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House Bill 9 is a vital part of Alaska's energy future

Posted: April 23, 2012 - 2:03am

We’ve worked hard this year on legislation empowering the Alaska Gasline Development Corporation (AGDC) to pursue in-state pipeline projects delivering gas to Alaskans. While House Bill 9 passed the House, it did not progress through Senate committees, and Gov. Parnell has included that issue in the special session.

We commend our House colleagues for their vision and leadership in passing House Bill 9, and sincerely expect that, with additional time to consider the legislation and the need for in-state gasline development, the Senate will also demonstrate that foresight. We are eager to discuss this legislation, but the non-starter is doing nothing to get gas to Alaskans.

House Bill 9 is not merely about a one-time, in-state “bullet line” from the North Slope to Fairbanks and Southcentral. House Bill 9 creates a strong, able entity to serve as Alaska’s gas pipeline corporation, responsive to the needs of consumers, utilities, industries and gas producers, now and into the future.

The future is uncertain. Will the Alaska Gasline Inducement Act project by TransCanada and ExxonMobil continue focusing on a Lower 48 line? Will the producing companies and TransCanada align along a new Alaska export project? Would that happen under AGIA, or will a partnership require a new framework that AGDC can provide?

Some things are more certain.

Fairbanks residents continue grappling with heating bills as high as mortgages, and businesses struggle to find economic opportunity. Southcentral Alaskans enter each winter under warnings of imminent rolling brown-outs. Mines and other industrial opportunities struggle to pencil out projects employing Alaskans, and are thwarted by the lack of an affordable, secure power supply.

Enough is enough.

We structured House Bill 9 to support a state corporation prepared to act swiftly no matter what the future holds, with one key mission: pursue pipeline opportunities that get gas to Alaskans in Fairbanks and Southcentral at the lowest possible costs, and then to expand pipelines into other communities.

The Legislature this year approved tax credits for oil and gas exploration. With House Bill 9, AGDC would be able to connect successful developments with markets. If the Kotzebue Basin holds gas, AGDC could evaluate a pipeline to Kotzebue. If Donlin Creek mine builds a pipeline from Southcentral, AGDC could consider a pipeline from the mine to Bethel. With the strong industrial interests in Alaska and the entrepreneurial spirit of Alaskans, the possibilities are endless — if AGDC is standing ready to make it happen.

In 2010, the Legislature approved House Bill 369 almost unanimously, creating a team under the Alaska Housing Finance Corporation to consolidate the myriad of gasline concepts the state has supported through the years – not one of which delivered on an actual gasline. This team was to cull from those concepts the most promising aspects, and propose a new project delivering gas to Alaskans this decade.

House Bill 9 builds on that work. The core direction to AGDC is to advance a 500 million cubic foot bullet line through an open season. That line is as large as a state-supported effort can be without violating the AGIA contract between the state and TransCanada.

House Bill 9 also provides AGDC the authority to participate in a bigger project, should TransCanada and the three producers come together on an export line. Governor Parnell has called on them to conclude discussions with AGDC by fall 2012. If House Bill 9 passes, AGDC will be empowered to demand a seat at the table, not simply hand over assets like a state right-of-way lease or a federal environmental study. We see the potential for AGDC to assume a state equity position in a larger pipe, with a controlling interest.

Little of this is possible without a strong, independent Alaska gasline corporation ready to act, empowered to stand on the same playing field with some of the world’s most sophisticated corporations. House Bill 9 accomplishes this.

We pledge to continue working to bring Alaska gas to Alaskans, allowing communities to thrive; businesses to grow; and new industrial opportunities to develop. We ask Alaskans to stand with us and encourage their elected officials to open doors to a brighter future by supporting the Alaska Gasline Development Corporation and passing House Bill 9.

• Rep. Mike Chenault, the Speaker of the House, represents District 34 in the State House, which includes Nikiski and the rural portions of the Kenai Peninsula. Rep. Mike Hawker represents District 32, which includes parts of Eagle River, South Anchorage, Whittier, and communities along the Turnagain Arm.

The following legislators signed on to this opinion-editorial in support of House Bill 9: Reps. Mia Costello, Anna Fairclough, Bob Herron, Craig Johnson, Kyle Johansen, Wes Keller, Bob Lynn, Charisse Millett, Cathy Muñoz, Mark Neuman, Kurt Olson, Lance Pruitt, Dan Saddler, Steve Thompson, Peggy Wilson, and Tammie Wilson; and, Sens. Cathy Giessel, Linda Menard, and Lesil McGuire.

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