HJR 13-NATURAL GAS FOR STATE RESIDENTS 3:47:16 PM CHAIR OLSON announced that the final order of business would be HOUSE JOINT RESOLUTION NO. 13, Urging the attorney general, the producers of natural gas in the Cook Inlet region, and the Regulatory Commission of Alaska to work to secure long-term and affordable supplies of natural gas for the people and businesses of the state. 3:47:25 PM REPRESENTATIVE LEDOUX moved to adopt proposed CSHJR 13, Version 25-LS0747\C, Bullock, 5/3/07, as the working document. There being no objection, Version C was before the committee. REPRESENTATIVE GARDNER, speaking as the sponsor of HJR 13, related her understanding that most members of this committee are aware of the need for ConocoPhillips Alaska, Inc. ("ConocoPhillips") and Marathon Oil Corporation to renew their export license in order to continue exportation of the known gas reserves in Cook Inlet. The purpose with HJR 13 is to serve as a wake-up call and request that the attorney general and the state participate in that decision in order to ensure that the best interests of the state are considered. She noted that in most respects the mere introduction of this resolution has achieved the goal since the attorney general has intervened. However, the memorandum dated April 29, 2007, from Kevin Banks, Acting Director, Division of Oil & Gas, Department of Natural Resources, relates the following: "The consideration of this resolution by the committee is helpful and I believe the resolution shows that State government is speaking with a unified voice to assure that natural gas will continue to be available to the domestic energy market in Southcentral Alaska." Therefore, she indicated the need to proceed with the resolution. She pointed out that the companion Senate resolution has been modified, and those modifications are reflected in Version C of HJR 16. Version C merely makes the request to the U.S. Department of Energy. Representative Gardner characterized the resolution as a holistic determination regarding whether continuing to export Southcentral gas is good for Alaska or not. She acknowledged that the aforementioned isn't simple and one must keep in mind that it's very likely that the facilities used to export gas could be very important to provide gas for Southcentral Alaska in the future. 3:52:01 PM BART WATSON, Staff to Representative Berta Gardner, Alaska State Legislature, explained that Version C directs the resolution to the U.S. Department of Energy rather than have the state make its views known. The change is reflected in the first clause of the title where the reference to the attorney general is changed to the U.S. Department of Energy. The remainder of the title is the same as the original version. He then pointed out there are two minor clauses inserted on page 1, lines 8-11, which bring HJR 13 in conformance with the Senate companion resolution. On page 2, the first two "WHEREAS" clauses were inserted simply as additions to flesh out the other clauses. Version C includes two new provisions on page 2, lines 25-30 and on page 2, line 31 through page 3, line 3. The intent of the aforementioned two provisions is to support the administration, which has requested in its intervention. He reminded the committee that the administration says that it supports the renewal of the export license so long as the following three conditions are met: the energy producers take reasonable steps to replace the reserves depleted during the two-year extension; the contracts for the utilities for natural gas be signed prior to approval of the extension; and the liquefied natural gas (LNG) plant be open to any new producers. Mr. Watson pointed out that the issue is that if someone has a small, new find, it should be fairly easy to place the gas. However, for a large find there may be no way to get it to market because there isn't a large enough existing market without exportation of the gas. He opined that one reason to support the continued export of the gas is to ensure that there is incentive for additional exploration. 3:57:31 PM CHAIR OLSON mentioned that he would have opposed HJR 13 had it come in prior to the cutoff time for federal testimony. However, the original resolution was dated two days after the cutoff for testimony to be submitted to the U.S. Department of Energy. 3:58:29 PM REPRESENTATIVE LEDOUX moved to report CSHJR 13, Version 25- LS0747\C, Bullock, 5/3/07, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHJR 13(L&C) out of the House Labor and Commerce Standing Committee.