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Resolution urging national support of gas pipeline moves in House House Joint Resolution 44 amended at request of Yukon Pacific to ask support for moving Alaska North Slope natural gas to Lower 48 as gas or as LNG Kristen Nelson PNA Editor-in-Chief
The House Special Committee on Oil and Gas moved an amended version of a committee substitute for House Joint Resolution 44 after discussion March 5. The resolution, introduced at the request of the Legislature’s Joint Committee on Natural Gas Pipelines, urges the president, Congress and federal agencies to support the construction and operation of the Alaska Highway natural gas pipeline route.
Committee Chairman Scott Ogan said the committee substitute provided that if there is tax relief to natural gas shippers when the price of natural gas is low, then that tax relief would be reimbursed at high gas prices.
“I feel that if we’re asking the taxpayers to share in the risk then if there’s an upside the taxpayers should get a rebate,” Ogan said, “… and I think frankly that makes it a little bit more saleable for the help that we’re asking for.” Fuhs requests LNG amendment There were amendments to the resolution at the request of committee members, and one amendment at the request of Paul Fuhs, who testified on the resolution on behalf of Yukon Pacific Corp., which is proposing a gas pipeline to Valdez and shipment of liquefied natural gas from Valdez.
Yukon Pacific favors the resolution, he said, even though the company supports a project that goes through Alaska to tidewater.
Alaska gas could get to U.S. markets in two ways, Fuhs said: “And one of them could be overland, by the highway route; or the other could be as LNG.”
The LNG project has been called uneconomic, “but none of the economic analyses that have been done included shipments of Alaskan gas to the U.S. as LNG,” Fuhs said.
He said Yukon Pacific has done such an analysis and will present it to the committee March 14. ANGTA framework Fuhs said Yukon Pacific supports HJR 44 because the resolution recognizes the Alaska Natural Gas Transportation Act. Yukon Pacific’s “presidential authorizations to export gas from Alaska are included under the ANGTA framework,” he said.
He questioned how acceptable tax credits would be in the Lower 48. Will the Rocky Mountain states and the Gulf of Mexico states “agree to a subsidy that would essentially displace their gas anytime that it’s below $2.50 (a thousand cubic feet)? But if you can pull it off, that would be great, because that’s probably what’s necessary to make the highway project economic according to what the producers have been saying about the economics.” Southern route a plus Fuhs said Yukon Pacific’s fear is not that the Alaska Highway route will be built: “If it was, then a Y-line concept is the most economic configuration for both projects: you go to Canada — you take a spur line to Valdez — that’s the most economic.”
He also said that Yukon Pacific does not believe an Alaska Highway gas pipeline is required to make its line to Valdez economic.
What does concern the company, Fuhs said, is that the Alaska Highway route will be mandated: “What you could end up with… is that Canadian line never gets built and then, because of this mandate, we could not even sell Alaskan gas to our own country.
“Now that would be a perverse outcome. But that’s how it’s stated, that we are mandating the highway route,” he said.
Fuhs said Yukon Pacific has “been very pleased” with how the Legislature’s joint pipeline committee “treated both projects equally” and asked the committee to consider an amendment saying that provisions in the resolution “are not intended to exclude the supply of Alaska North Slope gas to U.S. markets as LNG.”
Rep. Hugh Fate, R-Fairbanks, moved that the committee amend the resolution to include the phrase: “these provisions are not intended to exclude the supply of Alaska North Slope gas to the U.S. markets as LNG” and the resolution, so amended, was moved out of the committee.
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