Lawmakers concerned about authority for Alaska gas pipeline

Gov. Bill Walker answers a range of questions during an interview with the Empire in his Capitol office on Friday, Jan. 5, 2018. (Michael Penn | Juneau Empire File)

ANCHORAGE — Gov. Bill Walker’s administration is not asking for more state funding to advance a $43 billion Alaska gas pipeline, but some legislators are concerned allowing the developers to accept outside money could sign away much of their remaining control over the project.

 

The governor’s 2019 fiscal year budget proposal includes language giving the Alaska Gasline Development Corp. the authority to accept third-party funds from potential Alaska liquefied natural gas investors.

Republican Sen. Cathy Giessel of Anchorage said legislators generally like to guard their appropriation authority, which is one of the most fundamental powers they are granted by the state constitution, the Alaska Journal of Commerce reported Wednesday.

“Receipt authority is a lot like giving a blank check,” Giessel said.

She said the Senate Majority still has a lot of questions about what the state-owned corporation would do with the third-party funds — or what it would have to offer to receive them.

The House Finance version of the 2019 operating budget released March 19 capped the receipt authority at $1 billion per year to give the corporation financial headroom to keep working without the freedom to commit to building the whole project without further review by the Legislature.

Giessel said the House concept might not be a bad idea.

She also said the Federal Energy Regulatory Commission (FERC) published a schedule for the project’s environmental impact statement March 12 that likely would not have the project receive regulatory approval until early 2020 or possibly later.

“We wonder if perhaps, based on the new FERC timeline, if (the corporation) wouldn’t have enough money through next year anyway,” Giessel said.

The administration had been pushing the regulatory commission to have the environmental study done by early 2019, but the extra year could slow the need for money to advance the project quickly. Corporation President Keith Meyer has said ideally he would like to start construction in late 2019 or at least be contracting for long-lead time items in preparation for construction by then.

Meyer and Walker said when the state took control of the project from the producers in early 2017 that the corporation would rely for the foreseeable future on the roughly $100 million it had left from prior gas-line appropriations.

Corporation leaders expect to have about $43 million left when the 2019 fiscal year starts in July, according to a financial summary from the March 8 corporation board of directors meeting.

As the proponent of the project, the corporation is responsible for funding work on the environmental study and officials said it’s unclear if the corporation has enough cash available to finish the environmental review because the extent of additional work the regulatory commission will require isn’t yet known.

Spokesman Jesse Carlstrom said via email that the corporation can continue advancing the project on its current pace with no new funds through 2019.

“AGDC is preparing to engage investors. Authority to accept funds from third-party investors will enable AGDC to build Alaska LNG without the necessity of additional state funding,” Carlstrom said.

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