HOUSE ECONOMIC TASK FORCE March 3, 1993 5:00 p.m. MEMBERS PRESENT Representative Jeannette James, Acting Chair Representative Al Vezey Representative Joe Green Representative Bill Williams Representative Bettye David Representative Eileen MacLean MEMBERS ABSENT Representative Bill Hudson Representative Jerry Mackie Representative Carl Moses COMMITTEE CALENDAR Presentations by Alaska Coal Association and Western Arctic Coal Project WITNESS REGISTER Mr. R.B. Stiles, President Alaska Coal Association 1227 West 9th #201 Anchorage, AK 99507 (907) 276-6868 POSITION STATEMENT: Provide information to the Task Force Governor Bill Sheffield ASRC - Western Arctic Coal Project 2504 Loussac Drive Anchorage, AK 99517 (907) 243-1942 POSITION STATEMENT: Provide information to the Task Force Teresa Imm, Public Relations ASRC - Western Arctic Coal Project 301 Arctic Slope Avenue Anchorage, AK 99516 (907) 349-5148 POSITION STATEMENT: Provide information to the Task Force John Sims, Marketing Usibelli Coal 122 First Avenue Fairbanks, AK 99701 (907) 452-2625 POSITION STATEMENT: Provide information to the Task Force ACTION NARRATIVE (NOTE: MEETING WAS NOT TAPED) REPRESENTATIVE JEANNETTE JAMES, ACTING CHAIR, called the meeting of the House Economic Task Force to order at 5:00 p.m. on March 3, 1993, in the Governor's Conference Room. BOB STILES, PRESIDENT, ALASKA COAL ASSOCIATION, handed out a draft of the Alaska Coal Policy. He explained that Alaska had to compete against other countries in the coal market and thus needed a policy which he hoped the legislature would pass as a resolution. BILL SHEFFIELD, FORMER GOVERNOR, STATE OF ALASKA, representing the Arctic Slope Regional Corporation, introduced the Western Arctic Coal Project. He stated the project was 10 years old and could deliver coal in two more years. TERESA IMM, PUBLIC RELATIONS, ASRC - WESTERN ARCTIC COAL PROJECT, presented slides and pictures regarding the Western Arctic Coal Project. She reported that $14 million had been spent to date, the project was entirely on private land, and the coal being produced had low sulfur, low moisture, and was very clean burning. Regarding target markets, she stated the project focused on Western Alaska, North Slope villages, Hawaii, and Pacific Rim countries. Among the project's benefits to Alaska, she mentioned the creation of 300 jobs, a stable energy source, new tax base, diversified economy, and reduction in Alaska's dependence on oil. MS. IMM stated the Power Cost Equivalent, or the generating cost of power minus the consumer cost, would be reduced considerably by using coal instead of diesel. She explained the United States had 20.8% of the world's coal reserves, these being mostly in Alaska, and added Asia's coal use showed the highest rate of increase and Alaska's location was perfect for supplying Asia's coal needs. She reported that the Project already had all the needed permits. MR. STILES was asked to again review the Alaska Coal Policy, and he added that Montana's high severance tax had discouraged coal producers and consumers to the extent that Montana's share of the coal market was still very low; thus government must be careful to send a positive message, especially in the international market. He expanded on the Jones Act as referred to in the draft of the Alaska Coal Policy, stating that there were currently no U.S. coal carriers so Hawaii bought all its coal from Indonesia; thus the Alaska Coal Association was seeking a waiver of the Jones Act for low-bulk commodities like coal, for shipment between Alaska and Hawaii, and Alaska and the Western United States. JOHN SIMS of USIBELLI COAL, was asked for an update on this waiver and stated the United States Congress was currently drafting the 1993 Marine Policy Act to seek this exemption. ADJOURNMENT The meeting was adjourned at 5:45 p.m.