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Democrats call for more public input, education on Alaska LNG Project

By Rhonda McBride 5:55 AM March 5, 2014

Is the public up to speed on natural gas project?

JUNEAU – The legislative session will officially be halfway over on Thursday, with 45 days to go.

Is that enough time for lawmakers and the public to vet Gov. Sean Parnell’s natural gas legislation?

Senate Bill 138 would give the state between 20-25 percent ownership in a liquefied natural gas project – which includes a gas treatment plant on the North Slope, an 800-mile pipeline to Cook Inlet and a liquefaction plant to turn the gas into a liquid so ocean tankers can deliver it to market. The price tag for this megaproject is estimated to run between $45-65 billion.

So far, there have been numerous hearings on SB 138, as well as the agreements leading up to the measure. Most of the testimony so far has come from the governor’s staff and from consultants; one for the governor and another for the state.

But only two of those hearings have included public testimony: one in the Senate Resources Committee, and another on Tuesday in the Senate Finance Committee.

Only a few people from the general public testified on Tuesday. Most of those who spoke, such as representatives from various labor unions and construction groups, had a vested interest in the project.

Bill Warren called in from Kenai. He introduced himself as an “old pipeliner.”

“You’ve got a big, big job,” Warren said. “Please do it right for us.”

Warren worked on the Trans-Alaska Pipeline and ever since, he’s dreamed of moving North Slope gas to market.

Barbara Huff Tuckness brought a reminder of how long Alaskans have held on to this dream. She’s the legislative and governmental affairs director for Teamster Local 959.

“Gasline controversy rages on,” she said, holding up a newsletter during her testimony. “This is a teamster’s newsletter that’s dated 1977.”

For many years, the gas on the North Slope has been called “stranded gas,” because it’s literally “stranded” from any market.

There have been numerous false starts on a pipeline. But many lawmakers believe the time for a natural gas project has finally arrived, now that Alaska’s three major oil producers and a pipeline company are all interested in a partnership with the state.

They want to strike while the iron’s hot. But at Tuesday’s hearing, a former state oil and gas attorney had a warning for lawmakers.

“This is a major public policy decision. It’s got lots of risks and benefits,” Laura Weissler said. “It really warrants more public discussion.”

Democrats couldn’t agree more.

“We can’t rush this proposal. We can’t rush this request from the governor,” said Rep. Scott Kawasaki of Fairbanks.

House Minority Leader Chris Tuck of Anchorage believes lawmakers should hold statewide hearings to educate the public about the magnitude of the choices ahead.

If all goes well with the Alaska LNG Project, the state could eventually earn about $2-3 billion a year, as well as supply gas to Alaska homes, businesses and new industries, which would in turn supply new jobs. ExxonMobil has said that at peak construction, the project would generate 15,000 jobs.

But if things don’t go well — if there are cost overruns or major delays, or if it turns out there’s not a viable market for Alaska gas — the state could wind up deeply in debt if it becomes a partner in the project.

There are also questions about whether the state would be better off remaining as a regulator and simply collecting royalties and taxes.

“The only public process we’re having is these hearings,” Tuck said. “And the public does not have enough information to weigh in.”

Although public participation in Tuesday’s hearing was relatively small, Sen. Anna Fairclough, who is vice chairwoman of the Senate Finance Committee, said she’s not concerned.

“Usually people call in when they see big things wrong,” said Fairclough, who believes the lack of people calling in to testify may suggest there’s widespread support for the project.

But the lack of engagement might also be because most people don’t have a clue.

A lunchtime survey of customers at the Hangar Restaurant in Juneau might offer some insights about how well informed the citizenry is.

Most didn’t know what the acronym LNG stands for.

“LNG. I’ve seen it. But I don’t know what it means,” said Leona Williams, an elderly woman who was eating lunch with her husband.

Eric Elmer took a guess.

“The stuff you burn in your stove?” asked Elmer.

Elmer’s wife Trina, who was helping her 5-year-old son Michael use crayons to color a drawing on a paper placemat, didn’t know what LNG is either.

She and her husband also hadn’t heard about SB 138 or plans to build a natural gas pipeline from the North Slope.

But she was pretty clear that her son’s future is a priority.

“I hope he grows up and gets a good education and a job,” she said.

“I hope he works on the pipeline,” her husband chimed in.

And at that point, Michael — who was growing tired of the adults ignoring him — blurted out, “I hope you just don’t say any more words.”

Some lawmakers are of the same mind. They’re tired of words and want action.

Senate President Charlie Huggins said during his years in the Legislature he’s seen too many false starts.

“This is the fourth pipeline scenario,” Huggins said, “and I think it’s about time we build one.”

Huggins and other majority leaders also believe the public’s time to participate will come later.

The purpose of SB 138 is to allow the partners in the LNG project to get a better handle on the costs, investigate financing and to market Alaska gas  – to find out if there are enough customers to make the project pencil out.

Huggins said the public should not worry that SB 138 will permanently commit the state to building an LNG project.

“The comforting thing about this proposition for us, it’s a stepped process,” Huggins said. “We don’t have to be too bold in the first step, but we have to have a bit of courage.”

Supporters say the process is structured with “exit ramps,” so partners can choose to opt out at various points along the way.

Sen. Cathy Giessel, co-chairman of the Senate Natural Resources Committee, said she’s confident the project has public support, based on a recent poll as well as from public testimony in her committee, which she said had at least 50 citizens who were not speaking on behalf of an organization.

Sen. Click Bishop, a Fairbanks Republican, said he cares very much about what the public thinks.

“I’m not going to be a senator for life,” Bishop said. “I want to go back home. I just want to make sure I’m not tarred and feathered in my own community.”

And that’s the danger, Democrats warn. They say the public is like a sleeping giant that, if awakened too late, may feel betrayed and rebel.

Kawasaki believes the referendum on last year’s oil tax bill, SB 21, began because the measure was fast-tracked and didn’t get adequate hearings.

Meanwhile back at the Hangar Restaurant, Amity Schwartz is waiting on tables.

When she was asked about what she thought about state investment in an LNG project, she wasn’t clear about its geography.

“Part of the reason I haven’t even thought about it, is, I didn’t know it was going to come through Juneau,” Schwartz said.

Schwartz doesn’t have to worry. The pipeline isn’t coming to Juneau.

One of the customers dining at the restaurant who was familiar with the project was sympathetic. She said young people like Amity are too busy trying to earn a living to pay close attention to politics.

Besides, people have gas line fatigue. They’ve heard about so many projects over the years and nothing ever came to fruition. Who is to say whether this project will be any different?

Mike Schwartz, another customer, isn’t sure he has all that much to offer in the way of public comment.

“I’m a commercial fisherman. I can tell you about sockeyes and how to get them out of a net,” Schwartz said. “But I can’t tell you about the best way to go about getting the best for our people here.”

Schwartz shouldn’t feel too bad. Even some of the experts aren’t sure either.

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