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Alaska Senate passes gas pipeline proposal

Posted: March 19, 2014 - 12:06pm

JUNEAU — The Alaska Senate has voted to advance a proposed trans-Alaska natural gas pipeline project. If approved by the Alaska House of Representatives, the project will enter a period designed to determine its economic feasibility.

The 15-5 nod of approval followed more than six hours of debate on the Senate floor and 23 hearings over the past four-and-a-half weeks.

The proposal gives the state a 25 percent share of the project with portions also held by pipeline builder TransCanada.

“Your vote matters today,” Sen. Anna Fairclough, R-Eagle River, told lawmakers shortly before the vote. “It is a historic opportunity to be part of moving Alaska forward both economically and energy-wise.”

Republican Gov. Sean Parnell proposed the legislation earlier this year after the state signed tentative agreements with TransCanada and the three main North Slope producers — ExxonMobil, BP and ConocoPhillips.

While there were no vocal opponents to the concept of the project, Democrats and some Republicans had reservations about various parts of the proposal.

Democrats offered 16 amendments to the bill on an array of issues. The Republican majority nixed all 16 proposals as senators from both sides voted with the opposite party on various proposals.

“We go from being king to being a minority shareholder,” said Sen. Hollis French, D-Anchorage, and the minority leader. “We should be driving this train; instead, we’re the caboose.”

A clause in the documents signed by the state last year with TransCanada and the producers states that the contracts are contingent upon enabling legislation that is acceptable to all parties.

“Acting like a sovereign means we should never, ever give the oil industry the authority to veto the laws we put in place,” said Sen. Bill Wielechowski, D-Anchorage.

Under one of the amendments offered by French and his Democratic colleagues, the state would assume a majority ownership in the project — an idea supported by some Republicans, but not one that is feasible, the finance committee co-chair said.

“We can’t be a business partner at the level we want because we don’t have enough money — even if we’re going to just take a chunk of this thing, we don’t have enough money,” said Sen. Pete Kelly, R-Fairbanks.

The solution offered was to partner with TransCanada whose incentive is to get more gas moving through the pipeline, which makes it the “best partnership we could be in,” Kelly said.

Still, the involvement of TransCanada was a sticking point for many Democrats who opposed the bill. It also was the reason Republican Sen. Bert Stedman of Sitka sided with Senate Democrats in voting against the bill.

“A sole source, non-competitive bid resulting in a multi-generational contract with TransCanada is not in the state’s best interests,” Stedman said in his press release explaining his “no” vote. He added that the state should shelve the bill and take it up next year.

“We have the time and the obligation to do it right,” he said.

A core issue raised by local governments — the ability of municipalities to influence the taxes and fees owed to them — was addressed in an amendment to the original bill during the committee phase, but not well enough in some lawmakers’ eyes.

Democrats proposed an amendment that would give the local governments a more powerful role than an advisory adopted by the committee.

“Property owners will be highly, highly unhappy when they find out that way back in 2014 that this legislature crippled the ability of their municipality to get a fair price out of their share of the pipeline,” said French.

Fairclough previously told the Juneau Empire that giving municipalities “veto power” could allow single communities to hold out for small amounts of money that could jeopardize the project’s chances.

That sentiment was echoed in response to the amendment on the floor Tuesday by Sen. Fred Dyson, R-Eagle River, when he said there needed to be safeguards to stop “opportunists” who may try to get “way more than their fair share.”

Another amendment would have expressly prohibited the producers from using infrastructure designed specifically for natural gas work as a write-off on their oil taxes.

“Without this amendment, gas expenditures will be like a shark swimming through our oil taxes,” Wielechowski said. That proposal failed on a 4-14 vote.

Amendments that would have changed oil tax rates, reduce the state’s risk in the project by changing the terms of the agreement with TransCanada and install a project labor agreement in statute all failed.

The final amendment proposed aimed to prohibit the state from negotiating decades-long tax guarantees in contracts, but it also failed.

Republicans said many of the concerns raised by Democrats were either covered in the legislation and agreements with the project partners, or they are things that will be sorted out later in the project timeline.

Sen. Peter Miccichie, R-Soldotna, told the body that all the details were not yet known on the project, and that the bill was not intended to answer everything as it represents a “path forward.”

“Alaskans cannot afford to wait any longer,” Sen. Lesil McGuire, R-Anchorage, said, adding, “It’s the right market. It’s the right participants.”

The bill now moves to the House of Representatives for consideration. There is just more than one month left in the legislative session.

Matt Woolbright is a reporter for the Juneau Empire. 

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jokimball777 03/21/14 - 12:59 pm
bill for oil companies, not alaskans

This legislation was introduced and pushed by Senator Coghill- who is a member of the Koch group ALEC.

One of it's biggest supporters Anna Fairclough, also a member of the ALEC group supported by Koch funds.

Senator Dyson who insulted Alaskan communities that wanted their share of property tax supports this, also a member of the Koch group ALEC.

Senator Kelly also quoted in this article as supporting it...belongs to the Koch group ALEC.

I don't know about you all but I am starting to see a pattern.

This bill was created and pushed by Governor Sean Parnell, former employee of Exxon who fought against the people of Alaska in the Exxon Valdez case, who went on to work for Conoco Philips....who now wants us to believe he works for Alaskans.

Micchiche, whose salary doubled while working for a Conoco Philips mothballed plant...also supports this.

There were 17 amendments and every one of them that protected Alaska's investment were shot down with very little dialogue.

The amendment to allow public comment on this bill...shot down without discussion.

This is a $65 Billion dollar gas pipeline which will extend 800 miles. The Keystone XL, by comparison, was over 2000 miles and cost $5 billion.

These Koch legislators think we are the dumbest people on the planet and if they get away with this...we are!

Wake up and fight to stop this legislature from looting our state!

jokimball777 03/21/14 - 04:56 pm
Koch brothers are the reason gas prices are so high

Koch brothers use to have $5 Billion before they lobbied the government to start speculating on oil. Now their net worth is +100 Billion.

The Koch brothers drove up the cost of gas to make themselves billions, and are using their ill gotten gains to buy our legislators.

Is this the type of 'democracy' that Republicans want?

The same Koch brothers who made billions stealing from taxpayers via gas and heating costs, constantly lament that their prosperity is under attack.

Timeline of Koch lobbying efforts while working with Enron to create the Enron loophole....

October 6, 1986: First oil derivative is introduced to Wall Street by traders at Koch

– 1990-1992: Koch, along with several oil companies and Wall Street speculators, form a coalition lobbying group to deregulate oil speculation.

January 21, 1993. Wendy Gramm makes first major move to deregulate oil speculation.

1997: Koch continues to shift from oil refining and pipelines to financial products.

December 12, 2000: Sen. Phil Gramm (R-TX), after being lobbied by Koch and Enron, creates the infamous “Enron Loophole” vastly deregulating the oil speculation market.

2008: Rampant oil speculation spikes prices to unprecedented levels.

2009: Koch presentation to ICE boasts that Koch is on the level of transnational big banks and can now be considered one of the world’s top five oil speculators

2010: Koch’s Tea Party front groups and lobbyists fight financial reforms designed to reign in the unregulated energy market

2011: As oil speculation again hits record highs, leading to record high oil prices, Koch’s allies in Congress fight to undermine new reforms and allow unchecked speculation to spiral out of control

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