Lawmakers relieved as Gov. Walker removes contentious gas reserves tax from agenda

House Speaker Mike Chenault (R-Nikiski) stands in the back of the House Finance Committee hearing on Saturday. Lawmakers heard the administration's case for taking a larger stake in the proposed gasline project, Alaska LNG. (Rachel Waldholz/APRN)
House Speaker Mike Chenault (R-Nikiski) stands in the back of the House Finance Committee hearing on Saturday. Lawmakers heard the administration’s case for taking a larger stake in the proposed gasline project, Alaska LNG. (Rachel Waldholz/APRN)

Lawmakers are in Juneau this week for a special session on the state’s massive gas line project.

The session may be a little less contentious – and a little shorter – than expected, after the Governor pulled one item on the agenda, at the last minute.

At a press conference Friday, less than 24 hours before lawmakers gaveled in for their third special session of the year, Governor Bill Walker announced that he would not introduce his most controversial proposal – a bill to tax natural gas reserves.

Walker said he was taking the step after receiving assurances from the state’s partners in the Alaska LNG project, that if any one company pulls out, it will not withhold its gas from the pipeline.

Walker released letters from BP and ConocoPhillips, and said he had verbal assurances from ExxonMobil, that they would negotiate some kind of withdrawal agreement by Dec. 4.

“What it gives is the assurance that we’ll have gas for our gas line,” Walker said.

House Finance Co-Chairs Mark Neuman (R-Big Lake) and Steve Thompson (R-Fairbanks) confer during Saturday's hearing. The House and Senate Finance committees have most of the work this session, as lawmakers consider buying out TransCanada's stake in the Alaska LNG project. (Rachel Waldholz/APRN)
House Finance Co-Chairs Mark Neuman (R-Big Lake) and Steve Thompson (R-Fairbanks) confer during Saturday’s hearing. The House and Senate Finance committees have most of the work this session, as lawmakers consider buying out TransCanada’s stake in the Alaska LNG project. (Rachel Waldholz/APRN)

The state is working with the three oil companies and the pipeline builder TransCanada on the project, which would carry natural gas down from the North Slope to the Kenai Peninsula for export.

Walker had proposed the reserves tax when the parties could not come to an agreement earlier this fall. It would have docked companies for natural gas that was left undeveloped.

The legislature’s Republican leadership expressed relief at the governor’s decision, and said it allows lawmakers to focus on the big picture.

“We’re here to advance a project that gets North Slope gas to Alaskans – and the world beyond – without breaking the state’s bank,” Senator Cathy Giessel, an Anchorage Republican and chair of the Senate Resources Committee, said.

Without the reserves tax, there is one major item on the agenda: whether the state should buy out TransCanada. That company currently shares the state’s one-quarter stake in the project.

The Administration is requesting $157-million to buy out TransCanada and fund the state’s work through the current planning phase.

If the Alaska LNG project ends up going forward, the buy-out would double the state’s share of the cost, to an estimated $14 to $16-billion.

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Rachel Waldholz covers energy and the environment for Alaska's Energy Desk, a collaboration between Alaska Public Media, KTOO in Juneau and KUCB in Unalaska. Before coming to Anchorage, she spent two years reporting for Raven Radio in Sitka. Rachel studied documentary production at the UC Berkeley Graduate School of Journalism, and her short film, A Confused War won several awards. Her work has appeared on Morning Edition, All Things Considered, and Marketplace, among other outlets. rwaldholz (at) alaskapublic (dot) org | 907.550.8432 | About Rachel