Gas line bill moves forward

JUNEAU — Mat-Su lawmakers staunchly supported Gov. Sean Parnell’s gas pipeline bill, helping the Legislature approve the legislation during the waning hours of the session’s 90th and supposedly final day.

That proposal, Senate Bill 138, is deemed “enabling” legislation for a liquefied natural gas project that could cost up to $65 billion to get North Slope’s 35 trillion cubic feet of proven reserves to local and foreign markets.

The bill essentially authorizes the governor to draft project development negotiations with North Slope leaseholders Exxon Mobil, ConocoPhillips and BP, and pipeline company TransCanada.

The House approved the bill, 36-4, early Sunday evening, and the Senate agreed with changes the House made to the bill later that evening.

In doing so, the Legislature crossed SB 138 — among the governor’s key priorities outlined before the session — off its list.

But the lawmakers did not close out the session as mandated under state law; instead, they continued into the 91st day, as allowed by the state’s constitution.

House Resources co-chair Eric Feige, R-Chickaloon, took the lead on behalf of the 40-member House by leading the floor discussion late Sunday afternoon.

“It’s kind of important that before you set out on a journey you have an idea where you’re going and what your objective is here,” Feige said in addressing his colleagues. “The objective the citizens of this state have looked toward for a great long time is a prize. It’s a prize of less expensive energy for all Alaskans and the long-term boost to our economy and to our state’s treasury that a gas pipeline project can bring to us. It will add to our state’s economic stability, to our state’s energy security, so our children and grandchildren will stay here and prosper.”

Parnell called the passage “truly a historic moment for Alaskans,” in a prepared statement.

“By passing SB 138, the Legislature has put Alaska on a path to controlling her own destiny by becoming an owner in the Alaska LNG Project,” Parnell said in the statement.

“Alaskans have waited a long time for a gas line, and for the first time in our history, we have alignment, authorization from the Legislature, and a clear path forward. The Alaska LNG project has begun.”

There still is no guarantee that a project will occur, and many lawmakers remain anywhere from cautiously optimistic to skeptical, largely because of past attempts to advance a project.

In 2006, Gov. Frank Murkowski presented the Legislature with a proposed contract that went nowhere, as most lawmakers then thought it gave away too much to the producers.

In 2008, Sarah Palin’s Alaska Gasline Inducement Act produced a license to TransCanada, which was required to advance a project toward permitting in exchange for reimbursement up to $500 million. Markets changed that overland line to an LNG project.

Natural Resources Commissioner Joe Balash said he understands lawmakers’ feelings. He’s been around for each of these developments, either as a staff member to the Legislature, or to Palin or Parnell’s administration.

“I absolutely appreciate the perspective they come to the table with,” Balash said. “By no means are we popping champagne corks around here. This is giving us permission to do a lot more work. As we do that work, we’ll get a better sense of whether or not this project is a contender.”

Should the project move forward, it would give the state a 25 percent equity stake in the finished gas line. While it’s not uncommon for a state or municipality to own or operate certain infrastructure, such as a port, roads or even rail, this endeavor stands out as something different.

Feige also addressed this on Sunday.

“In all of our dealings in the oil business, up to this point we’ve taxed and collected royalties; now we are seeking to enter into a partnership,” he said. “That is a change in approach where the state is a partner, as opposed to simply a sovereign.”

Wasilla Rep. Lynn Gattis said this project’s time has come.

“Alaskans dream big, and knowing that we have such vast resources, it’s been hard knowing that opportunity after opportunity pass us by regarding a gas pipeline,” she said. “Many of us who were around during that first pipeline know what those opportunities bring.”

Big Lake Rep. Mark Neuman said it’s the Legislature’s responsibility to create a business climate that foster’s economic growth, and SB 138 illustrates that.

“Is it our job here to create those opportunities in our communities? Absolutely,” Neuman said. “So I like this project. It brings a lot of opportunities to this state in a lot of different ways. It will diversify our economy.”

Freelance reporter Steve Quinn is a veteran Alaska journalist who formerly covered state government for the Associated Press.