House Approves In-State Gas Line

The House early this morning approved on a 27 to 12 vote, a bill directing the next steps  toward an instate gas pipeline from the North Slope to Anchorage and South Central.   The bill authorizes $400-million for what is estimated to be a $7-Billion project.

Supporters called the bill a starting point for a project that would offset concerns about energy supplies to the railbelt.   Anchorage Republican Mike Hawker said the bill does not describe a final project in any way.

What has been discussed so far, from the standpoint of those people moving a project forward, is what they are calling a base case.  It is to put on paper a potential proposal that is then developed sufficiently to take it to the open season where we let the markets have their say. The willing buyers and the willing sellers who will find out if there is a viable financial transaction to be put together.

In a floor session lasting seven hours,  Minority Democrats unsuccessfully introduced seventeen amendments – most of which addressed issues involving gas availability to Fairbanks and the interior , and others increasing regulatory oversight — protecting consumers concerned about the possibility of high prices.    Anchorage Democrat Les Gara argued that the plan does not allow the Regulatory Commission of Alaska to exercise its protective function.  He argued that the prices will be set by the sellers and the pipeline company with little, if any, state control.

I do not trust that private corporations will always have the interests of our consumers in mind.  I do not trust that the major oil producers in the state will always have the interest of Alaskans in mind.   So to let them set the rates without any meaningful review by a consumer protection agency is the wrong way to go.

The bill’s sponsor,  Speaker Mike Chenault (R-Nikiski),  said Alaskans have been waiting for a gas line for thirty years.  He said without the project described in the bill,  the state has no options except to watch the Railbelt run out of energy.  He said the success of the project will rely on alignment of all the stakeholders and interested parties – and right now the project in the bill is the only opportunity that could make that happen.

You’re not going to have a pipeline project without shippers and without customers. And that’s just plain and simple.  We can wait as long as we want,  but until we can get those two groups together, we’ll never have a project.  And if we continue shooting ourselves in the foot,  I can guarantee you we’ll never have a gas pipeline.

The bill – HB-9 – was introduced in the House at the beginning of last year’s session.   The Senate got it this morning and assigned the bill to three committees.  It faces a daunting course for the final eighteen days of the session.   Senate Majority spokesperson Carolyn Kuckertz said the bill represents a major project that could cost a lot of money and have considerable impacts on the state.  She said the Senate leadership has committed to trying to get through with work on it this year.