House committee moves LNG trucking bill

A bill to provide financing tools for a liquefied natural gas trucking operation recently made it through two state House committees and could soon get a vote on the floor.

Senate Bill 23, which the state Senate approved on March 13, would give the Alaska Industrial Development and Export Authority the ability to issue up to $275 million in financing to truck LNG from a new North Slope plant to markets in the Interior.

As written, the bill would only give AIDEA the authority to finance the project. AIDEA Executive Director Ted Leonard said the agency must still complete a feasibility study before it can decide whether or not to move forward. The study should be done in June.

While in committee, representatives raised many of the same hopes and concerns about the project that senators had previously raised. Among the hopes are lowering fuel costs in the Interior, building a local distribution grid in advance of a large natural gas pipeline coming through the area, and improving air quality in the region. Among the concerns are finding an economic use for the plant should a pipeline come into operation, financing a project largely geared toward a specific region of the state and aligning the trucking operation with other concurrent efforts to expand natural gas use throughout Alaska.

The bill would also give AIDEA the ability to directly finance large projects, which the public corporation believes would improve its investment strategies. While the mechanism could be used for any number of projects, AIDEA has specific mentioned the ability to invest in production facilities for small independent oil and gas producers.

The House Labor and Commerce Committee originally split the two components into separate bills, but the House Finance Committee ultimately reunited the two bills.

The original financing package also included a $50 million general fund appropriation to help lower the cost of the project for consumers, but that measure was removed and is currently being considered as part of the larger capital budget deliberations for the year.

—Eric Lidji