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AGIA funding, reports an issue in Juneau Administration agrees to provide reports to legislators at end of April, October; unspent FY 09 AGIA funding goes to in-state line Kristen Nelson Petroleum News
AGIA, the Alaska Gasline Inducement Act, was not formally on the agenda in the Alaska Legislature this year, but Gov. Sarah Palin’s plan to jumpstart a natural gas pipeline from the North Slope to markets was not forgotten.
Reps. Jay Ramras, R-Fairbanks, and Craig Johnson, R-Anchorage, sponsored House Concurrent Resolution 12 and House Resolution 11, asking for updates on the TransCanada Alaska project which received the AGIA license.
And the Legislature failed to allow the administration to carry over monies voted for AGIA last year, but not spent in this fiscal year because legislators delayed issuance of the AGIA license to TransCanada.
HCR 12 actually asked for a good deal more than just updates: It called on the governor and the attorney general to review and re-evaluate the license issued to TransCanada in light of the global economic recession’s potential risks for project financing.
Administration — just ask The administration defended the AGIA license at a press conference in mid-March.
Gov. Sarah Palin said “AGIA is a contract,” and that just as the state expects the oil and gas industry to abide by its agreements with Alaska, the state also needs to abide by its agreements.
Palin said her interpretation of HCR 12 was that it was a call for double checking and triple checking. The administration is happy to do that she said, but doesn’t believe the resolution is necessary.
Commissioner of Revenue Pat Galvin told the House Special Committee on Energy in mid-March at a hearing on HCR 12 that he believed the TransCanada AGIA project remained economic and he said the administration was evaluating information as TransCanada proceeds.
“You don’t need to present a resolution,” Galvin said: “Just ask us to present information.”
Ramras asked for resolution changes from the administration that would produce quarterly reports on progress; Galvin said he would work with the sponsors on changes. The Energy Committee held HCR 12; the resolution was withdrawn by the sponsors April 18.
House Resolution 11 In mid-April Ramras and Johnson introduced House Resolution 11, which requested biannual reports on the TransCanada project licensed under AGIA, but not a re-evaluation of the project.
The resolution referenced an April 10 letter from the governor to the sponsors, and to the House Special Committee on Energy, agreeing that biannual reports on the AGIA-licensed project would “serve the public interest in monitoring the progress of the licensed project.”
While HR 11 said the administration had agreed to submit biannual reports, Ramras and Johnson still introduced the resolution, asking for biannual reports covering project reimbursement status; project progress and major achievements; project assessments by third-party consultants; and Alaska workforce assessment.
Ramras said on the House floor April 19 that he had received “satisfactory correspondence” on that day from the administration and was withdrawing the resolution.
He said reports would be prepared by the administration on April 30 and Oct. 31, with a statutorily required report due Jan. 1.
The appropriation issue At an end-of-session press conference April 19 the governor said both AGIA and an in-state gas line “are very important for the future of Alaska and they’re not mutually exclusive and that’s why energy overall is our priority and we become energy secure with the AGIA line and with an in-state line.”
Asked about the failure of legislators to allow re-appropriation of AGIA implementation money for fiscal year 2009, the governor said it “was disappointing that Revenue will not receive this go-around some of the requests that we had there.”
“You know AGIA had a fiscal note attached to it and we have an obligation to fulfill all aspects of that law including the fiscal note,” Palin said.
Joe Balash, the governor’s special assistant for oil and gas, noted the administration requested $15 million in last year’s appropriation bill which would have covered five years of AGIA. Legislators wanted to allocate money year-by-year, Balash said, so $5.5 million was appropriated for FY 09, but for one year only.
This year the administration asked for FY 10 money, which was appropriated, Balash said.
But an extended lapse date for the FY 09 money, which would have allowed it to be used in FY 10, did not materialize in any of the appropriations bills, although, Balash said, the administration had been led to believe the date would be extended.
The monies were not expended as expected because the Legislature delayed issuance of the AGIA license until the end of 2008.
Sen. Gene Therriault, R-North Pole, raised the issue on the Senate floor April 19. He said the $2.7 million was needed for AGIA work, including audits of TransCanada reimbursement requests and reports requested by legislators and argued that if the administration did not have access to those funds the AGIA effort would suffer.
Sen. Bert Stedman, R-Sitka, co-chair of Senate Finance, responded by saying those funds had been allocated to the governor’s in-state gas priority due to pressures on the state budget.
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