Legislature(2003 - 2004)

04/15/2004 01:40 PM Senate TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
            SENATE TRANSPORTATION STANDING COMMITTEE                                                                          
                         April 15, 2004                                                                                         
                           1:40 p.m.                                                                                            
TAPE(S) 04-17                                                                                                                 
MEMBERS PRESENT                                                                                                               
Senator John Cowdery, Co-Chair                                                                                                  
Senator Thomas Wagoner, Co-Chair                                                                                                
Senator Gene Therriault                                                                                                         
Senator Georgianna Lincoln                                                                                                      
Senator Donny Olson                                                                                                             
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 384                                                                                                             
"An Act relating to a natural gas pipeline with a terminus at                                                                   
the Cook Inlet Basin."                                                                                                          
     HEARD AND HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB 384                                                                                                                  
SHORT TITLE: ROUTE OF NAT GAS PIPELINE FUNDED BY RR                                                                             
SPONSOR(s): TRANSPORTATION                                                                                                      
03/31/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/31/04       (S)       L&C, FIN                                                                                               
04/06/04       (S)       TRA REFERRAL  ADDED BEFORE L&C                                                                         
04/15/04       (S)       TRA AT 1:30 PM BUTROVICH 205                                                                         
WITNESS REGISTER                                                                                                              
MS. MARY JACKSON                                                                                                                
Staff to Senator Wagoner                                                                                                        
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Presented the sponsor statement for SB 384                                                               
on behalf of the sponsor.                                                                                                       
MR. MICHAEL HURLEY                                                                                                              
Senior Commercial Analyst                                                                                                       
ConocoPhillips Alaska                                                                                                           
POSITION  STATEMENT:   Testified there  was no  opposition to  SB
MS. WENDY LINDSKOOG                                                                                                             
Director of External Affairs                                                                                                    
Alaska Railroad Corporation (ARRC)                                                                                              
PO Box 107500                                                                                                                   
Anchorage, AK 99510-7500                                                                                                        
POSITION STATEMENT:  Answered questions pertaining to SB 384.                                                                 
MR. BILL POPP                                                                                                                   
Oil and Gas Liaison                                                                                                             
Kenai Peninsula Borough                                                                                                         
POSITION STATEMENT:  Supports the CS to SB 384.                                                                           
MR. ROBERT VALDATTA                                                                                                             
Stranded Gas Committee                                                                                                          
Seward, Alaska                                                                                                                  
POSITION STATEMENT:   Testified on SB 384,  expressing the desire                                                             
to bring additional natural gas to the Kenai.                                                                                 
MR. TOM BROOKS                                                                                                                  
Chief Engineer                                                                                                                  
Alaska Railroad Corporation (ARRC)                                                                                              
PO Box 107500                                                                                                                   
Anchorage, AK 99510-7500                                                                                                        
POSITION STATEMENT:   Regarding SB 384, offered  a brief overview                                                           
of the Railroad's right-of-way.                                                                                                 
MR. HAROLD HEINZE                                                                                                               
Alaska Natural Gas Development Authority (ANGDA)                                                                                
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:    Testified  on  SB  384,  emphasizing  the                                                             
importance of getting gas to the Cook Inlet area.                                                                               
ACTION NARRATIVE                                                                                                              
TAPE 04-17, SIDE A                                                                                                            
CO-CHAIR   THOMAS  WAGONER   called  the   Senate  Transportation                                                             
Standing Committee meeting to order at  1:40 p.m.  Present at the                                                               
call to order were Senators  Lincoln, Olson, Co-Chair Cowdery and                                                               
Co-Chair Wagoner.   Senator Therriault arrived  while the meeting                                                               
was in progress.                                                                                                                
         SB 384-ROUTE OF NAT GAS PIPELINE FUNDED BY RR                                                                      
The committee took up SB 384.                                                                                                   
MS.  MARY  JACKSON,  staff  to  Senator  Wagoner,  presented  the                                                               
sponsor statement.   She testified that there  are two mechanisms                                                               
that  have  been  discussed  this   session  for  funding  a  gas                                                               
pipeline:   Stranded  Gas  Act  and ANGDA.    A  third method  is                                                               
bonding  through the  Alaska Railroad  Corporation (ARRC).   Last                                                               
year HB 267  passed and authorized the ARRC to  issue bonds for a                                                               
natural gas  pipeline from  the North Slope.   The  authority was                                                               
for a  maximum of  $17 billion.   It  was loosely  constructed so                                                               
there  was  no  limitation  on   the  number  or  timing  of  the                                                               
issuances.   The ARRC was  given the authority to  negotiate with                                                               
the producers  with one or  more entities as  they saw fit.   Co-                                                               
Chair Wagoner  spoke with  the CEO of  ARRC about  that authority                                                               
and the possibility of constructing a  gas line to the Cook Inlet                                                               
Basin.   The result  of that  conversation is SB  384.   The bill                                                               
amends the language  that was approved last  year to specifically                                                               
reference the  route to  the Cook  Inlet Basin.   The  purpose of                                                               
specifying that route is to focus  on the need for natural gas to                                                               
the Cook Inlet  Basin.  The Cook Inlet Basin  serves the majority                                                               
of  the  residents  in  Alaska,   and  they  need  gas  for  home                                                               
consumption.   The  electrical  utilities  and the  petrochemical                                                               
industries in the Basin need the natural gas.                                                                                   
CO-CHAIR COWDERY  moved to adopt the  CS for SB 384  [labeled 23-                                                               
LS1847\H, Cook, 4/7/04]  as the working document  for purposes of                                                               
CO-CHAIR WAGONER asked  if there was any objection.   There being                                                               
none, it was so ordered.                                                                                                        
MS. JACKSON acknowledged the intent  was not to spend $17 billion                                                               
on one pipeline  route, but rather that one of  the routes should                                                               
be  in place  at some  point, within  the bonds  approved by  the                                                               
Railroad Authority to serve the  Cook Inlet Basin.  Regarding the                                                               
question as  to whether  or not a  route to the  Cook Inlet  is a                                                               
reasonable  consideration, she  referred to  a map  from over  10                                                               
years ago,  Denali Pipeline's  route from the  North Pole  to the                                                               
Cook Inlet Basin  for a [product line].  She  emphasized that the                                                               
route is possible, "It's there," she said.                                                                                      
CO-CHAIR COWDERY  referred to the  new language in the  CS, lines                                                               
[9 - 11], "except that a  portion of the pipeline must follow the                                                               
Alaska Railroad  right-of-way from the  City of Fairbanks  to the                                                               
pipeline terminus at  the Cook Inlet Basin."  He  asked about the                                                               
Railroad's right-of-way.                                                                                                        
MS.  JACKSON said  she had  the  same question;  the terminus  is                                                               
where the pipeline connects to the existing pipeline.                                                                           
CO-CHAIR WAGONER  said the  terminus is in  the "Mat  Valley" and                                                               
would be  where the 20-inch line  comes over from Beluga  - where                                                               
those two  would intersect with the  Railroad - one could  tie in                                                               
there,  back-feed gas  back into  Cook Inlet,  or on  through the                                                               
CO-CHAIR COWDERY suggested the need for further clarification.                                                                  
SENATOR GEORGIANNA  LINCOLN asked  if the  map [in  the committee                                                               
room] was the same as that included in the committee packet.                                                                    
MS. JACKSON  said the maps  were similar.   She referred  to both                                                               
maps and  pointed out Alaska Railroad's  rights-of-way, the joint                                                               
pipeline from the North Slope.                                                                                                  
SENATOR LINCOLN  referred to the  larger map and asked  where the                                                               
right-of-way  for  the  Railroad  and the  right-of-way  for  the                                                               
pipeline were located.                                                                                                          
CO-CHAIR WAGONER  responded that currently, there  is no pipeline                                                               
right-of-way, but  there is a  Railroad right-of-way and  also an                                                               
inter-tide right-of-way  for the  power line  that runs  from the                                                               
Mat Valley to Healy.                                                                                                            
MS. JACKSON  pointed to the black  line on the map,  the terminus                                                               
to the Cook  Inlet Basin; that is the existing  pipeline going to                                                               
the Cook Inlet.                                                                                                                 
CO-CHAIR  COWDERY  asked  about   the  existing  truck  line  and                                                               
CO-CHAIR WAGONER responded that  the existing pipeline comes from                                                               
the Beluga gas field and intersects  with the 20-inch line.  "You                                                               
can feed back  through the Beluga area over into  the North Kenai                                                               
area.  Or you can feed  around this way into the Anchorage Basin.                                                               
From Anchorage there are two gas  lines that Enstar has that come                                                               
down towards  Sterling and over.   It makes a full  loop, is what                                                               
it does, after it intersects with  that 20-inch line.  But that's                                                               
in the  future."  Basically,  it is possible  to run a  spur line                                                               
from the Fairbanks, North Pole area  to Anchorage.  He noted that                                                               
it's been  stated on the  public record  several times by  one or                                                               
two individuals that  it's impossible, but said, "If  you look at                                                               
this  map real  close, the  power line  does not  go through  the                                                               
Healy  Canyon where  the Railroad  has all  the trouble  with the                                                               
Shale slide.   It bypasses it.   And therefore it  eliminates the                                                               
problem of going through the national park.  Because you can by-                                                                
pass the  national park  quite easily.   It's already  been done.                                                               
It is a very  feasible route."  It's close to  the same number of                                                               
miles if there is  a spur line - if the natural  gas line did run                                                               
to the border  and then into Canada - it's  about the same number                                                               
of  miles as  it would  be to  run the  spur line  from Delta  to                                                               
Glennallen and  around.   It would  probably have  fewer problems                                                               
with the  EIS and permitting  because rights-of-way  have already                                                               
been  permitted  for utility  lines  and  there is  the  Railroad                                                               
right-of-way to work with, he explained.                                                                                        
CO-CHAIR WAGONER added that Gary  Hartley (ph), who lives in Salt                                                               
Lake City,  was a sub-contractor  for Tesoro Oil  when Associated                                                               
Pipeline  Contractors designed  this  pipeline (he  pointed to  a                                                               
full  package of  the design).    This pipeline  was designed  10                                                               
years  ago  when  the  companies  of  Tesoro  and  Williams  were                                                               
involved  in joint  discussions of  shipping the  product between                                                               
the refinery  in North Pole  and the refinery in  Nikiski because                                                               
of Williams's  limited ability  to process  a certain  portion of                                                               
the crude that ran through the  plant.  Tesoro had a more refined                                                               
process and  was going to bring  that product down and  ship back                                                               
the other product  in the Kenai.  That didn't  come about, but it                                                               
shows that it is very possible  to put a line into that corridor.                                                               
They've already pre-engineered and designed it, he stated.                                                                      
SENATOR GENE  THERRIAULT read  the new  language, "except  that a                                                               
portion of the pipeline must  follow ..." referred to the smaller                                                               
map, and asked about the gold colored [line].                                                                                   
CO-CHAIR  WAGONER  explained  this  shows  the  current  line  as                                                               
proposed by ANGDA into  Valdez.  The red line to  the west is the                                                               
spur line  into Cook Inlet Basin.   This map shows  the different                                                               
routes, although it doesn't have the route to the border.                                                                       
SENATOR  THERRIAULT  asked  if  any  of  these  routes  would  be                                                               
CO-CHAIR WAGONER replied yes.                                                                                                   
MS. JACKSON pointed out that  the black, yellow, and maroon lines                                                               
are currently ANGDA-authorized.  The red line is not authorized.                                                                
SENATOR LINCOLN  asked about the  bridge, and questioned  if this                                                               
would interfere with the proposed Knik Arm Bridge.                                                                              
CO-CHAIR  WAGONER said  no, that  there's a  20-inch pipeline,  a                                                               
high-powered pressured  line that's  already in place  that comes                                                               
around.   It starts from  the south.   There's a line  that comes                                                               
from Beluga.                                                                                                                    
SENATOR LINCOLN asked about the fiscal note.                                                                                    
MS.  JACKSON said  she had  spoken  with Steve  Porter about  the                                                               
fiscal note.   She  pointed out  that this is  an amendment  to a                                                               
measure that  was passed last  year that  had a fiscal  note; she                                                               
had copies of the bill and the fiscal note from last year.                                                                      
SENATOR LINCOLN asked if that bill had passed.                                                                                  
MS. JACKSON said yes.                                                                                                           
SENATOR LINCOLN  asked if that  would be sufficient to  cover the                                                               
additional spur.                                                                                                                
MS. JACKSON said  she didn't know but suggested  that the measure                                                               
that passed -  and this could be debated  - was all-encompassing.                                                               
The  bill  authorizes the  issuances  of  up  to $17  million  in                                                               
revenue bonds  to pay  for 70 percent  of the  construction based                                                               
upon current  estimates.  The  Railroad would bear  no liability,                                                               
have no responsibility for re-payment.   The fiscal note, done by                                                               
the Railroad Corporation, has FY 2006  as its first impact year -                                                               
$163,000 in  costs - to be  offset in revenues that  would be re-                                                               
cooped through the sale of the  bonds.  She suggested there would                                                               
not be  a fiscal note  on a portion of  a route that  had already                                                               
been approved.                                                                                                                  
SENATOR LINCOLN asked how this would interact with ANGDA.                                                                       
MS. JACKSON said it would not.                                                                                                  
CO-CHAIR WAGONER added that eventually, it could.                                                                               
MS. JACKSON agreed that could occur in the future.                                                                              
CO-CHAIR WAGONER  pointed out that  in the future, ANGDA  may get                                                               
together  with  the Railroad  and  work  out a  mutual  agreement                                                               
regarding construction.  All this does  is define that there is a                                                               
route.   It's  just another  alternative to  bring gas  into Cook                                                               
Inlet.  He  emphasized that Cook Inlet is  the only manufacturing                                                               
site for natural  gas product currently in the state.   There are                                                               
two  manufacturing units:   Agrium,  producing ammonia  and urea,                                                               
and  ConocoPhillips  that  produces  LNG.   There  are  currently                                                               
problems with  gas reserves  in Cook  Inlet and  with maintaining                                                               
the  necessary   level  of  production   to  keep   those  plants                                                               
operating.   Possibly in 2009 or  2010, there will be  a need for                                                               
additional gas supply.                                                                                                          
MR.    MICHAEL   HURLEY,    Senior   Commercial    Analyst   with                                                               
ConocoPhillips   Alaska,   testified   that   the   company,   in                                                               
conjunction  with  BP  and  Exxon   Mobil  has  been  working  on                                                               
commercializing  North Slope  gas resources  via a  pipeline from                                                               
the North Slope, down the  highway route, through Canada and into                                                               
the Lower  '48.   This bill  helps to  insure that  the potential                                                               
benefit from  the Railroad financing  not be limited in  any way.                                                               
"Whether it's  our company and  our partners, or whether  it's an                                                               
independent  gas pipeline  company,  there is  potential for  the                                                               
Railroad  bonds to  bring benefits  to  the project  to help  the                                                               
economics  of that  project.    We would  like  to encourage  the                                                               
committee  to make  sure that  there's flexibility  in how  those                                                               
bonds can be used."  He  said he couldn't comment specifically on                                                               
the  CS but  thought that  more flexibility  in Railroad  bonding                                                               
would  be better  for  the  project and  for  the opportunity  to                                                               
commercialize stranded gas.                                                                                                     
SENATOR DONNY  OLSON asked if  there was any opposition  from Mr.                                                               
Hurley or who he represents relating to SB 384.                                                                                 
MR. HURLEY confirmed there was no  opposition.  He added that the                                                               
thinking  is that  it's  appropriate for  the  state to  maintain                                                               
flexibility and  to use Railroad  bonds in whatever way  works to                                                               
most effectively commercialize the gas.                                                                                         
CO-CHAIR COWDERY  asked if/when this project  goes forward, would                                                               
the use of  Railroad bonds need the  Legislature's approval, even                                                               
with the passage of SB 384.                                                                                                     
MR. HURLEY said  he wasn't sure but perhaps  the legislation from                                                               
a year or two ago may have provided for that ability.                                                                           
MS. WENDY LINDSKOOG, Director of  External Affairs for the Alaska                                                               
Railroad  Corporation (ARRC),  testified  that  she believed  the                                                               
authorization was  put in  place last year,  and this  would just                                                               
amend  that authorization  to include  a potential  portion of  a                                                               
CO-CHAIR  COWDERY  said  this  was  why he  had  brought  up  the                                                               
question on  the CS;  maybe the language  should be  broadened so                                                               
that there wouldn't be problems.                                                                                                
CO-CHAIR WAGONER said the bill would  be held over and that could                                                               
be done.                                                                                                                        
SENATOR  LINCOLN  referred to  Mr.  Hurley's  prior testimony  of                                                               
wanting to  ensure that  there was  flexibility and  also stating                                                               
there was  no objection to  the bill.   She pointed out  that the                                                               
bill  as amended  says,  "a  portion must  follow."   She  asked,                                                               
regarding  the   CS,  if  Conoco   has  reservations   about  the                                                               
legislation as presented.                                                                                                       
MR. HURLEY said  the CS says "must" and that  causes concern, but                                                               
if it  is going to be  re-worded to be more  flexible, this would                                                               
be better and more in the state's interest.                                                                                     
MR.  BILL POPP,  Oil  and  Gas Liaison  for  the Kenai  Peninsula                                                               
Borough,  spoke in  support  of the  CS,  while also  recognizing                                                               
there  would be  additional  wordsmithing.   Support  is for  the                                                               
concept to bring gas down  the Railroad corridor, the Railbelt to                                                               
the Cook  Inlet Basin  to address long-term  energy needs  for 70                                                               
percent  of the  state's population  residing along  the railbelt                                                               
and  relying  on  85  percent of  their  electrical  power  being                                                               
generated by natural  gas turbines.  This is  a significant issue                                                               
for the  Cook Inlet  Basin and Kenai  Peninsula Borough  and will                                                               
have long-term  impacts if methods  and means are  not identified                                                               
to  help  support  the  construction of  North  Slope  gas  being                                                               
brought to the Cook Inlet  Basin.  As Co-Chair Wagoner referenced                                                               
earlier,  a  substantial  portion   of  the  state's  value-added                                                               
industry for the  petrochemical industry is based  in the Nikiski                                                               
industrial  site  in the  Kenai  Peninsula  Borough.   That  site                                                               
represents  65   percent  of  the   employment  of   the  state's                                                               
petrochemical   workers.      Two   of   the   major   employers,                                                               
ConocoPhillips and  the Agrium Nitrogen Plant,  rely specifically                                                               
on  a  plentiful supply  of  reasonably  priced gas  to  maintain                                                               
operations.    Their  vision  is   not  only  to  maintain  those                                                               
operations but also to help  to expand operations within the Cook                                                               
Inlet Basin - not necessarily  within the Kenai Peninsula Borough                                                               
but throughout  the Basin -  to take advantage at  monetizing and                                                               
getting value-added products generated  from North Slope gas that                                                               
could  be brought  to  the Cook  Inlet Basin.    This would  take                                                               
advantage of the transportation  hubs located here, the railroad,                                                               
the port,  airport, and so  forth.  Also, the  long-term economic                                                               
health  of  the Basin  hinges  on  natural  gas.   He  urged  the                                                               
committee to  pass the bill  to assure  the energy future  of the                                                               
Cook Inlet Basin.                                                                                                               
2:08 p.m.                                                                                                                       
CO-CHAIR COWDERY  asked if he had  a copy of the  CS and received                                                               
confirmation  that  he  did.    He  said  it  would  probably  be                                                               
appreciated and beneficial  if Mr. Popp could work  with staff on                                                               
the wordsmithing.                                                                                                               
MR. POPP responded it would be a privilege.                                                                                     
MR. ROBERT VALDATTA testified from  the Stranded Gas Committee in                                                               
Seward  in support  of Mr.  Popp's  idea of  the Kenai  Peninsula                                                               
being serviced on natural  gas.  He said that 10  - 15 years ago,                                                               
Seward  applied for  permits, and  Enstar  was going  to build  a                                                               
natural gas line  but it did not materialize.   They are still in                                                               
favor of that,  but also have good harmony with  the Railroad, so                                                               
by  bringing  natural  gas  through   the  Railroad,  or  through                                                               
permitting in  the future, either  way they hope the  natural gas                                                               
line comes down the Kenai so  that enough gas is there to support                                                               
Seward's  future endeavors.   He  said they  would work  with Mr.                                                               
Popp on these issues.                                                                                                           
CO-CHAIR WAGONER  announced he  would close  this portion  of the                                                               
hearing.  He  asked if there was anyone else  wanting to testify,                                                               
and received no response.  He asked if Tom Brooks was on-line.                                                                  
MR. TOM  BROOKS, Chief Engineer  with Alaska Railroad,  offered a                                                               
brief overview  of the Railroad's right-of-way  from Fairbanks to                                                               
Anchorage.  Basically the Railroad  has a 200-foot-wide right-of-                                                               
way  from Fairbanks  to Cook  Inlet Basin.   It's  continuous and                                                               
generally the  Railroad has exclusive  use of  that right-of-way.                                                               
The Denali  Park area  is an exception,  as that  right-of-way is                                                               
restricted to the traditional uses  that have been employed, i.e.                                                               
railroad  and communication  lines.   Those were  the uses  under                                                               
federal ownership.   Generally the Railroad's title  for a right-                                                               
of-way is in good shape for  a pipeline with the exception of the                                                               
park service and  the Healy Canyon.  That has  been identified as                                                               
having slide  areas and shales, and  that area is a  priority for                                                               
reconstruction.    Beyond  that,  the  right-of-way  and  railway                                                               
engineering standards are compatible with pipelines.                                                                            
CO-CHAIR  WAGONER said  when  he talked  with  Pat Gamble  before                                                               
going to the  Energy Council in Washington D.C.,  he mentioned to                                                               
the  Congressional delegation  that a  package would  be provided                                                               
showing where  the gas line  would supposedly bypass the  part in                                                               
the Healy Canyon.                                                                                                               
SENATOR LINCOLN referred to the CS, the Alaska Railroad right-                                                                  
of-way from  Fairbanks to the  terminus at the Cook  Inlet Basin,                                                               
and asked if testimony was that  the Railroad has no objection to                                                               
utilizing that right-of-way in the manner as stated in the bill.                                                                
MR. BROOKS confirmed that was correct.                                                                                          
CO-CHAIR WAGONER  asked if  the high  pressure, 20-inch  gas line                                                               
coming  out of  the  Beluga field  intersects  with the  Railroad                                                               
right-of-way at any place.                                                                                                      
MR. BROOKS said  there are high pressure gas lines  in the right-                                                               
of-way  but said  he  didn't  know if  that  particular gas  line                                                               
intersects  the right-of-way  or not.    He said  he believed  it                                                               
comes pretty close, if it doesn't intersect.                                                                                    
CO-CHAIR WAGONER said he could check into this with Enstar.                                                                     
SENATOR LINCOLN referred to the CS  and asked Mr. Heinze if there                                                               
was concern with any overlapping  that may occur, or funding that                                                               
may bring this in question regarding ANGDA.                                                                                     
MR.  HAROLD  HEINZE,  Alaska Natural  Gas  Development  Authority                                                               
(ANGDA), testified  that he  was in  Anchorage with  Steve Porter                                                               
and  that unfortunately  he did  not have  a copy  of the  CS but                                                               
wanted to  emphasize the  importance of getting  gas to  the Cook                                                               
Inlet area, as this would impact  the energy and heating bills of                                                               
about half of Alaska's population.   He estimated that about $100                                                               
million of disposable  income per year is at stake  from that one                                                               
sector of  the economy, and  he supports anything that  would get                                                               
gas to Cook  Inlet, and to tidewater so it  could be available to                                                               
other parts of the  state.  The second point is  that as a public                                                               
corporation, ANGDA has  looked at a variety of  financing to help                                                               
projects  for  getting gas  up  the  North  Slope.   He  reminded                                                               
members that  this Railroad  bonding capability  is unique  as it                                                               
was authorized through  an act of Congress.  He  noted care needs                                                               
to be  taken regarding whatever  the general  tax rules are.   He                                                               
reflected, as someone in the  private sector responsible for some                                                               
major pipeline  - in  some cases near  the railroads  or railroad                                                               
right-of-ways -  that when  the decision  is made  to lay  a long                                                               
length  of  pipeline  on the  railroad  right-of-way,  there  are                                                               
safety  considerations for  both the  railroad and  the pipeline.                                                               
He said  he hopes the language  would allow for the  alignment of                                                               
things to  be in  parallel but  necessarily in  the right-of-way,                                                               
which  at times  may be  a very  narrow juncture,  and there  are                                                               
safety  concerns.   There  have  been issues  in  the past  where                                                               
railroads and  pipelines have interacted and  generally everybody                                                               
loses when that happens.                                                                                                        
SENATOR LINCOLN said  in looking at the maps  that were presented                                                               
by the Denali Pipeline Project  and in consideration of where the                                                               
railroad  is at  the  optional route  and  the proposed  pipeline                                                               
route, it  varies on each page;  she said she couldn't  judge the                                                               
distance regarding whether it goes off of that 200-foot right-                                                                  
of-way.  The  language is very specific that it  must follow that                                                               
right-of-way  through  that whole  area  from  Fairbanks to  Cook                                                               
Inlet.  She  said she was sure that is  the part Co-Chair Wagoner                                                               
would be looking into, as to where it doesn't intersect.                                                                        
Co-CHAIR WAGONER confirmed this would  be addressed.  He told Mr.                                                               
Heinze they would send him  a copy of the preliminary engineering                                                               
study and the map.                                                                                                              
MR. HEINZE  said he  thought there  was a  copy available  at the                                                               
Joint  Pipeline  Office,  which  is  where his  office  is.    He                                                               
suggested  that the  Joint  Pipeline Office  be  included in  the                                                               
discussion  of  exact alignment  because  of  their expertise  in                                                               
pipeline safety and transportation.                                                                                             
CO-CHAIR  WAGONER said  Mr. Porter  would be  contacted regarding                                                               
fiscal notes.                                                                                                                   
CO-CHAIR COWDERY asked Mr. Brooks  if the Railroad has rights-of-                                                               
way greater than 200-feet.                                                                                                      
MR. BROOKS  responded that rights-of-way are  generally 200 feet,                                                               
and that in  some areas there are reserves that  exceed that, but                                                               
generally it is 200 feet.                                                                                                       
CO-CHAIR  WAGONER  asked if  within  the  200 feet,  "you're  not                                                               
always in  the center of  the right-of-way with your  tracks, are                                                               
MR. BROOKS replied, "Generally we are  but there are a few places                                                               
where we've re-aligned or done  other things that put us slightly                                                               
askew from the exact center."                                                                                                   
CO-CHAIR WAGONER  asked if  there were any  other questions.   He                                                               
thanked people  for their input  and announced that SB  384 would                                                               
be held in committee.                                                                                                           
There being no further business to come before the committee,                                                                   
Co-Chair Wagoner adjourned the meeting at 2:25 p.m.                                                                             

Document Name Date/Time Subjects