Tarr enjoying House Resources assignment

Anchorage Democrat says she expects committee will be busy with gas line issues such as payment in lieu of taxes during interim

Steve Quinn

For Petroleum News

Rep. Geran Tarr spent five years working for Sen. Johnny Ellis as a legislative aide, then decided it was time to hold office. Upon arriving to the 28th Legislature as a freshman, Tarr received an appointment to the House Resources Committee, getting one of the few slots afforded the Democratic minority.

She brought a background of environmental studies and work as adjunct to the University of Alaska-Anchorage campus to the committee. Now in her second term with the House and the committee, Tarr spoke to Petroleum News the recent session and what lies ahead for lawmakers.

Petroleum News: This being your third year, what interested you in getting on Resources? That’s a lot of heavy lifting for a freshman, though not unprecedented certainly as you’ve got a freshman co-chair.

Tarr: I have science background and about 20 years of experience in resource background so it was a good fit for me.

Petroleum News: What have you learned these three years? You’ve had your share of significant legislation to review.

Tarr: I had not focused closely on oil and gas issues when I was a staffer so we certainly spent a lot of time on oil and gas with SB 21 and the gas line bill. I was pretty proud that several of the amendments I offered on the gas line bill were incorporated into that legislation. I think they were key components related to in-state use and good pricing whether we work with one of the major producers to sell our gas or not.

So I feel more knowledgeable in what’s going on in the dynamics with worldwide markets with these commodities. I think we spent quite a bit of our time on that, more so than any of the other resources issues.

We haven’t really touched on mining issues in a significant way. We haven’t really touched on agriculture. This year we touched on timber a little bit, but it’s been dominated by oil and gas. It’s been nice to work on in the moment rather than just have a more historical perspective.

It’s such a dynamic situation. You’ve got to really be up to speed on what’s going on. What I try to do as a complement to my work on the Resources Committee is I’m involved with PNWR - the Pacific Northwest Economic Region - and I attended their last two summits and participated in some of their working groups.

I felt pretty well prepared for this job. Some of these issues are perennial issues. I was thinking back at first when we had HB 77, we kind of rang alarm bells on that because I was familiar with the water rights issues.

When we had the cruise ship waste situation that was something I felt I could add to. That’s an issue I’ve worked on before. A lot of my work involved environmental engineering work and doing water quality sampling and helping people with the very permits we talk about in the committee. So it’s good to have that practical hands-on work to understand the implications of that policy.

Petroleum News: On SB 138, you were among the yes votes. It wasn’t a party line finish. So what prompted you to vote yes?

Tarr: I felt good about some of the amendments we were able to offer and given the restrictions of the AGIA license at the time, that was clearly the only path forward and involved the partners and to get everybody sort of an equal, if you will, playing field in terms of the type of commitment they are making and then having some opportunity to influence decision making going forward on the project. This is our economic future. Certainly with the economic crisis we are in now with the significant drop in oil, we are reminded even more how we need something that is part of our revenue for the future and the gas line project is going to be it.

Petroleum News: People sort of came here thinking they would be getting occasional updates on the gas line. What you ended up having was a dispute between the House leaders and the governor, and what the governor’s plans really are. This led to HB 132. So first what were your impressions of HB 132?

Tarr: I was a no vote. I looked at this pretty critically and understand why we would need to pass this legislation at this time and what was the governor doing and how timing was related to that.

As I said on the floor and in committee, as it’s been described, the governor wanting to have additional information so there truly was a backup plan had a lot to do with the timing and resource was available - that technical committee was on retainer by AGDC doing some of that work and they were about to wrap up.

If you were about to have the same people do additional work, HB 132 could produce a time delay and maybe that same group of people wasn’t available. So I really thought at this time that it’s worth taking advantage of this technical expertise and having them answer some additional questions. It was a unanimous (AGDC) vote and that gave me a lot of confidence.

We spent a lot of time on that in committee. If there were something problematic, the board members could have stepped up and said this isn’t what we want to do. I think timing is an issue for sure. I don’t think there is much time for delay in getting our project to the top of the list.

But because this was going to be a short-term information gathering and presentation, I felt like that was a good move on the part of the governor to show that we are serious. They (the producers) have other projects around the world. They don’t have all their eggs in one basket. If there is some other opportunity, there are a lot of dynamics where we don’t have any influence at all and so they could choose to put resources elsewhere. We don’t have all of those same opportunities.

Petroleum News: They might have opportunities around the world, but they are not stacking up their opportunities in the same pipeline path, so do you see the governor’s aspirations to expand the scope of the smaller line as competition?

Tarr: I don’t. I have listened to what he said. I heard him say we can’t afford to wait a few years until we get to the FEED decision, and if for any reason one of the partners wanted to walk away at that point, it would be difficult for us to be in a place where we were starting from scratch.

I think it is good for us to take advantage of the technical expertise and get a little more information on the table. Now as time evolves we will have to see where things go. Nothing in the timeline has slipped.

We got the right-of-way legislation passed and that is good for both projects but ASAP as it was envisioned originally is uneconomic. There is just really no reason to say that’s a backup plan. You know that’s not going to happen. This governor, people compare him to Wally Hickel, the owner state governor. That he wants to have Alaska a little more in charge of our destiny.

I’m trying to give him the chance to articulate that more. But if there comes a time when we part ways and his vision is different from mine, I’m not afraid to stand up and say what I think.

Petroleum News: Do you think you’ve got enough information from the governor on what his plans are?

Tarr: I think we need more information. And I think we are going to get that in coming weeks. They have been under the gun the last four months on a lot of issues. So many resources have gone into this unexpected budget crisis, and I know we are working on them internally because we keep in touch through staff. I think we’ll see some of that during the summer.

Petroleum News: Let’s talk about some of that. You’re not the co-chair, but what would you like to see happen during the interim?

Tarr: I think some of the work we didn’t get to this time, like the PILT (payment in lieu of taxes) bill is really important. I want to know better what’s happening. The municipal advisory board had a report due at the beginning of session, but because there was change in membership with a new administration some of that work got delayed. I think we can make the interim very productive if we address that issue. That’s a major, major piece of a project going forward, the local community buy-in and how they will be affected.

And to the extent that the governor’s office can develop more of what they envision, or where they are going, I think we should put some time into that. The summer is a difficult time to engage the public so I would like us to use the summer to do our work internally so that by the fall, if we are going to have a special session, everything is very organized and we can be affective in our outreach to the public and make sure the communities understand what we are doing.

We spent a lot of time on SB 138 with Commissioner (Angie) Rodell looking at our overall financial situation. With everything so uncertain right now, we haven’t lost our AAA bond rating, the agencies haven’t downgraded us yet but they put us on warning. As things evolve, we may see some things change. There are a lot of pieces we need to keep careful watch of.

I don’t think we can afford to take too much time off. The last two years, the Resources Committee was very active. We did have a series of meetings each interim. We got reports and a lot of analytical work from Black & Veatch as well as other consultants. We should take full advantage of those resources.

And Larry Persily, now as an employee of the Kenai Peninsula Borough, is keeping us updated with reports from around the world. It’s a fascinating thing to try and understand with natural gas projects around the world.

We need to be in the know about that. We are competing with numerous other projects for the same couple of year window when those Asian markets open up. We need to have an understanding of the big picture.

Petroleum News: Speaking of Larry Persily, even though he was in Washington, in a lot of ways, he never really left Alaska, having been back here so much working with various groups including the Legislature. What do you think of him still being in the mix as he is now?

Tarr: I think he is going to be a great resource. He certainly brings many years of closely watching everything to the table. I’ve gone to him as a resource many times. It’s important to go to many people and places to ask another person and get their feedback, so I think he’s got a lot to offer. I appreciate that he has continued that daily news briefing. I have loads of them that are summer reading. I’m able to go back to them.

When things come up in committee, I go back to them. Time will tell whether we should go back to funding a position in D.C. The federal government has been receptive to other things like an export permit; the EIS work is going forward. So hopefully we don’t miss out by not having somebody in D.C.

Petroleum News: Given what you’ve heard from the producers, the administration and AGDC on the AKLNG project, what are your thoughts on their message, especially as they all seem to be on the same page?

Tarr: Everybody has been very positive. The report that I liked came from (Exxon’s) Steve Butt. I have a high level of confidence in him. He is experienced. When he lets you know what’s going on, he gives you the impression that things are moving forward in a positive way.

Of course, separate from us, the producers have different interests in this project. He has more insight into what those conversations are like. I didn’t sign a confidentiality agreement. How we are still going to receive that information has not been completely worked out.

This governor still wants it to be a bit more public. I’d like to be getting briefs from them. They have been frankly pretty quiet in reaching out to legislators and with the exception of having the update hearings in Resources where everybody said they’ve got strong teams in place.

Petroleum News: Getting back to Exxon, Point Thomson is up and running and building toward production, did you ever make it up there to look at the operations?

Tarr: It’s great to see a project happening. It’s unfortunate that it took litigation. The outcome is something everybody hopes will be a winner and a big part of the AKLNG project. It’s not that it’s changing dramatically, but one thing is clear, the footprint is getting smaller in comparison to the older developments. From Prudhoe to Kuparuk, you can see a difference; from Kuparuk to Point Thomson, you can see a big difference.

It’s important for us to see what’s happening. Whether we are responsible for it or not, climate change is happening. We are dealing a lot with Arctic development, and what that’s going to mean. We used to have 200 days of ice roads. Now we have 100.

I think it’s good to get on the ground and see what that means for those kinds of development. They have an impressive operation there. I especially like seeing spill response capabilities and what they are doing for Arctic waters. I think we are at the cutting edge of developing that technology in the Arctic for sure.

Petroleum News: Speaking of the Arctic, in January, the Legislature and the governor were taken aback by news of the Obama administration’s announcements of his intentions for ANWR (wilderness designation) and outer continental shelf exploration. What are your thoughts on those developments?

Tarr: On the OCS, there are a lot of leases that haven’t been developed yet and the new lease sales will contain two years. If I were the president and you look at their role as the manager for the entire United States, instead of concentrating on OCS just up here, they added the East Coast. If you want to have a balanced approach, that’s probably what you do.

Now what I don’t like about the OCS situation is the revenue side of it. I know that our delegation is working on that and I hope that they are successful. We are in the infancy of this Arctic development and I’d like to see it happen successfully before you move forward in any location. I think there will be a lot of activity up there. It gives us time to get our act together and make sure we do it right.

On the ANWR side of things I would like to see us take a different approach. I look back over the last 20 years - it doesn’t matter whether it’s been a Republican president, or a Democratic president, a Republican-led Congress, or a Democratic-led Congress. Something about that dynamic is not working. I tend to look for a more collaborative approach.

I think Sen. Begich was working hard with that and bringing delegations to Alaska and seeing the size of the shrinking footprint and what it might mean. In the Lower 48, the special places have been developed. There is nostalgia about that. Without people getting an understanding of what it looks like, I don’t think you can change people’s minds.

This governor has been back east a couple of times already. He is trying to establish a productive relationship. Maybe we can invite a delegation of leaders to collaborate with our congressional delegation.

Petroleum News: The U.S. is now chair of the Arctic Council. What would you like to see for Alaska in this role?

Tarr: Of course, we are what makes the United States an Arctic nation. Hopefully for some folks, it will show that being part of an international organization, or an international delegation, that talks about policy and how we can get together can be a very positive thing.

We’ve seen here sometimes people want to steer clear of that and don’t want someone else telling us how we are going to live and what we are doing to do. I can appreciate that to some degree, but I think this Arctic Council opportunity will show that when you work with similar groups that you can do something productive. Hopefully, with all of this, people will understand Alaska a lot better.

Petroleum News: The State Department’s agenda with this is climate change driven, but many here want the focus to be on economic development. Can Alaska make some headway?

Tarr: I think so. We talk about how we are a little behind. We need to get up to speed on things and keep the communication open on this. We’ve heard from Sen. Murkowski on this. So those conversations will come together and we’ll be able to recognize some of those opportunities.