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Alaska gas authority delays funding request LNG project office will have to wait for legislative session Larry Persily Petroleum News Juneau Correspondent
The Alaska Natural Gas Development Authority has abandoned its plan to ask for an additional $200,000 in state funding this month, and its chief executive says it will instead add it to its budget request for when the Legislature comes back to work in January.
“I gave it a go,” said Harold Heinze, chief executive officer for the gas authority. “At the end of the day it came down to the fact … there are no funding sources available.”
Heinze said he learned from the Department of Revenue and the governor’s budget office that in order for a state agency to request additional funding when lawmakers are not in session, the agency must also identify a source for the extra money. Any such funding source is limited to “new” money that was not available to legislators during the past session.
The Legislative Budget and Audit Committee — in charge of such requests when the full Legislature is not in session — approved an additional $200,000 for the gas authority in October, taking the money from a one-time pot of federal aid given to the state after lawmakers adjourned this past May. No reason to even submit request Heinze said he could not find another such pot of immediately available funds to tap for the gas authority’s latest request to add to its budget, so there was no point in turning in a formal request for the funds.
The authority’s budget this fiscal year is $350,000 — an original $150,000 appropriated by the Legislature in May plus the $200,000 additional in October. The money is to determine the economics of a proposed state-built, owned and operated $12 billion project to pipe natural gas from the North Slope to Valdez, where it would be liquefied and shipped aboard tankers to any willing customers around the Pacific Rim.
The gas authority board of directors voted at its Nov. 17 meeting for Heinze to request $200,000 more in funding from the Legislative Budget and Audit Committee at its Dec. 12 meeting in Anchorage. The additional money was to have paid for more work by consultants, including studies of a proposed spur gas line to Cook Inlet from the main line, the possibility of using barges to bring LNG to coastal Alaska communities, and the prospect for separating propane from the gas stream and distributing it statewide.
The additional money also was to have paid for review of the legal problems in using non-U.S. tankers to carry Alaska LNG to West Coast terminals vs. the financial hurdles in paying for U.S. tankers to do the job.
The administration supported the authority in its request for the first $200,000 in October but turned away from supporting the second $200,000 request this month, saying the money wasn’t needed so soon and the request could be dealt with when lawmakers return to session. Authority will try again in January Heinze said he expects the authority will add the $200,000 request to the $1.95 million it already was planning to seek from the Legislature when it starts its 121-day session Jan. 12. All state general fund money is available for appropriation when the Legislature is in session.
If approved at the full amount, the appropriations would bring the authority’s budget to $2.5 million for the fiscal year that ends June 30, 2004. The authority faces a June 2004 deadline to present the Legislature with a development plan for a state-owned project.
Funding issues and work plans likely will be discussed when the gas authority meets Monday, Dec. 15, in Anchorage.
The authority, which was created by a voter initiative last year, believes an LNG project to serve U.S. West Coast or Far East markets is a better project for Alaska than waiting for the major North Slope producers to build a larger pipeline to serve mid-America. The authority, however, owns no gas, and will need to cut a deal with the producers to buy or contract for enough gas to fill an LNG project, in addition to finding financing for the project.
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