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Eye on the Capitol: Week 6 analysis and review

By Rhonda McBride 7:03 AM March 3, 2014

The wild ride only gets wilder as session approaches halfway point

Social issues dominate

Most of the oxygen in the state capital last week seemed to be consumed by social issues.

An abortion bill moved out of the House Finance Committee on a narrow 6-5 vote. SB 49 has already passed the Senate on a 14-6 vote, so the measure only has a few more steps to go — some more debate and a vote on the House Floor. If it passes, the bill goes to the governor to be signed into law.

SB 49 seeks to strictly define how an abortion can qualify for Medicaid funding. Only physical conditions are allowed. Mental health or emotional problems are not.

There was an attempt to add a family planning component to the bill, a measure supporters argue would help to prevent abortions, but it failed.

Also on the social issues front was Sen. Hollis French’s proposed constitutional amendment reversing the ban on same-sex marriage, as well as debate on a civil rights bill that would protect Alaskans from discrimination based on gender or sexual orientation.

At a House majority news conference on Thursday, when a reporter asked majority leaders about their positions on same-sex marriage, Rep. Ben Nageak of Barrow expressed frustration.

“If you fall in love with someone, you should be able to do something about it,” said Nageak, who wishes other pressing issues like the high cost of energy for Rural Alaska would get more attention.

“We need to fund education. We need to do all this stuff. And here we are talking about something we have no control of,” Nageak said.

Rep. Craig Johnson said he still believes a marriage is between a man and a woman, though he questioned whether government should be involved in this issue.

Sam Kito III sworn in

There was moment of harmony this week — the swearing in ceremony of Rep. Sam Kito III, the Alaska Native chosen to fill Beth Kerttula’s Juneau and Southeast Alaska seat.

In the gallery, there were a number of prominent Alaska Natives on hand – including two former lawmakers who had lost their seats after redistricting – Sen. Albert Kookesh and Rep. Bill Thomas. Byron Mallott, an Alaska Native who is running for governor, was also seated in the gallery.

Kito seemed ready to move forward; quietly meeting with constituents and getting his office in order.

Alaska LNG project moves forward

Meanwhile, committee hearings on the Alaska Liquified Natural Gas Project moved full speed ahead.

A taxi cab driver asked me this week just what is “liquefied” gas, or LNG.

I’m glad he didn’t ask me anything else: That question, I can handle. I explained that LNG is gas that is super-chilled into a liquid, so it can be carried away on big ships and converted back into gas when it arrives at its destination. The tankers that carry LNG have been described as moveable pipelines.

My conversation with the cab driver was a reality check. The governor and his staff are way out in front of the public on this, despite their repeated and well-organized PowerPoint presentations in the Legislature.

It can’t be a good thing for the public to be so in the dark about something so important to the state’s future.

By the way, I can relate to the cab driver. A lot of the terms I hear at these committee hearings go over my head every day. It’s a language unto itself.

At various committee meetings this week, you could see lawmakers struggle to get their arms around how the Alaska LNG Project would work — how three oil producers, a pipeline company and a state corporation, together, would make this $45-65 billion project a reality.

At one hearing, where all the partners had a seat at the table, Sen. Mike Dunleavy kept pushing to find out who is in charge of the project, and with some prodding, the answer finally came out. ExxonMobil is taking the lead in this project.

At least now we know.

But the truth is, there are a lot of unknowns and the governor’s legislation comes down to an agreement to search for answers.

No one knows for sure if there are customers to buy our gas, or whether there are banks and other lenders who would risk investing in the project. The governor’s legislation, SB 138, would kick-start the process of finding out.

Some of the big questions remain:

·      Should the state invest in the LNG project – and if so, how much?

·      Should the state strike a deal with TransCanada to front the state money for some of its share of the investment – and give the state the option to buy some of it back? In exchange, TransCanada gets a piece of the action.

·      Should property taxes be handled differently than they were with the Trans-Alaska Pipeline? The producers don’t want to pay property taxes as they do now on TAPS. They prefer payment in lieu of taxes, or PILT.  Most likely, this would be a flat tax, with mayors skeptical about how these rates would be negotiated.

·      Should the state receive its taxes and royalties in gas or cash?

·      What would the state lose if it chose not to partner with the producers and TransCanada? Some estimates say state investment in the LNG project could bring Alaska returns of $2-3 billion a year.

·      What would the state gain at various levels of investment?  What are the risks if the price of natural gas falls to the floor?  How low can it go before the state is in trouble?

There’s not a lot of time left in the session to do justice to the Alaska LNG Project — let alone deal with looming budget cuts — with so many social issues dominating the agenda.

Democrats may be adding to the clutter. This week they introduced oil tax legislation very similar to another bill they’ve already introduced, which would come into play should last year’s tax reform under SB 21 be repealed by voters later this year.

Session is almost half over

And speaking of time, we’re speeding towards the halfway mark.

This coming Thursday, March 6, we’ll hit day 45 of the 90-day session.

Expect the wild ride to keep on getting wilder.

EPA decision on Bristol Bay heightens federal overreach controversy

Although the federal overreach issue has been like a pot stewing all session, on Friday it started to bubble over with the news that the U.S. Environmental Protection Agency is stepping in the middle of the Pebble Mine project.

The EPA has taken an unusual step in preempting the state’s permitting process by using its authority under the Clean Water Act, and may eventually block the mining project even though it’s on state land.

On the House Floor on Friday there were passionate reactions.

Rep. Eric Feige, a Republican and co-chairman of the House Natural Resources Committee, railed against the EPA decision.

Feige said the mine could be another Prudhoe Bay, worth more than a trillion dollars.

“That’s not millions, that’s not a ‘B’, that’s a ‘T.’ That is a very conservative estimate of the value of the resource line to the west of Iliamna in the Pebble Deposit,” Feige said.

“It is up to the state of Alaska to manage our land,” Feige told lawmakers.

“The federal government coming in, and once again, even taking steps towards what may be an administrative veto, represents a significant overreach on the part of the federal government and something rather unprecedented — certainly in our state’s history as well as many other states across our country,” Feige said.

“What is happening to the rule of law in our nation?” he asked. “What is happening to due process?  What is happening to our country as a whole?”

Rep. Bryce Edgmon, a Democrat who represents the Bristol Bay region, countered by reminding lawmakers that the people of his region might not have turned to the EPA for help had the legislature funded an independent study of the proposed mine.

“I am in support of the watershed assessment — to look at the watershed in its entirety, which I truly wish we could have been initiated at the state level,” said Edgmon, who told lawmakers that if he were king for a day, he would have preferred to have the conversation about Pebble in a more neutral environment, without hackles being raised.

Edgmon said he’s glad the EPA intervened because the Pebble project is truly different.

“It’s far more complicated than any other large scale, at least mining projects I would assert, that we ever known in the state of Alaska and perhaps ever known in the continent of North America — or perhaps even the globe itself,” Edgmon said.

“The numbers in my region are astonishingly and overwhelming against the project,” he said.

Edgmon reminded lawmakers that Pebble sits at the headwaters of some of the most productive salmon streams in the world.

Though their views are worlds apart, both Feige and Edgmon made eloquent arguments.

There is one thing everyone will probably agree on: In an already crowded legislative tent, the Feds just pushed another elephant-sized issue inside — one that is both emotionally charged and tests the limits of Alaska’s owner state concept.

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