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Politics snag natural gas line funding Alaska Legislature debates more money for state gas authority, negotiations Larry Persily Petroleum News Government Affairs Editor
Funding for the Alaska Natural Gas Development Authority is caught up in legislative politics.
Supporters want lawmakers to appropriate the full $2.15 million the authority says it needs for economic, legal, tax and financing studies of a state-owned project to bring North Slope gas to overseas and domestic markets by liquefied natural gas tankers, and for making gas available in state.
But others want the authority to share in a single appropriation with the state’s overall effort to promote any project that could move natural gas to market, including assisting the administration in its review of private-company pipeline project applications under Alaska’s Stranded Gas Development Act.
And several House Republicans say the best they can do at this time of tight finances is $1.65 million, to be shared by the gas authority and three state departments — perhaps with more money later in the session if needed.
Meanwhile, the voter-created authority is out of money and contracts are on hold pending additional funding, Deputy Revenue Commissioner Steve Porter told the House Finance Committee on March 2. The Department of Revenue also could use more money for its work on Stranded Gas Act project applications, he said. Administration favors ‘team’ funding The administration’s answer is to get a single appropriation for Revenue, which would be shared with the gas authority. “We see the authority as part of a team,” Porter told the authority’s board of directors at its Feb. 9 meeting.
An amendment to get more money but only for the authority failed on the House floor Feb. 26, while an effort to direct the funding to Revenue failed to move in House Finance on March 2. Supporters of the state gas authority said they don’t trust the administration to share enough of the cash if the appropriation is funneled through the Department of Revenue.
“I don’t want ANGDA (the gas authority) dependent on the administration. Then they’re not independent anymore,” said Rep. Eric Croft, D-Anchorage, in an interview between the House vote and the committee debate.
Croft, speaking on behalf of the 12 members of the Democratic minority in the House, said his colleagues want to give additional funding directly to the gas authority.
The administration has said it would manage a single appropriation as a “team effort” with the gas authority and the departments of Revenue, Law and Natural Resources to review in-state benefits of a gas project, legal and tax issues, financing, effects on communities along any pipeline route and the feasibility of a petrochemical industry in the state. Lawmaker questions how money to be shared House Finance Co-Chair John Harris, R-Valdez, asked Porter how much of the shared appropriation would be given to the gas authority, to which Porter replied: “There isn’t an exact split.”
The administration has been seeking a $3 million total appropriation for the authority, Revenue and the other departments.
Although the authority wants its own $2.15 million, the failed attempt in the House was for just $1.65 million for the authority. The House Finance effort was for everyone to share in the $1.65 million. That’s as much as the Senate is willing to accept at this time, said House Finance Committee member Mike Hawker, R-Anchorage.
“I was trying to broker the peace” between the House and Senate, Hawker said.
“I have some concerns about the willingness of the administration to provide adequate resources” for the authority, he said, adding, “I also have some concerns with the request that ANGDA put to us.”
The authority has spent all of the $350,000 it received for this year, its first year of operations after the governor appointed the seven-member board last summer. Voters in November 2002 approved creation of the authority to pursue a state-owned pipeline and LNG shipping terminal at Valdez.
Authority out of money The authority faces a June 14 deadline to present its project plan to the Legislature, though several lawmakers have talked of extending the deadline.
“If we’re to move the project forward … we need money to do that,” said Andy Warwick, chairman of the authority’s board of directors. Warwick, who served in the House form 1971 to 1974, said he understands the problems of reaching a consensus. “They just have to decide if they want to move forward.”
Porter told House members the lack of money is a problem. “Right now, we’re not moving.”
Among the work on hold are contracts to review the authority’s financing options for a state-owned project, and a study of the social and economic effects on communities along the proposed pipeline route for use by both the authority and the departments involved in the Stranded Gas Act negotiations. Budget vote needed three-quarters majority The failed funding effort in the full House would have taken the money for the authority out of the state’s budget reserve fund, which requires a three-quarters majority vote instead of a simple majority for a general fund appropriation.
The vote for $1.65 million directly to the gas authority failed 17-20, far short of the needed three-quarters. Most of the votes in favor came from Democrats, with just half a dozen Republicans joining in. All 20 votes against the funding came from Republicans.
House Speaker Pete Kott, R-Eagle River, then sent the measure back to the Finance Committee for more work, which also failed to find a solution March 2.
Rather than continue to fight with Democrats for a three-quarters majority to take the money from the budget reserve, it’s likely the Republican leadership will instead push to appropriate the money from the general fund. That would make it easier for Republicans to funnel the money to the Department of Revenue, avoiding the Democrats’ insistence on giving the cash directly to the gas authority.
The funding issue before the House was part of a bill to fix a budget problem unrelated to the state’s gas line efforts, and lawmakers are likely to handle the two issues separately to avoid any further delay in the budget problem affecting other departments.
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