House Passes In-State Gasline Bill

In a literal eleventh hour vote on Monday night, the Alaska House passed legislation meant to advance the construction of a small-diameter pipeline. The line would transport natural gas from the North Slope to Southcentral for Alaskan consumption and, potentially, for export.

While the bill had been moving at a sluggish pace in the House, Republican leadership put it on the fast track with just two weeks left to the legislative session. The 20,000-word bill would make the Alaska Gasline Development Corporation its own separate entity, and position it to receive $225 million in state funds this year. Bill sponsors had hoped to secure $400 million for design and permitting work need before the project can go to an open season. After that, the plan is to let the private sector take over construction.

Support for the bill was largely split on caucus lines, with Democrats making multiple attempts to amend the document. One amendment would have put into statute language prioritizing the Alaska market over foreign demand in the event of a gas shortage. Another would have given the legislature final approval of a pipeline plan before construction. As written, control of project implementation falls to AGDC and private firms. Rep. Les Gara, of Anchorage, called the amendment a matter of public oversight.

“The bill is written to say [that] by passing this bill, this is final legislative approval,” said Gara. 
”The public can talk all it wants in the future about how high the price of gas might be under this project, but nobody will be there to listen.”

Rep. Mike Hawker, an architect of the bill, responded that any pipeline would be reviewed by the Regulatory Commission of Alaska and an AGDC board made up of the governor’s appointees.

The Anchorage Republican’s opposition to the amendment also had a philosophical basis. The key principle for him in drafting the bill was market efficiency.

“Why in the world would we want the legislature to interfere in a private sector transaction that actually moves a pipeline project forward?” asked Hawker. “I don’t think we ought to be there.”

All eight of the Democrats’ amendments failed, though a pair of measures concerning local hire received some Republican support. The gasline bill ultimately passed 30 to 9, with four representatives splitting from their caucuses on the vote. Democrats Max Gruenberg, of Anchorage, and Scott Kawasaki, of Fairbanks, voted yes on the bill. Neal Foster of Nome broke with the majority, along with Eric Feige, a Chickaloon Republican who also represents Valdez. The City of Valdez has been an advocate for a bigger pipeline, and it was behind a million-dollar advertising campaign against the bill because of how it might sideline AGIA.

A similar gasline bill died in the previous legislature.

The bill will now be sent over to the Senate, where it is tentatively scheduled for hearings in the resources and finance committees.