HOUSE SPECIAL COMMITTEE ON OIL AND GAS January 27, 2000 1:09 p.m. COMMITTEE CALENDAR PRESENTATION by Cook Inlet Pipeline Terminus Group TAPE 00-7, SIDES A and B CALL TO ORDER Representative Whitaker, Chairman, re-convened the House Special Committee on Oil and Gas meeting at 1:09 p.m. [This meeting was the third of three held on the same date. This third meeting was a continuation of the one scheduled for 11:00 a.m.] PRESENT Committee members present at the call to order were Representatives Dyson, Phillips, Green, Harris, Porter, Smalley, and Whitaker. SUMMARY OF INFORMATION CHAIRMAN WHITAKER introduced Dale Bagley, Kenai Peninsula Borough Mayor, who narrated a visual presentation on the Cook Inlet Pipeline Terminus Group's proposal for an Alaska natural gas pipeline terminal at Nikiski on Cook Inlet. MAYOR BAGLEY began by noting that there are several proposals for natural gas projects. However, Alaska's North Slope has an estimated 35 trillion cubic feet of natural gas, enough gas for all. Members of the Alaska North Slope Liquefied Natural Gas (LNG) project sponsor group are ARCO Alaska, Foothills Pipe Lines, Ltd., Marubeni Corporation, Phillips Petroleum Company, and BP Exploration (Alaska) Inc. This group is in the final months of Phase 1 of the development of a $20 million construction project to bring Alaskan natural gas to an Alaskan port. This project will provide clean energy, clean industry, and long-term, quality jobs for Alaskans. The sponsor group is considering building a terminus either at Nikiski on Cook Inlet or on Anderson Bay near Valdez. The Peninsula Group supports the Cook Inlet location because there are more potential customers there; the supply of natural gas is not growing to meet consumer demand; and Alaska Nitrogen Products, a major employer on Cook Inlet, needs new souses of natural gas. Value-added processing of Alaskan resources strengthens the state's economy. North Slope gas provides an opportunity for value-added industries. Those industries need space for facilities, storage, and housing, and Cook Inlet has the space to accommodate industrial growth. The region also has a 31-year relationship with the natural gas industry, resulting in infrastructure, a trained workforce, and market experience. MAYOR BAGLEY concluded that all of Alaska would benefit from locating the gas pipeline terminus at Cook Inlet. In a question-and-answer session following the presentation, Mr. Bagley provided additional information including: Having BP Exploration (Alaska) Inc. as a member of the Cook Inlet Pipeline Terminus Group strengthens chances of the proposal coming to fruition. If a port authority approach provides economic benefits to a gasoline project, it will work wherever a gas line terminates. The relationship of the state to any port authority needs to be clearly spelled out because there are economic trade-offs. No matter which route the pipeline takes, there will be some permitting and environmental hurdles to overcome. There are already rights of way for the railroad and highway along the railbelt route that could minimize the impacts of a pipeline in that area. However, this is a long-term project with long-term economic benefits, and any initial obstacles should be weighed in relation to that. All Alaskans should get behind the gas pipeline project, whichever route is chosen, as all Alaskans will benefit. COMMITTEE ACTION The committee took no action. ADJOURNMENT The meeting was adjourned at 1:35 p.m. NOTE: The meeting was recorded and handwritten log notes were taken. A copy of the tape and log notes may be obtained by contacting the House Records Office at 129 6th Street, Suite 229, Juneau, Alaska 99801-2197, (907) 465-2214, and after adjournment of the second session of the Twenty-first Alaska State Legislature this information may be obtained by contacting the Legislative Reference Library at 129 6th Street, Suite 102, (907) 465-3808.