• Forecast
  • News Tip
  • Categories
Temperature Precipitation
Estimated read time
2m 50s

Debate over LNG heats up as the session winds down

By Rhonda McBride 12:42 PM April 12, 2014
JUNEAU –

With just a week left in the legislative session, some are asking if a liquefied natural gas project that could bring tens of billions of dollars to the state is possible.

On Thursday, the House Finance Committee heard from Rick Harper, a consultant who raised some serious questions about the proposal.

The co-chairman of the finance committee, Rep. Bill Stoltze, said he scheduled Harper to testify following a request by Democrats on the committee. And Stoltze said he thought it was a fair thing to do.

Harper has consulted for the state for years on oil and gas issues. And he’s seen many efforts to get North Slope gas to market fail.

But this project, he says, actually has a good chance of happening. But he has a warning.

“I will tell you from the get go, that my chief concern is the royalty in kind versus the royalty in value,” he said.

For oil, the state has primarily taken its royalties and taxes as cash.

Under the lease agreement, oil companies don’t charge the state for marketing its share of the oil.

But under the governor’s plan, the state would receive gas.

“It’s a huge concession that we’re giving the industry,” said Sen. Bill Wielechowski. “The current leases require they have a duty to produce, they have a duty to market the gas. “

Wielechowski believes the reason Harper hasn’t been heard from until now is because he’s a contrarian voice.

“He’s eminently qualified. In fact he’s probably the only expert that we’ve had that’s actually built pipelines. He’s actually managed LNG plants,” Wielechowski said. ”He’s someone we’ve been using in this state for decades. Republicans have used him for years.”

Commissioner of Natural Resources Joe Balash said the issues flagged by Harper are risks the state is aware of and has taken steps to mitigate.

The administration says there’s a reason there will no longer be an either/or choice for royalties and tax payments.

Gas contracts are long-term. And it’s not a good idea to switch back and forth.

“Virtually every lease I’ve ever seen and ever helped negotiate in the oil and gas industry has in it the right to take your share in kind,” Harper said. ”I personally have never seen it once exercised.”

Harper told lawmakers the state could take on a lot of risk marketing its own gas.

“The state is a minority player, not only in terms of the production from the North Slope area, but a minority player in terms of the world stage,” he said.

The administration of Gov. Sean Parnell says it could still turn out that oil producers will market the state’s gas. And the understanding now is that the state will not be charged for this service.

The state also wants the option to try marketing its gas on the table.

“There might be buyers out there who can provide the capital necessary to pay our share of infrastructure,” Balash said.

Infrastructure that will be the largest megaproject in Alaska’s history. The cost could run as high as $65 billion.

The administration said state ownership could help bring that cost down and make the project more likely to happen.

The governor’s legislation, SB 138, lays the groundwork for state partnership between Alaska’s three big oil producers and a pipeline company.

The House Finance Committee heard public testimony on the bill at 8 a.m. Saturday.

Latest Stories

  • On-Air

    Reality Check w/ John Tracy: The real reason to observe Memorial Day

    by John Tracy on May 26, 16:48

    I don’t know what you’re doing this Memorial Day, but chances are it will bear little resemblance to the reason we observe it. Whether you consider it the official start of summer, or the time to get a great deal on an appliance, the origins of the holiday can be traced to one of the […]

  • Weather

    Dangerous fire conditions across southcentral Alaska this weekend

    by KTVA 11 News on May 26, 16:45

    A fire weather watch has been issued for the Susitna Valley and Copper River Basin for the Memorial Day weekend. The watch goes into effect on Friday afternoon and continues through Saturday evening. Over the weekend, temperatures are forecast to climb into the 60s and 70s across southcentral Alaska. The warming temperatures, along with low relative […]

  • Politics

    Trump agrees to debate Sanders; Fox News is ‘interested’

    by Associated Press on May 26, 16:10

    WASHINGTON (AP) – Donald Trump is welcoming Bernie Sanders’ proposal that they meet in a debate but is setting a high price for participating. His condition: The hosting TV network would have to put up millions of dollars for charity. Representatives for Fox News and ABC News say the networks are “interested” in hosting such […]

  • Crime

    Drunk man steals front end loader, smashes it into liquor store and runs from police

    by KTVA CBS 11 News on May 26, 12:51

      ANCHORAGE — An intoxicated man led Anchorage police on a chase early Thursday morning after stealing a front end loader from a construction site, then crashing it into a liquor store and stealing booze. Police were called to the Brown Jug Liquor store at 2200 Northern Lights Blvd. around 3:20 a.m. Thursday after a […]

  • Crime

    Two men arrested in connection with East Anchorage shootings

    by KTVA CBS 11 News on May 26, 12:25

    The Anchorage Police Department has arrested and charged two men in connection with two East Anchorage shootings Thursday. According to a release from APD, both shootings happened just after 11 a.m. Thursday. Police said they were first notified of an incident involving a gun at the 4300 block of E. 9th Avenue. Police were told […]

  • News

    Alaska Wildlife Troopers to sell 121-foot law enforcement vessel

    by Associated Press on May 26, 11:06

    The state is selling a 121-foot law enforcement vessel used for investigating commercial fishing violations. Public safety officials say the loss of the Kodiak-based Woldstad for budget reasons means more violations will go undetected by Alaska Wildlife State Troopers. A civilian crew of four operated the vessel. Those jobs will be eliminated, saving the state […]

  • Weather

    Garden Report: Memorial Day planting leads to Labor Day harvest

    by Rachael Penton on May 26, 10:54

    Memorial Day weekend marks the unofficial start of the outside planting season in Southcentral Alaska. The growing season is short, so there’s no time to waste when it comes to getting your summer vegetable gardens started. Darryl Leiser of Dimond Greenhouse in Anchorage says that cold climate plants like cabbage, cauliflower, broccoli, Brussels sprouts, kale and […]

  • Crime

    Man charged with murder in South Anchorage gas station shooting

    by KTVA CBS 11 News on May 26, 8:37

    The Anchorage Police Department has charged a man in the shooting death of another man in the parking lot of a South Anchorage Holiday gas station Wednesday night. According to a statement from APD Thursday morning, 23-year-old Andrew Robertson-Goughnour shot and killed 19-year-old Brandon Merritt near the gas pumps at the gas station on Abbott […]