They have been
testing the pipe and doing fish habitat reporting; biological
assessments have been done that advances both projects.
The ASAP Project delivered a class 3 cost estimate on time. The
importance of this is that the consultants that are retained in
conjunction with the AGDC staff followed a methodology with
estimate breakdowns and the records they have assembled are
industry standard. He has been told it was done by the "A Team"
of Arctic engineering, a very narrow field. The AKLNG Project
has also assembled what they consider the "A Team" so that both
projects have retained an A team for the purpose of advancing
both projects.
He explained that the A Team for ASAP was about to be disbanded
in April. These skilled people are working on the 36-inch pipe
and one of the topics at the March AGDC board meeting was what
other potential use there might be for them before they disband
within the over-arching concept of AGDC potentially being able
to deliver an economically viable alternative should the AKLNG
Project stumble.
MR. PASKVAN said Mr. Cruz, head of the Tech Committee,
recommended that the AGDC consider ASAP Project cost estimates
for an ANSI 900 pipe in addition to an ANSI 600 pipe, the
difference being that the ANSI 600 pipe is 480 psi and 2,220 psi
for the ANSI 900 pipe.
3:42:32 PM
The Governor wanted to ask the A Team what Alaska might need to
think about while it is still assembled, and AGDC didn't have to
request any more money from the legislature to do that. For
perspective, at the start of this project, the pipe was "X70
material grade" and the pipe size has not changed from 36-inch;
the type of gas is the same, as well, but the difference is what
might be accomplished with increased pressurization using an
ANSI 900 pipe. The question was what "rough order of magnitude
(ROM)" the pipe potential increase would affect the gas
conditioning facility. No LNG component was part of this
direction.
3:44:53 PM
The ASAP Project might become more economic by using ANSI 900
pipe with everything else remaining the same. Using compression,
an ANSI 900 pipe can be increased to 2.4 bcf within a 36-inch
line. Nothing about it is competitive with a 42-inch or 48-inch
line. The AKLNG Project is also using 42-inch X70 pipe and ANSI
900. So, this type of work is potentially beneficial to both
projects.
MR. PASKVAN reiterated that the AGDC board in March 2015 wanted
to use this skilled team to provide industry standard estimates
using the ASAP 36-inch pipe. They wanted to know if volume
increased the deliverability of the lowest cost to Alaskans and
if economy of scale helps to do that. This is only if AKLNG
falters in going through the stage gates to construction.
He noted that it's important to understand that mid-year 2016,
Alaska will have a pretty good idea of whether the AKLNG Project
is moving forward or not. If it does not, this additional
information could be of value in advancing the ASAP objective of
ensuring that Alaska has a viable and economic alternative. AGDC
is not engaging in a project. It is only looking at costs using
the A team, which it would have access to for only a short
period of time.
3:47:54 PM
CHAIR GIESSEL said having read the minutes of that AGDC board
meeting, he did a great job summarizing the LNG 101 briefing,
and asked him for more detail on his construction experience.
MR. PASKVAN answered that he participated in major roadways,
some buildings, and some of the larger state projects like the
Johansen Expressway in Interior Alaska in which he represented
the major contractor. He represented them for decades (back to
1981) until it was sold and then he represented the owner,
individually, after that.
3:49:52 PM
CHAIR GIESSEL asked if he felt his qualifications fall under the
large project management criteria in the statute.
MR. PASKVAN answered that he was involved with the engineers
that were employed by the company's owner; he wasn't developing
the large project management. The managers he dealt with on
behalf of the owner were involved in the sequencing of large
projects.
CHAIR GIESSEL said he had a great resume' of community and state
service. This is pretty technical board and previous members had
100 years of experience in the gas industry and she asked which
slot he felt he was filling.
MR. PASKVAN answered that he wasn't thinking about filling a
particular individual's slot. The governor wanted him to serve
Alaska and he felt it was important to contribute. He recalled
that Drue Pearce was on the board and had political experience,
but maybe not construction law experience. He is on the
Technical Committee with Mr. Cruz and gets along well with him.
Has dealt with engineers all his life.
3:52:55 PM
CHAIR GIESSEL said Drue Pearce was the U.S. Government's federal
coordinator for the Alaska Natural Gas Transportation Project
for three years and has engineering experience.
SENATOR WIELECHOWSKI said he served with Senator Paskvan and
found him to be one of the most thoughtful, hardworking and
conscientious people that he had ever dealt with in this
building. He appreciated his knowledge and background on all
kinds of resources issues, particularly oil and gas issues. When
he chaired the Resources Committee, it dealt with plenty of oil
and gas issues. He reiterated this is a public member seat and
based on concerns he had heard he asked Legislative Legal
whether Senator Paskvan, Rick Halford and Hugh Short met the
requirements of the statute. He read three sentences from the
reply:
The statute, however, does not require that the
governor select the public member with specific
experience in natural gas pipeline construction,
operation, marketing, or finance, or large project
management. In fact, the statute gives the governor
explicit authority to consider other expertise and
experience when selecting board members. A court is
unlikely to find that the governor's current nominees
to the AGDC board violate the statute considering the
broad authority given to the governor in selecting
public members by the statute.
3:55:08 PM
SENATOR WIELECHOWSKI remarked that something Mr. Paskvan said
struck him: Dave Cruz was the one who asked for the
reconfiguration of the project, and he asked him to explain a
little about that.
MR. PASKVAN responded that a couple hours into the meeting the
issue of reconfiguration of the ANSI standard came up and Mr.
Cruz advocated that the A Team find what the cost might be.
CHAIR GIESSEL followed up saying that the AGDC board has $200
million in the fund for the ASAP line and she wanted to know if
he asked what the cost of the new configuration would be.
MR. PASKVAN replied that it was explicitly stated that there was
no need to ask the legislature for any more money to do this,
and the team had given their class 3 estimates on time and they
were going to be disbanding. While they were still there they
could get this information in the most economic, least intrusive
way. If they disbanded and two or six months later that
information was needed, a public solicitation would be needed.
This team is very skilled in Arctic engineering and to
reassemble that group again would cost many times more.
CHAIR GIESSEL said understanding that this is a new subject
matter for him, she wanted to know if he had asked what would be
done with the extra gas coming through the reconfigured ASAP
line, because the ASAP line ends at Big Lake and connects with
the Enstar system.
3:59:03 PM
MR. PASKVAN answered that the expectation was that the volume of
gas would indicate a potential for export. He said the vote was
unanimous to find out what the state should be thinking about if
the AKLNG Project stops for whatever reason.
CHAIR GIESSEL asked what the current ASAP line can increase its
compression to.
MR. PASKVAN answered to 1,480 psi with ANSI 600 pipe.
CHAIR GIESSEL asked about the carrying capacity.
MR. PASKVAN answered his rough guess based on his memory is that
the gas treatment facility has to be increased and 6-8 more
compressors are needed to get the project to a 1.5 bcf using the
ANSI 600 X70 material grade pipe.
4:01:43 PM
CHAIR GIESSEL asked the state's need for natural gas.
MR. PASKVAN replied that the state on average needs 250
mmcf/day, although there is hope that potentially the Donlin
Project would increase demand and Fairbanks might someday need
more. The thought is consistent with that by creating additional
volume you can deliver the lowest cost gas to Alaskans, which
would mean there might be customers out there that would want it
beyond Alaskan customers.
CHAIR GIESSEL said her question is that the ASAP line can
already compress and get up to 1.5-1.6 bcf/day and she was
trying to get to the information he was given that drove him to
say yes to spending some of the $200 million that was set aside
to go to whichever pipeline proceeds forward when the front end
engineering and design (FEED) decision is made in the 2nd
Quarter, 2016.
MR. PASKVAN replied that it is still a 36-inch pipe using the
same material grade pipe; it's just increasing capacity to put a
little more psi into the pipe. The committee thought it prudent
to look at components that might have an increased cost in an
economic analysis should the AKLNG Project falter. It could cost
ten times as much money to do the same study a year down the
road. This is really a window of opportunity. Japan is building
LNG receiving facilities on their West Coast, because of
earthquake and tsunami potential on the East Coast, and they
want compatibility with an export facility to them.
4:05:55 PM
With respect to the free trade agreement countries, one of the
questions going through his mind in addressing potential volumes
is that he didn't know which countries were free trade agreement
countries. It's anticipated that AKLNG Project customers would
be Korea, Japan and Taiwan, but only Korea is a free trade
agreement country.
SENATOR GIESSEL said the application has been made for non-free
trade agreement countries, as well, but it hasn't been granted
yet.
4:06:58 PM
SENATOR WIELECHOWSKI said he requested more in-depth discussion
of financial issues on how AGDC is intending to spend its money
and was told that the discussion wasn't needed at that time.
After Chairman Dave Cruz tasked the AGDC staff to look at
reconfiguration of the ASAP Project and to relax the 500 mmcf
limit, Frank Richards (AGDC Vice President for Engineering and
Program Management), testified that the primary objective was to
keep a backup plan to the AKLNG Project alive. He asked Mr.
Paskvan to talk about what his project is doing in terms of
competing with the big line or if it's just a backup.
MR. PASKVAN responded that during the March AGDC meeting he
understood that it was not competition and that the premise was
that a big line [AKLNG] could deliver gas at a much lower cost
to individual Alaskans.
SENATOR WIELECHOWSKI mentioned concerns about duplication of
efforts.
MR. PASKVAN answered that the AGDC work can benefit both
projects; for instance, the X70 material grade pipe testing is
complimentary.
4:10:23 PM
SENATOR WIELECHOWSKI asked if AGDC continues to work
collaboratively with the AKLNG Project.
MR. PASKVAN replied that both board Chair Burns and Mr. Cruz
indicated that the working relationship is good. Two AGDC
Executive Managers, Frank Richards, seconded to ASAP, and Fritz
Kruzen, seconded to AKLNG, both testified that they were sharing
the type of information that is appropriate.
4:11:51 PM
SENATOR COGHILL thanked him for being willing to step up and
remarked that he was a tenacious advocate for Alaska when
serving in the Senate. He asked what qualifications Mr. Paskvan
thinks he brings that are really valuable for Alaska to the
board.
MR. PASKVAN replied that he takes any work that he does
seriously; he doesn't prejudge projects or outcomes, and facts
matter to him. When he was part of this legislative body and
this committee his office joined the American Society of
Petroleum Engineers, because he wanted access to their documents
to see what they have to say about this project. He works hard
and makes good determinations. At the end of the day,
engineering is all about facts and if you don't have them the
project will implode.
SENATOR COGHILL said he didn't doubt that, but he was concerned
about prejudging because of their political differences. He
asked if Mr. Paskvan felt confident that he could stay within
the statutory framework.
MR. PASKVAN replied that he views his work on the AGDC board as
nonpolitical since it is tasked with ultimately getting gas to
Alaskans. That is not a political issue.
4:16:56 PM
SENATOR COGHILL said one of the issues they are dealing with is
that the state doesn't compete against itself. Once the
conversation began with DNR, the ASAP Project was referred to as
an alternate plan, but at this point it's just a pipe that
doesn't have a buyer yet. The governor is talking about
soliciting buyers and he asked what his take on that is.
MR. PASKVAN said he didn't recall that at the board meeting and
he was not contacted by the governor or his office before
attending the March board meeting.
SENATOR COGHILL commented that if that's the case, he is behind
Mr. Paskvan. He has seen what an "animal" he can be as a lawyer.
MR. PASKVAN said politics does not drive him for this position.
He is interested, because it is non-political.
CHAIR GIESSEL clarified that AGDC doesn't do the marketing of
the gas, but the DNR team does.
4:20:39 PM
SENATOR STEDMAN said it's prudent that whatever the state builds
is economic and it's pretty clear that a small line is not. It's
easy to roll politics into it. Mr. Paskvan reads information and
makes rational decisions based on it and in his opinion, the
governor couldn't find a better candidate to serve on the AGDC
Board than Mr. Paskvan.
SENATOR STEDMAN also said that it was a political error to give
the governor $400 million in one appropriation, because
governors change from time to time. Those funds were initially
for future capital budgets when there were no funds for capital
budgets, but once the governor has them, it's hard for the
legislature to do much.
4:25:03 PM
SENATOR WIELECHOWSKI stated that this is a public seat and he
wants someone who is going to fight as hard he can to get a
backup plan that delivers low-cost gas to Alaskans. He saw Mr.
Paskvan fight for those things when he was in the Senate; he is
one of the first people who pushed for a small diameter line and
an 8-inch PVC line from Cook Inlet to Fairbanks. Mr. Paskvan is
extremely tenacious in court and he was not one of the more
political people in the building when he served. He is a
straight shooter; he gets along with people and fights hard for
what he believes in.
The one area where there are some concerns is with his oil and
gas experience, but there are other technical seats and AGDC has
consultants and advisors.
MR. PASKVAN answered absolutely; the statutory structure
provides explicitly for the AGDC board to retain high quality
experts to advise them so that the skill set that the board
overall may not have can be provided to it.
He related that other than when he was an elected official he
never worked in government. He has only worked in private
enterprise; he ran his father's business. He understands what
it's like to be responsible financially. He agreed with Senator
Stedman who said he did not want a non-economic project that
would be a drain on the state.
CHAIR GIESSEL reminded members that five of the board's seats
are public and only two are designated and those are
commissioners. She said the AKLNG Project went through a
rigorous site selection process and chose Nikiski, because it
met technical qualifications and asked if he had a differing
opinion with them on that selection.
MR. PASKVAN answered that he didn't personally have a feeling
about that. He heard opinions from some marine pilots who
testified before the Senate Resources Committee when he was co-
chairman.
4:29:55 PM
CHAIR GIESSEL said she appreciated his answer in light of the
fact that he was looking at an alternative project. She thought
he might be looking at an alternative destination, as well.
She asked him to explain why he was quite interested in signing
a confidentiality agreement.
MR. PASKVAN answered that from his years as an attorney, ethics
require that attorneys keep information confidential. In a
commercial project there are contractual obligations separate
from the ethics of confidentiality and he doesn't have a problem
signing a tailored confidentiality agreement that is appropriate
for transparent government but at the same time recognizing
aspects of information that should not be conveyed to any
others. He followed that process all his life and doesn't have a
problem with signing a contractual confidentiality agreement.
CHAIR GIESSEL, finding no further questions, announced that in
accordance with AS 39.05.080, the Resources Committee reviewed
the following and recommends the appointments be forwarded to a
joint session for consideration: Joe Paskvan, AGDC Board of
Directors. This does not reflect an intent by any members to
vote for or against the confirmation during any further
sessions.
4:33:55 PM
At ease
SB 70-GAS PIPELINE RIGHT-OF-WAY;PARKS;REFUGES
4:33:59 PM
CHAIR GIESSEL announced consideration of SB 70.
SENATOR COSTELLO moved Amendment 1.
AM-1
3/27/2015
Hutchins
AMENDMENT 1
OFFERED IN THE SENATE RESOURCES
COMMITTEE BY
_______________
TO: SB 70
Page 1, line 9 following "parcels": 1
Insert ", including land that would lie within the
described parcels but for any U.S. 2 Survey,"
Page 1, line 13:
Delete "SW1/2"
Insert "SW1/4"
Page 2, line 1:
Delete ": N1/2, SW1/4"
Page 2, line 7:
Delete "SW1/4;"
Insert "W1/2;"
Page 2, following line 10:
Insert "Section 8: E1/2"
Page 2, line 12:
Delete "NW1/4"
Insert "W1/2"
Page 2, line 13:
Delete "NW1/4"
Insert "W1/2"
Page 2, line 17:
Delete ": W1/2"
Page 2, line 20, following "NW1/4":
Insert ", N1/2NE1/4"
Page 2, line 21:
Delete ": N1/2, SW1/4"
Page 2, line 27:
Delete "NE1/4"
Insert "N1/2"
Page 2, line 28:
Delete ": N1/2, SW1/4"
Page 2, line 29:
Delete "SE1/4"
Insert "S1/2"
Page 3, line 1:
Delete "NW1/4;"
Insert "N1/2;"
Page 3, line 4:
Delete ": N1/2, SW1/4" 30 Page 3, line 5: 1
Delete "SE1/4"
Insert "E1/2"
Page 3, line 7, following section "Section 35":
Delete the semicolon.
Page 3, following line 7: 8
Insert "Section 36: NW1/4;"
Insert "(5) Township 32 North, Range 2 West, Seward
Meridian"
Section 6: NW1/4"
Page 3, line 8:
Delete "(5)"
Insert "(6)"
Page 3, line 14, following "SW1/4":
Insert ", N1/2SE1/4"
Page 3, line 16:
Delete "NW1/4"
Insert "N1/2"
Page 3, line 19, following "SW1/4":
Insert ", N1/2SE1/4"
Page 3, following line 19:
Insert "Section 29: NW1/4"
Page 3, line 21"
Delete "N1/2;"
Insert "N1/2, SW1/4;"
Page 3, line 22:
Delete "(6)"
Insert "(7)"
Page 3, line 25:
Delete "(7)"
Insert "(8)"
Page 3, following line 26:
Insert "Section 17: SE1/4"
Page 3, line 27, following "S1/2":
Insert ", S1/2NW1/4"
Page 3, line 30, following "S1/2":
Insert ", NE1/4"
Page 4, line 1:
Delete "(8)"
Insert "(9)"
Page 4, line 26, following "parcels":
Insert ", including land that would lie within the
described parcels but for any U.S. 26 Survey,"
Page 5, following line 1:
Insert "Section 15: W1/2W1/2"
Page 5, line 2:
Delete ": N1/2, SW1/4"
Page 5, line 3, following "S1/2":
Insert ", S1/2NE1/4."
Page 5, line 29, following "parcels":
Insert ", including land that would lie within the
described parcels but for any U.S. 8 Survey,"
Page 7, line 3, following "parcels":
Insert ", including land that would lie within the
described parcels but for any U.S. 12 Survey,"
SENATOR STOLTZE objected for an explanation.
4:34:40 PM
BEN ELLIS, Director, Division of Parks and Outdoor Recreation,
Department of Natural Resources (DNR), Juneau, Alaska, explained
that SB 70 is needed to open up four corridors through four
state legislatively designated areas - the Denali State Park,
Willow Creek, Nancy Lake, and Captain Cook Recreational areas -
to the Right-Of-Way Leasing Act for the purpose of construction
of a natural gas pipeline from the North Slope of Alaska. The
corridor suffices for both the ASAP and the AKLNG lines.
He explained that the amendment makes sure that enough land is
within the corridor to not have to come back and ask for more.
The amendment expands certain areas adding 1,060 acres to the
proposed corridor through Denali State Park and 180 acres to the
corridor proposed for Captain Cook State Recreational Area. The
effect of these additions is to ensure the corridor through
those areas is sufficiently wide to lay the final placement of a
natural gas pipeline once permitting and environmental review
are completed. No additional lands were proposed for the Willow
Creek or the Nancy Lake Recreational Area as they were
determined to be sufficiently wide enough as originally
described in SB 70.
Additionally, the amendment clarifies that the leasing corridor
is intended to include in its NTRS descriptions of land that may
also need to be described by U.S. survey number.
4:37:29 PM
The only part the two lines would be in is Denali State Park.
The line splits where it goes through Nancy Lake and Willow
Creek for the ASAP line and the one in the Captain Cook State
Park is for the AKLNG line. They were so focused on making sure
the legals were correct that they failed to capture it on the
map in their packets.
4:39:50 PM
SENATOR COSTELLO asked him to explain why this is a conservative
path that it is actually wider than he thinks will eventually be
needed.
MR. ELLIS explained they wanted to make sure that for reasons of
wetlands or ground studies that it would be better to have a
pipeline move slightly over one way or the other, and they
didn't want to have come back to the legislature. The AKLNG is
looking for a corridor of 2,000 feet to start out with; ASAP is
looking for 750 feet. Those corridors become smaller as the line
becomes more defined and are released back to State Park
management if they are not needed.
DON PERRIN, Acting Director, State Pipeline Coordinator's
Office, Department of Natural Resources (DNR), Anchorage,
Alaska, apologized for inadvertently sending the erroneous map
to the governor and the committee. He clarified that all the
maps now match up with the legal descriptions. In terms of the
corridor, he noted that this bill does not change the management
of the lands within the corridor. For instance, if this bill
passes, the Captain Cook State Recreation area will still be
managed under Title 41 as state recreational lands. They thought
it would be better to widen the corridor just a little bit
knowing that those lands will still be managed as state
recreational area lands that at which time a right-of-way would
be issued, it would be a very narrow strip.
SENATOR STOLTZE removed his objection and asked him to continue
being diligent with the land descriptions.
CHAIR GIESSEL, finding no further objections, announced that
Amendment 1 was adopted.
CHAIR GIESSEL, referring to the Denali State Park map that
clearly shows where the right-of-way is, asked what happened
when the boxes on it got real narrow.
4:44:10 PM
MR. ELLIS answered that he believed that the 2,000 foot corridor
fell within those subsections and that wider wasn't needed.
MR. PERRIN explained because that particular location jumps the
Chuitna River at the Parks Highway and has been studied
thoroughly by both ASAP and AKLNG engineers, and with that level
of confidence it was felt the corridor didn't need to be widen
in that area.
SENATOR COGHILL asked if they are talking about access for ATVs,
too.
MR. ELLIS answered yes; all access including ATV will be
available, except during construction when there will be some
temporary closures.
4:46:17 PM
CHAIR GIESSEL opened public testimony. Finding no comments, she
closed public testimony.
SENATOR COSTELLO moved to report SB 70, as amended, from
committee with individual recommendations and attached zero
fiscal note. There were no objections and CSSB 70(RES) was
reported from the Senate Resources Standing Committee.
4:47:10 PM
At ease
SB 50-AIDEA: BONDS;PROGRAMS;LOANS;LNG PROJECT
4:48:46 PM
CHAIR GIESSEL announced the consideration of SB 50. [CSSB
50(NRG) was before the committee.]
4:49:12 PM
GENE THERRIAULT, Deputy Director, Alaska Energy Authority (AEA),
Fairbanks, Alaska, introduced himself and noted that Mr. Parady
would start the presentation on SB 50.
4:49:20 PM
FRED PARADY, Deputy Commissioner, Department of Commerce,
Community and Economic Development (DCCED), Juneau, Alaska, said
that Administrative Order 272 directed the DCCED commissioner to
collaborate and facilitate at the highest levels work on
consumer energy issues across Alaska, but of more germane to
this committee and this bill to work on the Interior Energy
Project (IEP) to provide affordable energy to Interior Alaska
customers as soon as possible and to possibly provide for gas
elsewhere after the Interior was supplied and to use private
sector mechanisms as much as possible. The goal was initially
envisioned to deliver natural gas to Interior homes with a
$15/thousand cubic feet at the burner tip cost (the energy
equivalent of $2/gallon fuel oil).
4:50:55 PM
MR. TERRIAULT stated that much of the language in the bill makes
adjustments to a number Alaska Industrial Development and Export
Authority (AIDEA) bond and loan authorizations. Sections 4 and 5
of the bill apply to the Interior Energy Project and so he would
discuss those changes when they came up.
He explained that section 1 adjusts an authorization requirement
that has been in place since 1990. The original amount of $6
million was set for AIDEA bonding needing approval for the
citing of the project from the local government. That is being
proposed to go up to $10 million.
Section 2 on page 2 deals with the bonding authorization for $10
million that has been on the books since 1990 and the proposal
is to adjust it up to $25 million to account for inflation, the
size of typical projects coming to AIDEA for participation, and
to bring a number of sections of statute up to the same dollar
amount.
4:52:57 PM
The $25 million new suggested level appears in section 3, also.
Section 3 deals with AIDEA's ability to issue loans out of the
Enterprise Development Account and that was set in 2006 at $20
million. On line 30, the existing $20 million amount for the
original Sustainable Energy Transmission and Supply (SETS) fund
is proposed to go up to $25 million, also.
4:53:56 PM
Page 3 has existing statutory language with no proposed change.
Page 4 starts dealing with the Interior Energy project. Section
4 was added by the Senate Energy Committee. Senator Micciche, in
particular, was very interested if the Interior was going to
look for a source of natural gas and potentially look to the
Cook Inlet area to source those gas molecules, in AIDEA
evaluating the possibility of delivering those molecules on a
small diameter pipeline.
AEA committed to working with Enstar on the pricing of such an
enterprise and the manufacture of Flex steel pipe and has
provided information to Senator Micciche indicating that it
looks like that type of delivery would be severely economically
challenged, although it would continue to be evaluated.
Suggested language deals with a previous prohibition in the SETS
statutes that precluded SETS money from being used for a natural
gas pipeline. This exemption is structured to specifically say
they can look at a 12 inch or smaller pipeline to potentially
deliver gas to the Interior.
4:55:44 PM
Section 5 proposes changing the financing tools that were
previously approved by the legislature for the Interior Energy
Project. Language on page 5, line 4, deletes the North Slope as
the only source of gas molecules. It appears that delivery price
off the North Slope would not be economical for the community to
pay for conversion, and if you can't get demand up, then the
per-unit price will be prohibitive. This doesn't preclude the
possibility that North Slope gas still could be a solution or
part of a solution, but it opens it up for AIDEA and AEA,
through the IEP process, to look at the possibility of sourcing
the gas molecules elsewhere in the state. The expectation is
that producers in Cook Inlet could come forward with private
partners that could propose a delivered price that would get the
needed number of conversions in the Interior.
As the North Slope language was removed, there was some concern
by Interior delegation members that that would just open up a
project that gets developed in the Cook Inlet that is targeted
at serving Western or Southeast Alaska. So, the drafter
recommended using Interior Alaska as being the "primary market,"
but secondary markets could be served by this infrastructure,
because serving other needs would make the per unit price for
everybody go down.
4:58:58 PM
Language on line 5 talks about a distribution system in Interior
Alaska, and through RCA action the state has two certified
utility gas distribution systems. That is why "s" was added.
Sections 6 and 7 clean up old existing AIDEA bond
authorizations; section 6 repeals an unused bond authorization
that was part of airline maintenance facilities at the Anchorage
Airport. He explained that part of the bond authorization was
not used and once they get passed a certain age AIDEA won't use
them, because they are "stale," but because they remain on the
books as a possible debt to the authority, bond counsel has
advised that they need to be taken into consideration when new
ratings are done for the entity, and their suggestion was to
clean up the old authorizations. Section 7 has a number of old
authorizations that were never used but are being proposed to be
just be taken off the books. Section 8 is an immediate effective
date.
5:00:38 PM
MR. THERRIAULT explained that it is standard now that new bond
authorizations for potential projects have a five-year sunset
date, so this goes away as an issue.
SENATOR STOLTZE noted the history of AIDEA's failures had been
from legislative involvement in micromanagement, and he wants
the parts of the bill that didn't come from the Industrial
Authority to be thoroughly vetted.
MR. THERRIAULT said that language just allows the authority to
consider it; it doesn't direct that it be selected. So, AEA's
view is that would probably have been part of the due diligence
in delivering a better smarter way to do it to the Interior.
SENATOR COGHILL asked him to bring a table of authority repeals
to the next meeting.
MR. THERRIAULT said the governor's transmittal letter for the
legislation has a list of them.
CHAIR GIESSEL thanked Mr. Therriault for the explanation and
announced she would hold SB 50 in committee.
5:03:39 PM
Finding no further business to come before the committee, Chair
Giessel adjourned the Senate Resources Committee meeting at 5:03
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Resume-AGDC Board - Paskvan #6.pdf |
SRES 3/30/2015 3:30:00 PM |
|
| SB 70 Briefing Paper .pdf |
SRES 3/30/2015 3:30:00 PM |
SB 70 |
| SB 70 DNR Responses to Senator Coghill 03-17-2015.pdf |
SRES 3/30/2015 3:30:00 PM |
SB 70 |
| SB 70 Amendment 1 03-30-2015.pdf |
SRES 3/30/2015 3:30:00 PM |
SB 70 |
| Fiscal Note-SB0070-1-2-030615-DNR-N.PDF |
SRES 3/30/2015 3:30:00 PM |
SB 70 |
| SB 70 Supporting Document- (LAS 30116 AGDC Geotech State Parks Permit final signed 2015).pdf |
SRES 3/30/2015 3:30:00 PM |
SB 70 |
| SB 70-Supporting Document-MapCaptainCookSRA_11x17_150224.pdf |
SRES 3/30/2015 3:30:00 PM |
SB 70 |
| SB 70-Supporting Document-Map-Denali_11x17_150225r.pdf |
SRES 3/30/2015 3:30:00 PM |
SB 70 |
| SB 70-Supporting Document-Map-Nancy_Lake_SRA_11x17_150224.pdf |
SRES 3/30/2015 3:30:00 PM |
SB 70 |
| SB 70-Supporting Document-Map-WillowCreek_11x17_150224.pdf |
SRES 3/30/2015 3:30:00 PM |
SB 70 |
| SB50 CS NRG Version W 03-27-2015.PDF |
SRES 3/30/2015 3:30:00 PM SRES 4/3/2015 3:30:00 PM |
SB 50 |
| SB50 Fiscal Note-DCCED-AIDEA-Zero-2-11-15.pdf |
SRES 3/30/2015 3:30:00 PM SRES 4/3/2015 3:30:00 PM |
SB 50 |
| SB50 Governor's transmittal letter.pdf |
SRES 3/30/2015 3:30:00 PM SRES 4/3/2015 3:30:00 PM |
SB 50 |
| SB50 Summary of Changes ver A to ver W.pdf |
SRES 3/30/2015 3:30:00 PM SRES 4/3/2015 3:30:00 PM SRES 4/10/2015 3:30:00 PM |
SB 50 |
| SB50 Supporting Documents-Fbks Chamber of Commerce-Letter 03-09-2015.pdf |
SRES 3/30/2015 3:30:00 PM SRES 4/3/2015 3:30:00 PM |
SB 50 |
| SB50 Supporting Documents-FEDCO Ltr.pdf |
SRES 3/30/2015 3:30:00 PM SRES 4/3/2015 3:30:00 PM |
SB 50 |
| SB50 Supporting Documents-FNSB Resolution 2015-08 02-26-2015.pdf |
SRES 3/30/2015 3:30:00 PM SRES 4/3/2015 3:30:00 PM |
SB 50 |
| SB50 Supporting Documents-Furie LLC letter 3-2015.pdf |
SRES 3/30/2015 3:30:00 PM SRES 4/3/2015 3:30:00 PM SRES 4/10/2015 3:30:00 PM |
SB 50 |
| SB 50 Letter of Support Merrick Peirce.pdf |
SRES 3/30/2015 3:30:00 PM SRES 4/3/2015 3:30:00 PM SRES 4/10/2015 3:30:00 PM |
SB 50 |
| SB 50 NRG ver W fact sheet.pdf |
SRES 3/30/2015 3:30:00 PM SRES 4/3/2015 3:30:00 PM |
SB 50 |