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Will gas line team be ready May 19? Alaska senators question readiness of Palin team for May decision date; governor says some lawmakers worried about re-election Kristen Nelson Petroleum News
As the Alaska legislative session ended April 13, senators questioned whether a decision on the TransCanada AGIA application should be released May 19 — and whether the administration would in fact be ready to do so.
Gov. Sarah Palin has said a decision by the commissioners of Natural Resources and Revenue on TransCanada’s application under the Alaska Gasline Inducement Act will be available May 19, and has called a special session for June 3. If the commissioners recommend awarding an AGIA license to TransCanada, the legislature has 60 days to approve that license. Without legislative approval the license is rejected. The license provides state matching funds of up to $500 million to help kick start a project taking North Slope natural gas to market, as well as non-monetary incentives, in exchange for meeting the 20 must-haves specified in AGIA.
Changes since AGIA passed The Legislature approved AGIA last year; a request for applications was issued; five applications were received.
Only TransCanada’s application was deemed complete and the departments of Revenue and Natural Resources have been evaluating the application since January.
Because of intense in-state interest in a liquefied natural gas project the governor expanded the evaluation of the TransCanada application to include comparing it to LNG alternatives.
Energy prices have risen dramatically since the AGIA process began, driving a demand for reasonably priced natural gas for in-state use. Earlier in April the House and Senate passed a resolution asking the governor to expand her special session call to include a discussion of a smaller, or bullet line, to carry North Slope gas south for in-state use.
The governor declined, noting that a bullet line is one of the energy alternatives being considered by the Alaska Energy Authority.
On April 8, BP and ConocoPhillips — two of the major North Slope natural gas leaseholders — announced a joint venture to build a natural gas pipeline outside of the AGIA process to take North Slope gas to market.
In short, a lot has changed since the passage of AGIA last year.
Is June appropriate? Senate Resources Chair Charlie Huggins, R-Mat-Su/Chugiak, questioned whether June is an appropriate time to hold a special session on AGIA’s TransCanada application.
In a Senate Bipartisan Working Group press availability held April 13 after the Senate gaveled out, Huggins said he thinks that with LNG and in-state gas delivery through a bullet line in the spotlight, and especially with the announcement by BP and ConocoPhillips of their joint venture to build a gas pipeline to market (Denali — The Alaska Gas Pipeline), that a special session on TransCanada’s AGIA application “might best be deferred.”
He called the BP-ConocoPhillips announcement an earthquake and said expressions of interest in the project by Shell and Enbridge — which has long said it was talking to the producers about a gas line —are aftershocks.
Huggins said TransCanada is probably “assessing their position and the merits and demerits of where they are in relationship” to the recent news.
Because of interest in LNG and a bullet line — and particularly because of the BP-ConocoPhillips announcement, Huggins said it may not be possible to answer some questions. He said he thinks it would be to the state’s benefit to let things play out a little bit before the Legislature considers awarding an AGIA license.
Huggins said an appropriate date for a special session would be after the November election when the state has more information, “the dynamics will have matured” and TransCanada will have had a chance to assess what’s best for them. Such a timeframe, he said, would also give the consultants an opportunity to evaluate all of the new information.
Will administration be ready? Senate President Lyda Green, R-Mat-Su, said the Legislature was previously committed to calling itself into special session in mid-May to get work started because of the 60-day limit it has to approve an AGIA license and because of upcoming primary elections (scheduled for Aug. 26). She said she is not convinced that all the needed information will be available, and thinks the administration has set a “very ambitious date” for its mid-May completion.
Green said the question now is “when that information’s going to be forthcoming.”
Palin says elections the issue Palin, in a press conference later April 13, said, “I believe that some lawmakers will want it (the special session on an AGIA license) put off because there are so many up for re-election and this will be a dynamic in campaigns.”
The governor said she didn’t see a need “to put off action on a decision that our commissioners will be asking of lawmakers on May 19 and then when the special session does kick off.”
Palin said commissioners, staff and consultants have spent so many months reviewing and evaluating the TransCanada application “that it would be really unfair to the process, unfair to Alaskans, unfair to those who realize we’ve got to get this gas line going, to not take action on it sooner rather than later.”
As to whether information will be ready by the May 19 date, Palin said she speaks to the gas line team regularly and is confident that it will be ready.
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