Many Gasline Questions Go Unanswered as Governor Walker Vetoes House Bill 132
April 17, 2015
“This veto in no way means the end of discussions with legislative leadership,” Governor Walker said. “We continue to have multiple meetings to ensure AKLNG is successful and remains the priority while maintaining access to a backup option.”
According to the Governor, HB 132 limits the Alaska Gasline Development Corporation (AGDC) from actively working on any gas line project other than the Alaska Liquefied Natural Gas (AKLNG) line. The State of Alaska is a partner in AKLNG along with TransCanada, ExxonMobil, ConocoPhillips and BP.
“We cannot have legislation that ties Alaska’s hands while we are trying to negotiate the best possible gas line deal for Alaskans,” Governor Walker said. “This bill prevents the state from having an adequate backup plan should the AKLNG efforts not proceed.”
HB132 is designed to strengthen the state’s commitment to the Alaska Liquefied Natural Gas project (“AKLNG”), created last year through Senate Bill 138 (SB138). According to Senate Majority Leaders, HB132 was introduced earlier this year after Governor Walker sent confusing signals about “upsizing” the back-up Alaska Stand Alone Gas Pipeline (“ASAP”) project.
“Many familiar with both projects are concerned about the appearance of a competing project to AKLNG,” said Senate Majority Leader John Coghill (R-North Pole). “The legislature is trying to understand Governor Walker’s intentions, but it has been difficult. Meanwhile, we’ve received credible feedback from various groups. There are serious concerns because of the uncertain signals from the executive branch. Alaskans have limited time, and need to understand the costs, benefits, and value of our resource and his plans.”
Governor Walker submitted a letter to the Legislature on April 10, 2015 explaining why felt he needed to veto HB132.
“In his letter, Governor Walker failed to describe his specific plans for this so-called back-up line. The leadership of both the Senate and the House have asked for details. Alaskans are increasingly concerned about Governor Walker’s nebulous gasline plans,” said Senate President Kevin Meyer (R-Anchorage). “Many unanswered questions remain as we head into these final days of Session. Unanswered questions create risk. Too much risk and uncertainty may harm the AKLNG project.”
AKLNG is a $45 to $60 billion megaproject that, according to overwhelming testimony by Alaskans and analysis by global gas and gas pipeline experts, is most likely to deliver the greatest benefits to Alaskans. The AKLNG project has seven currently-involved parties, including specific parties working on issues in the “Pre-FEED stage.” “Pre-FEED” stands for Pre Front End Engineering Design.
The parties working on the “Pre-FEED” include ExxonMobil (the team lead), TransCanada (who represents the state’s ownership interest in the pipeline and gas treatment plant), British Petroleum (“BP”), and ConocoPhillips. The Alaska Gasline Development Corporation (“AGDC”) represents the state’s ownership interest in the LNG plant.
The team is responsible for analyzing project execution plans, refining overall costs and schedules, developing environmental permitting applications, etc.
ExxonMobil, BP, ConocoPhillips, and, most importantly, the state are all working to commercialize natural gas.
State departments (the other parties) also have a role: the Department of Natural Resources will administer the state’s royalty interest and handle pipeline right-of-way issues; the Department of Revenue will administer the regulations and collect taxes.
“AKLNG is the closest we’ve ever been to getting the gasline we’ve dreamed about for decades,” said Senator Meyer. “This is the first time where there is actually alignment on a gas pipeline project. We are working together to commercialize Alaska’s North Slope natural gas. Before the Governor vetoes HB132, we hope he’ll answer questions that Alaskans and industry experts have been asking. One of the questions I’ve been getting consistently is if the two projects are ‘side-by-side’, how can the State be 100-percent behind the success of either? It shows the confusion created by a lack of information.”
“Respectfully, Governor Walker needs to give a full explanation before he decides to take AGDC, and thus the state, in a different direction,” said Senator Coghill. “We certainly hope he’ll consider these questions from Alaskans before vetoing a bill intended to ensure a better future for all Alaskans.”
Governor Walker stated today in his veto announcement that he also continues to meet with AKLNG partners to advance this project. Governor Walker has said multiple times AKLNG remains his administration’s priority and having a backup option with the ASAP line will not interfere with the AKLNG project.
Edited by Mary Kauffman, SitNews
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