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Source of gas for Interior issue in bills Changes to AIDEA would revise bond/loan participation limits, eliminate old authorizations; also remove requirement of Slope gas Kristen Nelson Petroleum News
House Bill 105 and Senate Bill 50, companion administration bills, would provide changes to loan and bond participation limits for the Alaska Industrial Development and Export Authority, repeal outdated bond authorizations for the agency and drop the requirement that North Slope gas be used for an Interior liquefied natural gas project.
The North Slope requirement was part of Senate Bill 23, passed in 2013, authorizing AIDEA to provide financing up to $275 million “for the development, construction, and installation of, and the start-up costs of operation and maintenance for, a liquefied natural gas production plant and system and affiliated infrastructure on the North Slope and a natural gas distribution system and affiliated infrastructure in Interior Alaska.”
At the end of last year AIDEA determined that a North Slope LNG project for Fairbanks would not be economic, and has since been focusing on how to move Southcentral natural gas to the Fairbanks area.
A change in statute is needed.
HB 105 appears to be stalled in House Resources, with committee members in a March 13 hearing requesting more information on the AIDEA project and on the study AIDEA previously launched to get natural gas to Fairbanks.
The bill earlier cleared the House Special Committee on Energy; a referral to House Labor and Commerce was removed. Once it clears House Resources the bill moves onto House Finance.
SB 50 has cleared the Senate Special Committee on Energy, was introduced and held in Senate Resources March 27. Resources Chair Cathy Giessel said she expected the fill to come up again for discussion April 3.
Natural gas resources for Interior In introducing the bill in House Energy in February, Fred Parady, deputy commissioner of the Department of Commerce, Community and Economic Development, told members that following directions from Gov. Bill Walker the department is working on consumer energy in Alaska and Interior Energy and is working with AIDEA to assess natural gas resources for Interior Alaska, including Cook Inlet, North Slope and other locations.
He said the passage of HB 105 will provide flexibility to AIDEA to look at sources of natural gas other than the North Slope.
Gene Therriault, deputy director of the Alaska Energy Authority, said a couple of things have changed since SB 23 was passed in 2013. At that time gas supply out of Cook Inlet was very uncertain; that gas supply has since firmed up, he said.
An AIDEA-AEA team is working with the Department of Natural Resources to see if Cook Inlet natural gas would be available for long-term supply to Interior Alaska, Therriault said, and told the committee the request that the North Slope requirement be removed is so that other sources of gas could be considered.
Therriault said the Interior delegation has some concern that changes in the statute might remove the focus on Interior Alaska.
Interior comments In public testimony in House Energy Fairbanks North Star Borough Mayor Luke Hopkins echoed that sentiment, urging legislators to stay focused on getting lower-cost energy to Interior. He noted that this is a bridge project. He said AIDEA did due diligence and the North Slope LNG project just didn’t fit the model.
On the issue of natural gas from Cook Inlet, Hopkins said he’d had a number of private firms from Southcentral tell him that they think they’ll have available gas which can be trucked around the state.
Hopkins urged legislators to move the bill quickly, and to keep the initial focus on serving Interior Alaska.
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