• Forecast
  • News Tip
  • Categories
Temperature Precipitation
Estimated read time
5m 55s

House takes the reins on LNG project bill

By Rhonda McBride 5:27 AM March 21, 2014

House majority leaders say they’re ready to ask tough questions about SB 138

JUNEAU – “There’s no greater task facing us this session,” said Rep. Dan Saddler, co-chairman of the House Resources Committee.

The task at hand: The House has less than a month to finish work on Senate Bill 138, which would get the wheels in motion for the Alaska Liquefied Natural Gas Project.

AKLNG, as envisioned now, would be a team effort between the state, three oil companies and a pipeline builder. SB 138 would allow the partners to move forward on a high-risk venture — to build massive infrastructure to move North Slope gas to markets all over the world.

The riskiness of AKLNG is the one thing everyone seems to agree upon, but how to manage that risk of a project estimated to cost as much as $65 billion is an entirely different matter.

Lawmakers have said SB 138 is probably one of the most complicated bills the Legislature has probably ever dealt with.

Sen. Peter Micciche said lawmakers usually learn about the imperfections of bills many years down the road. He’s hoping the House will prevent this from happening by improving upon the Senate’s work.

“And we should remain flexible to improve those processes as we move through this,” Micciche said.

Republican majority leaders signaled this is their goal at their weekly news conference on Thursday.

The first stop for the bill is House Resources.

“We will do our due diligence and try to delve as deeply into the bill as we can,” said Rep. Eric Feige, co-chairman of the House Resources Committee.

Feige rolled out the game plan, which includes boosting the number of hearings.

On the week of March 31, the committee will take public testimony.

“There’s certainly plenty of material for discussion,” said co-chairman Rep. Dan Saddler. “Watch the rather long schedule of accelerated meetings we’re going to have during the business hours of the day and after hours in the evenings to let the public watch.”

“And we do plan to take considerable time to let the public ask their questions and give us their comments on things,” Saddler said.

During the Senate process, there was mostly invited testimony — and most it from the governor’s executive branch and experts hired by the state.

A sore point for Democrats was the failure of the Senate to take testimony from two consultants, Roger Marks and Rick Harper, who have been critical of how the governor has structured the project. Both have written reports for the Legislative Budget and Audit Committee, advice that the Legislature paid for.

Feige said he would allow Roger Marks, a petroleum economist, to testify. Marks, who is critical about the state’s partnership with TransCanada, is scheduled to appear before the committee on Thursday, March 27.

But Feige said the resources committee does not plan on inviting Harper to appear before it.

Harper is a former president of ARCO Gas, with experience in LNG and pipeline projects all over the world.

Feige said he read Harper’s research paper but found it lacking.

In his report, Harper said the deal as it’s structured now would make it hard for new companies to get in on the project. The consultant also raised questions about the state’s status as a minority owner, and whether it should accept gas instead of cash in exchange for royalties and taxes.

Feige believes the bill will get a lot of scrutiny in the House.

“Because of the depth and the talent on the committee, you’re going to see a lot of in-depth, pointed questions, looking at a fairly high level of detail,” Feige said.

Feige promised the committee would go over the bill, line by line.

“We’ve spent a lot of time on background leading up to this point,” Feige said. “And now, for the next two weeks, we’ll be able to vote virtually 100 percent of our time just to this bill.”

Democrats are hopeful that the House will give the bill the attention it needs.

“There are a lot of unanswered questions,” said Rep. Scott Kawasaki, one of two Democrats on the nine-member Resources Committee.

“I think we have a lot of work to do here in the House, and I think the House Resources Committee will be that first committee to really ask those tough questions,” Kawasaki said.

“I feel confident we can do it. Again these are very, very complex questions,” Kawasaki said. “This is a multibillion-dollar, multiyear project.”

House Minority Leader Chris Tuck said one of the challenges is the state doesn’t have the expertise the oil industry does.

“A lot of the stuff that’s coming out right now, we’re not even sure we’re asking the right questions,” Tuck said. “We need to have time to evaluate this.”

A major concern of the Democrats is the state’s ownership in the pipeline.

Under the proposed deal, the state would share a 25 percent stake in the project with TransCanada, who would put up the cash for the initial investment and allow the state to buy back 40 percent of it. If you do the math, it means the state only winds up with a 10 percent stake in the pipeline.

Democrats argue this is not enough of a stake to keep from being walked over by oil companies. They believe the state should have a 51 percent majority ownership in the project.

House Speaker Mike Chenault said 51 percent ownership also means the state assumes more than half of the risk.

“I’ll just say all it takes is money,” Chenault said. “You can throw an amendment out there to do anything you want. Fifty-one percent of this project is 30-something billion dollars at the high end.”

“Like I say, all it takes is money. But in this game, that’s a lot of money,” Chenault said.

Republican leaders in the House are open to looking at other options beyond the ones outlined in SB 138, as well as the agreements reached with the oil companies and TransCanada before the bill was introduced.

But  Feige said there’s one change the Senate made the committee wants to keep — a provision in which a portion of gas revenues go to an energy infrastructure fund which would primarily be used to help remote communities pay for projects to ease high energy costs.

“This gas line is not just for the Railbelt, but it’s for all Alaskans,” Saddler said. “I think it does give some reassurances to Alaskans that this is a statewide project, that their interests are being considered — and we hope — addressed.”

Feige has set an aggressive timetable for moving the bill out of committee. The target date is now April 4 — leaving only 17 days left in the 90-day session for the bill to be vetted by two other committees, labor and commerce and finance.

If the bill passes the House, it’ll be sent back to the Senate to reconcile any differences.

But first, there’s that self-imposed April 4 deadline looming.

“I’m not going to make a prediction about whether we’ll hit that target,” Feige said.

Latest Stories

  • Neighbors, close family friends react to Utah man accused of murdering wife on cruise

    by Steffi Lee on Jul 27, 22:30

    A Utah man is now facing a federal murder charge — accused of killing his wife, 39-year-old Kristy Manzanares, on a cruise ship traveling in Alaska.  Kenneth Ray Manzanares, of Santa Clara, Utah, made his initial appearance in federal court Thursday. According to a criminal complaint, on July 25, Emerald Princess Security and Medical personnel responded […]

  • Politics

    Senate GOP’s “skinny repeal” bill dies in middle-of-the-night vote

    by CBS News on Jul 27, 22:13

    Senate Republicans’ attempt to repeal parts of the Affordable Care Act died early Friday morning, with three GOP senators — Sen. John McCain, Sen. Susan Collins and Sen. Lisa Murkowski — voting against the proposal. “So … this is clearly a disappointing moment,” Senate Majority Leader Mitch McConnell, R-Kentucky, said right after the bill failed. […]

  • Politics

    Larry Persily on political drama in Washington DC

    by KTVA Web Staff on Jul 27, 22:04

    Both Senators: John McCain and Lisa Murkowski, are in the center of the political drama playing out in Washington DC, with plot lines that could be straight out of a movie. Larry Persily was the federal coordinator for Alaska Natural Gas Transportation projects and has worked for three governors and advised many state legislators, including […]

  • Former pro golfers come to Alaska to help future players

    by Dave Leval on Jul 27, 20:15

    Katelin Richards gets a different challenge every time she steps on the golf course. “Right now, my short game, my chipping and putting has been off,” said the 15-year-old player. Richards and other junior golfers ventured onto the Anchorage Golf Course to improve their game. They also received some first rate help. Janet Anderson won […]

  • On-Air

    Reality Check w/ John Tracy: Sen. McCain calls for bipartisanship, but is Washington listening?

    by John Tracy on Jul 27, 19:42

    There must be something about facing your own mortality, that provides a bit of clarity on the value of your life’s work.  I think that’s what we were seeing on Tuesday when Senator John McCain cast the deciding vote on advancing his party’s healthcare bill and then proceeded to take his colleagues to the woodshed […]

  • News

    APD bike patrols covering Anchorage

    by Lauren Maxwell on Jul 27, 19:18

    The Anchorage Police Department is covering some new territory this summer and they’re doing it on two wheels. Officers on bikes are patrolling more areas than ever before. APD’s bike patrols are made up of teams of school resource officers. They work in the schools in the winter and hit the trails during the summer. […]

  • Man with hatchet charged with attempted murder on officer

    by KTVA Web Staff on Jul 27, 18:52

    An Anchorage man was charged with attempting to kill a police officer with a hatchet. Police say on May 25, around 4:28 a.m., they responded to a report of someone breaking into cars near Morningside Loop, between Old and New Seward Highways. When police arrived, they say they tried to make contact with the suspect, 32-year-old Howard […]

  • Politics

    Two House Democrats call for investigation into calls made to Alaska’s senators

    by Bonney Bowman on Jul 27, 18:24

    Two House Democrats are calling for a formal investigation after they say the Interior Secretary threatened Alaska’s senators over healthcare. Thursday afternoon, Natural Resources Committee ranking member Raul Grijalva (D-AZ) and Commerce Committee ranking member Frank Pallone (D-NJ), sent letters to the Department of the Interior Inspector General and the Government Accountability Office. They want […]