Homer Alaska - News

Story last updated at 3:51 PM on Wednesday, June 29, 2011

Governor vetoes Homer area natural gas pipeline

By McKibben Jackinsky and Michael Armstrong
Staff writers

Gov. Sean Parnell on Wednesday announced cuts he has made to the state's capital and operating budgets.

Not funded is the $10 million natural gas pipeline that is proposed to run from Anchor Point to Homer and Kachemak City.

Left in the budget is $9 million for the Homer solid waste transfer facility.

The pipeline was at the top of the city of Homer's capital project priority list, while the solid waste transfer facility was the main capital project priority for the Kenai Peninsula Borough.

Rep. Paul Seaton, R-Homer, and Sen. Gary Stevens, R-Kodiak, both expressed disappointment with Parnell's veto. Seaton said he didn't understand why Parnell vetoed the gas line when it fit the governor's criteria for supporting capital projects — stimulating economic development and creating jobs now.

"This was ready to go," Seaton said. "This is an energy project that would have had huge economic value."

"I'm really sorry about that," Stevens said about the gas line veto. "I think the community did its best. I can't think of another project in which we had so much local input."

Seaton said he wondered why Parnell vetoed the Homer gas line when he left money in for other gas projects, such as funding to explore bringing a bullet line from the North Slope to southcentral Alaska.

"He left the $200 million to study getting gas to his house, the North Slope to Anchorage," Seaton said.

Stevens didn't think the veto was payback for Seaton and Stevens not supporting Parnell's proposed changes to the oil tax structure.

"The governor has taken the high road on other issues," Stevens said. "If the governor was out to get me, he would have hit a couple of projects here in Kodiak that survived."

Bill Smith, who represents the city of Homer on the Kenai Peninsula Borough Assembly, said Parnell's veto of the natural gas pipeline was "a punch in the gut, but we have to keep going."

"I'm quite disappointed," said Smith. "We did all our homework, did all the calculations to show the benefit to the state, that the community was investing in it. ... When (Parnell) leaves $1.5 million in for the Great Alaska Shootout (basketball tournament), what's up with that?"

Smith doesn't view Parnell's action as the final curtain for getting a natural gas line from Anchor Point to Homer and Kachemak City.

"The governor's staff is considering the future budget and I'm going to ask him to consider putting the pipeline in his budget, rather than waiting for the Legislature to do it," said Smith. "I'd like him to give us that due consideration unless he has some other thing that he's not telling us. I think it's time for him to step up and match his actions with the reality of the situation. This is a needed utility extension that gives cost relief to the south peninsula residents."

Although Homer Mayor James Hornaday said he was disappointed about the governor's veto of the gas line, he "was not really surprised."

"It just wasn't very well received when we talked to administration people," Hornaday said of reactions in Juneau.

He was pleased that other projects for the area were left untouched by the governor's pen.

"East End Road work, the cruise ship dock, Diamond Ridge (fire station and equipment building), that's very good," said Hornaday. "Hopefully a lot of local guys will get some work. We need that."

Projects in the capital budget, Kenai Peninsula wide, including House Districts 33-35, totaled $104,390,701, but Parnell's veto pen sliced off $39,003,900. Projects specific to the southern peninsula that will be funded are:

• Homer solid waste transfer facility, $9 million;

• Battle Creek Diversion (Bradley Lake), $6 million of $15 million in Legislature's version of tbe capital budget;

• Homer cruise ship dock and passenger facility improvements, $6 million;

• East End Road rehabilitation, milepost 3.7-12.2, $3.5 million;

• Homer apron taxiway pavement rehabilitation, $3.2 million;

• Ninilchik village bridge replacement, $2.2 million;

• Nanwalek and Port Graham airport master plan, $1 million;

• Diamond Ridge Fire Station and Equipment Building, $350,000;

• Ninilchik fairground improvements, $328,384;

• Nikolaevsk community natural gas pipeline, $197,000;

• Seldovia city business center environmental, $125,000;

• Port Graham Village Council biomass waste heat demonstration project, $75,000;

Two items impacting the southern peninsula that were not funded were:

• Homer area natural gas pipeline, $10 million.

• Battle Creek Diversion (Bradley Lake), $9 million of the $15 million in the Legislature's version of the capital budget;

McKibben Jackinsky can be reached at mckibben.jackinsky@homernews.com. Michael Armstrong can be reached at michael.armstrong@homernews.com.