The state’s buyout of gas pipeline partner TransCanada advanced on Monday to the floor of the Alaska Senate en route to what seems to be an inevitable approval.
After a morning hearing, the seven members of the Senate Finance Committee voted to pass Senate Bill 3001 out of committee. The only member of the committee not voting in favor of advancing it to the floor was Sen. Mike Dunleavy, R-Wasilla.
A vote of the full Senate could take place as soon as Tuesday.
Before the passage out of committee, Senate Finance Committee chairwoman Anna MacKinnon, R-Anchorage, called a succession of state commissioners and gasline experts to testify and give one final opinion on SB3001.
The committee had revised the bill after state agencies said they needed less money to complete their role in the current phase of the project.
The Legislature remains in special session as it weighs whether to allocate $157.6 million to pay for the state’s share of the first phase of AKLNG, a megaproject that would take gas from the North Slope to Cook Inlet at a cost of between $45 billion and $65 billion.
To avoid paying up front for its one-quarter share in the project, the state entered into a contract with Canadian firm TransCanada. Under the terms of the agreement, TransCanada pays all of the state’s direct costs until construction begins, then half of the state’s share of construction costs. In return, the state gives TransCanada a cut of its revenue once gas starts flowing.
If the pipeline deal falls apart for any reason, or if TransCanada wants to walk away from it, the state must repay TransCanada every dollar plus 7.1 percent interest.
That’s a high interest rate compared to the open market, which is why the state is considering a buyout and has earmarked $68 million of the legislative request to take an “offramp” built into the TransCanada contract. If the state doesn’t act by Dec. 31, its next offramp is years (and hundreds of millions of dollars) later.
In the House, lawmakers used a Monday hearing to launch questions at state officials familiar with the project, then took public comment from Alaskans.
Most who offered their two cents were in support of the buyout.
“I support the 48-inch pipe, and I want to see TransCanada phased out in the honorable way you are doing,” said Bill Warren of Nikiski.
He said Alaskans who compare AKLNG to the failed Delta Barley Project or the failure of the Matanuska Creamery are doing Alaska no service. “You’ve got to have a pipeliner’s mentality,” he said. “We’ve got to get it done.”
Barbara Huff Tuckness, a spokeswoman for Teamsters Local 959, said “We do believe it’s a positive thing going through.”
Juneau engineer Mark Morris said he heard about the opportunity to talk from Rep. Sam Kito III, D-Juneau, and decided to stop by.
In his testimony, he compared the state’s situation to what it was in the 1970s.
“I call this the Jay Hammond days all over again,” he said.
He said the whole state has benefited from the oil pipeline, and it stands to do the same from a gas pipeline.
Anchorage’s Tom McCosh offered the sole voice in opposition to the buyout.
“I oppose this corporate welfare and bailout of TransCanada,” he said by phone.
Among the handful of ordinary Alaskans who spoke — testimony lasted only half an hour — McCosh was in the clear minority.
Most who offered their opinions had views similar to that of Chugiak’s Bill Nelson. “I’m tired of repeating mistakes that we have done,” he said, comparing the current gas pipeline to past ideas. “It’s about time that the state took it over.”