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Special session hearings open on in-state natural gas pipeline

Posted: April 20, 2012 - 12:04am
Senate Community & Regional Affairs Committee members Sen. Albert Kookesh, D-Angoon, left, Sen. Donny Olson, D-Golovin, center, and Sen. Johnny Ellis, D-Anchorage, right, listen to Rep. Mike Hawker, R-Anchorage, make a pitch for HB 9 at the Capitol on Thursday which would promote an instate natural gas pipeline project.  Michael Penn/Juneau Empire
Michael Penn/Juneau Empire
Senate Community & Regional Affairs Committee members Sen. Albert Kookesh, D-Angoon, left, Sen. Donny Olson, D-Golovin, center, and Sen. Johnny Ellis, D-Anchorage, right, listen to Rep. Mike Hawker, R-Anchorage, make a pitch for HB 9 at the Capitol on Thursday which would promote an instate natural gas pipeline project.

As special session hearings aimed at passing a natural gas pipeline bill got underway Thursday, advocates of the small line found a skeptical reception in the Senate.

Pushing the line they’re calling Alaska Stand Alone Pipeline, or ASAP, are Reps. Mike Chenault, R-Nikiski, and Mike Hawker, R-Anchorage.

They were trying to resurrect House Bill 9, which Chenault said the committee “neutered” late in the recently concluded legislative session.

Chenault and Hawker warned that could threaten the chances that their pipeline could be successful.

They found a skeptical reception from the Community and Regional Affairs Committee, chaired by Sen. Donny Olson, R-Nome.

Olson said that as House Bill 9 arrived in his committee, it “looks like an open checkbook you could have out there,” and said he was reluctant to open the state to that risk.

Rena Delbridge, an aide to Hawker, said the original goal of the bill was to remove politics from the process and turn over ability to manage the project to the Alaska Gasline Development Corp., a subsidiary of the state-owned, independently operating Alaska Housing Finance Corp.

What’s caused other projects to fail in the past was political leaders wanting to make changes to the projects.

“Politics has interfered, in the sense of different people wanting to pick routes, different people wanting to pick size,” she said.

Instead, the state should stick with the route and size that’s already been selected and move forward, she said.

If the new AGDC project can’t make agreements without legislative approval, the delays inherent in the political process will make it more difficult to do a deal, Delbridge said.

“They may have to move quickly,” she said, for example, to lock in low bond rates.

Olson didn’t like giving an independent entity unlimited bonding capacity. The state would be on the hook, taking the risk, but if there’s a profit to be made it would go elsewhere, he said.

Delbridge disputed that, saying the state would not back the bonds at all.

“It would be those people purchasing the bonds that would carry the risk,” she said.

Other points of contention include whether the pipeline should be a common carrier, as the Senate wants, or a contract carrier as the sponsors want. That’s a technical change, but highly important to the project, she said.

Other concerns expressed by Olson included public records exemptions that the sponsors say are needed to obtain confidential business information from potential partners.

“They will necessarily need a level of confidentiality to go forward, but we’re being as open and trusting as we possibly we can,” Hawker said. AGDC will be a public corporation managed by a board made up of commissioners in the governor’s cabinet.

In addition, Olson said he’d heard concern from municipalities about a requirement that they provide rock and gravel for the project.

Hawker said he had not heard those concerns from cities, but that usual and customary market prices would be paid for any resources used.

“It is not our intent to trump or damage communities,” he said.

The sponsors concern was making sure the project wasn’t blocked, Hawker said.

“The concept behind this provision was to not allow, for whatever reason, for some small entity in the state of Alaska to essentially hold the whole state hostage in stopping a project,” he said.

Hawker promised to work with Olson and community representatives on that provision and possibly make changes.

The committee Thursday held the bill for further hearings. No hearing is scheduled today.

• Contact reporter Pat Forgey at 523-2250 or patrick.forgey@juneauempire.com

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