Three area lawmakers told a crowd gathered Friday they were encouraged about the prospects of solving some of the state’s biggest questions — tweaking oil taxes, shrinking the state’s operating and capital budget and getting gas from the North Slope to Alaskans.
House Speaker Rep. Mike Chenault, R-Nikiski, said what’s needed is hope. Coincidentally, Chenault recently acquired the small town of Hope in his district during the most recent round of redistricting.
“The representative that used to represent Hope said that you can look at it that way, Hope in your district, or you can look at it as you represent Hope and all lands beyond,” he said to about 100 people gathered for a lunch meeting of The Alliance at Paradisos Restaurant in Kenai.
Chenault spoke along with new elected Senators Cathy Giessel, R-Anchorage, and Peter Micciche, R-Soldotna.
Giessel, who is the incoming chair for the Senate Resources Committee, said she is “thrilled” with the makeup of the new Senate.
Chenault said he, the two senators, and Rep. Kurt Olson, R-Soldotna, perhaps aligned closer on many issues facing the state than many other lawmakers representing one area. Micciche said he expects the local delegation to reach out to other lawmakers, specifically in the Senate, to accomplish work that has “languished” in that body the last few years.
“We have a lot to do and I think we will accomplish great things,” he said. “If some of the issues I have covered sounded bleak or negative they have been and that’s why the Micciches are headed to Juneau.”
Chenault mentioned last session’s failed efforts to pass a bill that would pave the way for a natural gas pipeline from the North Slope to tidewater in Southcentral. He said he plans to take that issue up again.
“I think it is imperative that Alaska has an energy supply that lasts for at least 100 years,” he said. “We have that and it is sitting at least 800 miles away and that’s the problem.”
Chenault’s plan would have allowed the Alaska Gasline Development Corporation the tools to usher to open season a 24-inch, 500 mcf per day gasline from Prudhoe Bay to Point MacKenzie.
“We certainly haven’t had a Senate the last couple of years that had much interest in moving that (forward) even though it affects every one of those Senators; we haven’t had that opportunity,” he said.
Giessel said alternative energy sources should be examined, but those need to be economical.
“Subsidizing all of these options really isn’t, in my opinion, the best way to go,” she said. “Maybe to help them get started, but these need to be economic options that will continue without state or government subsidies. Really when you look at the long term picture hydrocarbons are the fuel of the future for certainly several decades to come.”
Micciche said a gas pipeline from the North Slope would not discourage gas exploration in Cook Inlet.
“I like the current activity, market conditions are certainly favorable and I’ll be looking at specific incentives for improving legislation to encourage additional Cook Inlet exploration and production,” he said.
Said Chenault, “I’m glad they are here in (Cook Inlet), I hope they find gas, I hope they find oil, but that doesn’t drive the state’s budget.”
What drives that budget, however, is the amount of oil flowing through the trans-Alaska oil pipeline and as such, Chenault said the state needed to reverse declining production trends through tax adjustments.
“Right now I think what we have is that corporations can make money and make better money elsewhere and that’s where you are seeing the investment,” he said.
Giessel agreed, adding the state needed to work as a “partner with the industry.”
“We know that with a different tax structure those legacy fields become economic to develop,” she said. “That is the fastest way to get more oil in our pipeline. That can be within two years, increased flow through that pipeline.”
Micciche said he hopes lawmakers will investigate a wide swath North Slope production issues.
“Notice we are not calling the committee an oil tax committee and the reason is that we will be investigating all the obstacles to increase production such as permitting issues, access, leasing and competitive tax structure,” he said.
Giessel also touched on the state’s budget, the first draft of which was released by Gov. Sean Parnell around the same time as the three lawmakers spoke Friday.
“We have to stop spending like drunken sailors and think about future generations,” she said.
Parnell’s proposal called for a slight 1-percent increase in the operating budget from last year but a significant cut to the capital budget — about $1.1 billion less from this year.
Chenault reasoned that a smaller capital budget might not bode well for the local community, but the state needed to live within its means, he said.
“You’ll never get all that you want, and I’m not there to get you all that you want,” he said. “I’m there to get the people of the Peninsula what they need and I think that we have done a fairly good job at that.”
Brian Smith is the city editor of the Peninsula Clarion.