Blog: Capital Focus
Bullet line aiming for AGIA?
Published Thursday, April 3, 2008
The roll-out of the gas line resolutions yesterday raised a lot of questions. Were lawmakers trying to divert attention from the capital budget? Why did they use a resolution to tell Gov. Palin something rather than just call her? And what kind of pipeline are they talking about?
One of the biggest questions was whether the resolutions were an attempt to undermine AGIA and the TransCanada proposal. On the Senate floor, Sen. Gary Wilken of Fairbanks suggested it was. He said he was voting against the resolution in part because he thought it was a way to give people “a place to hide” during the special session in June, when Palin could ask lawmakers to approve the TransCanada plan.
Conspiracy theory? Most of those who promoted the resolution yesterday flat-out denied they were trying to block AGIA. Rep. Ralph Samuels of Anchorage, the only lawmaker to vote against AGIA last year, stressed that he still thought a big pipeline was needed for long-term state revenues and saw this effort as completely separate. (He mimed a gun to his head when I suggested they could do a mini-AGIA for the small line.) Sen. Bill Wielechowski of Anchorage said the same. “I don’t think this has anything to do with TransCanada at all,” he said. “This is just saying we need the gas now.”
As for the timing, House Speaker John Harris of Valdez pointed to the urgency of the issue -- Alaskans are being crippled by energy costs -- and Senate President Lyda Green of Wasilla pointed to the army of consultants already working on natural gas issues.
On the other hand, it’s reasonable to think the effort will interfere with AGIA, if not quite block it -- as if lawmakers hadn’t put enough emphasis on speed and in-state use when they approved the gas line law. “We want the AGIA concept to include in-state gas, too,” Harris said.
Green said Alaskans in general seem to have lost interest in the big pipeline project and are more interested in getting something built fast as a way to reduce energy costs. (I’ll note here that the focus for years was getting a pipeline to meet the state’s revenue needs as oil production fell. Only now that the state is rolling in cash has that driver been forgotten and replaced by the need to find an economic energy source for Alaskans.)
To that end, Green said she was interested in studying the “all-Alaska” gas line proposals -- not just the “in-state” proposals -- and said lawmakers would have to wait and find out if those lines competed with a bigger project pursued through AGIA.
Even if the intention is to work simultaneously on separate pipeline projects, the effect of expanding the special session to include the smaller line could effectively blow the AGIA process wide-open. When I asked Harris if the resolution would apply to the port authority’s plan, for instance, he said, “It opens to the door for everybody,” and mentioned ConocoPhillips also. (Samuels disagreed.)
To some extent, AGIA anticipated the desire for a small line in addition to the main one. It blocked the state from supporting a “competing” project once it picked an AGIA licensee, but made an exemption for a small line carrying less than 500 million feet of gas a day -- enough to meet all the state’s needs, anyway. But according to Revenue Commissioner Pat Galvin, such a project simply isn’t economic -- the pipeline tolls needed to recoup the cost of the line would be too high. It makes sense that lawmakers would ask how they could make such a project more economic, and the logical answer would be to make it bigger. Take too much gas, though, and the AGIA pipeline project starts to fall apart.
In the end, it seems like different lawmakers are backing the resolution for different reasons. And even if the intention is not to undermine AGIA, the effect could be.
Stefan:
Just want to thank you for your reporting. Don't have time to comment now, but you do a good job.
I appreciate it.
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