Alaska House debates funding for state-owned natural gas pipeline

Larry Persily

Petroleum News government affairs editor

The Alaska House continues to debate how much money to appropriate for review of a possible state-owned natural gas pipeline from the North Slope, with members March 31 deadlocked 20-20 on a proposal to spend an additional $1 million.

Supporters of additional funding for the Alaska Natural Gas Development Authority said they may try again April 1 to change a vote or two in their favor.

The legislation, Senate Bill 241, would appropriate $1 million to the Department of Revenue to share between the state gas authority and the administration’s efforts to negotiate a long-term fiscal contract for a privately owned gas line. But the bill does not specify how the $1 million would be shared, and that worries backers of a state-owned line.

Voters in November 2002 approved a ballot initiative to create the gas authority under the premise that the state would build and own a gas line to Valdez, where the gas would be liquefied and shipped to willing buyers in the Far East and California. But the initiative did not include any funding.

The seven-member authority board is due to submit a project development plan to the Legislature early this summer. The board has spent most of the $350,000 it was given last year by lawmakers and says it needs more money to hire consultants for financing and tax issues.

The Department of Revenue has said it would share enough of the $1 million appropriation with the gas authority to undertake essential work this spring, with the authority to request additional funding as part of the regular fiscal year budget to start July 1. The gas authority board has endorsed that plan.

Rep. Eric Croft, D-Anchorage, however, said he wants the authority to have its own $1 million to spend as it sees fit. Croft sponsored the amendment to add a second $1 million to the appropriation, with the money specifically earmarked for the state gas authority.

The bill passed the Senate unanimously March 17, and the money could be available immediately unless the House amends the bill and has to send the measure back to the Senate for concurrence. Senate Republican leaders, however, have said they believe a single $1 million in shared money is enough for this spring.