Legislature to convene special session on gas issues

JUNEAU — The Alaska Legislature is set to convene for its third special session this year, this time to consider a buyout of one of the state’s partners on a proposed multibillion-dollar liquefied natural gas project.

Legislators had been expecting a fall special session to deal with gas-line issues, but they will not be presented with contracts as once hoped, since key agreements have yet to be reached between the state and its partners. The special session agenda set by Gov. Bill Walker has the proposed buyout of TransCanada Corp.’s interest in the project as well as a gas reserves tax, which the governor has characterized as a way to make sure the project can’t be stalled if a company doesn’t allow for gas it controls to be commercialized.

Legislators said they’d hoped to get details on Walker’s proposals well in advance to begin delving in. The special session is scheduled to begin Saturday in Juneau. Walker spokeswoman Katie Marquette said bills will be released before the start of the session.

The project being pursued by the state, BP, ConocoPhillips, Exxon Mobil Corp., the Alaska Gasline Development Corp., and TransCanada is the latest iteration of a gas line that’s been seen as a way to shore up revenues in a state heavily reliant on oil. A prior effort, for which TransCanada had an exclusive license with Alaska, fizzled out amid concerns with the North America gas market. The current project would aim to serve overseas markets.

Under an agreement predating Walker’s administration, TransCanada would hold Alaska’s interest in the pipeline and gas treatment plant, with the state having an option to buy back part of that interest. The agreement also contains language allowing the state to terminate the arrangement, though it would have to reimburse TransCanada for development costs, plus 7.1 percent. Walker, who has been vocal in wanting Alaska to have a greater say in the project, has estimated buy-out related costs in the $100-million range.

TransCanada’s inclusion was cast as a way for the state to lessen its share of upfront costs. It also gave the parties a way to get out of the prior, failed gas line arrangement without a messy fight.

Rep. Craig Johnson, R-Anchorage, who serves on the House Resources Committee, said the costs, potential benefits and risks of any buyout need to be examined closely, a point echoed by others.

Sen. Bill Wielechowski, D-Anchorage, said that as the potential cost for state participation goes up, the scrutiny goes up, and legislators will have to feel a certain degree of comfort with what they choose to do.

“The governor needs to justify that this is within our fiscal means,” said Sen. Cathy Giessel, R-Anchorage, and chair of the Senate Resources Committee.

Alaska is grappling with multibillion-dollar deficits amid low oil prices and has been using savings to get by. Administration officials have cited the importance of Alaska maintaining its high credit rating as it pursues the mega-project.

“I think this is going to be an emotional debate involving politics and economics and risk taking and market perceptions and the hope and expectations of a gas line project for Alaska,” said Larry Persily, a former federal coordinator for Alaska gas pipeline projects.

BP and Exxon Mobil have said a reserves tax would complicate efforts to advance the project. Legislators, in interviews this past week, said they wanted to see exactly what Walker had in mind with regards to that issue. Several said they were caught off guard by the inclusion of that issue on the special session agenda.

House Majority Leader Charisse Millett, R-Anchorage, said she would like Walker to be more open with legislators. “We all have to work together,” she said.

As for logistics, the Capitol, which has been undergoing renovation, will be ready to host the special session, said Pam Varni, executive director of the Legislative Affairs Agency. The House and Senate chambers and most legislative offices will be ready, but some members will be in temporary quarters, at least initially, at the Capitol or nearby, she said.

More in News

(Juneau Empire file photo)
Aurora forecast for the week of April 8

These forecasts are courtesy of the University of Alaska Fairbanks’ Geophysical Institute… Continue reading

(Michael Penn / Juneau Empire file photo)
Police calls for Friday, April 12, 2024

This report contains public information from law enforcement and public safety agencies.

(Michael Penn / Juneau Empire file photo)
Police calls for Thursday, April 11, 2024

This report contains public information from law enforcement and public safety agencies.

The sky and mountains are reflected in the water on April 5, 2012, at the Kootznoowoo Wilderness in the Tongass National Forest’s Admiralty Island National Monument. Conservation organizations bought some private land and transferred it to the U.S. Forest Service, resulting in an incremental expansion of the Kootznoowoo Wilderness and protection of habitat important to salmon and wildlife. (Photo by Don MacDougall/U.S. Forest Service)
Conservation groups’ purchase preserves additional land in Alaska’s Tongass National Forest

A designated wilderness area in Southeast Alaska’s Tongass National Forest, the largest… Continue reading

A welcome sign is shown Sept. 22, 2021, in Tok. President Joe Biden won Alaska’s nominating contest on Saturday. (AP Photo/Rick Bowmer, File)
Biden wins more delegates in Alaska and Wyoming as he heads toward Democratic nomination

President Joe Biden nudged further ahead in the Democratic nomination for reelection… Continue reading

Juneau Assembly members and other visitors examine a meeting room formerly used by the nine-member Alaska State Board of Education and Early Development on Monday, April 8, which is about 25% larger than the Assembly Chambers at City Hall. (Mark Sabbatini / Juneau Empire)
Of three possible new City Hall buildings, one stands out — but plenty of proposed uses for other two

Michael J. Burns Building eyed as city HQ; childcare, animal shelter among options at school sites.

Senate President Gary Stevens, R-Kodiak, speaks to members of the Senate majority caucus’ leadership group on Friday. (James Brooks/Alaska Beacon)
Schools, university and projects across Alaska are set to receive money from new budget bill

Alaska Senate sends draft capital budget to House as work continues on a state spending plan

The Boney Courthouse in downtown Anchorage, across the street from the larger Nesbett Courthouse, holds the Alaska Supreme Court chambers. (Yereth Rosen/Alaska Beacon)
Alaska judge strikes down state’s cash payments to families using correspondence school programs

Decision will become a ‘hot-button legislative item’ in final weeks of session, lawmakers say.

A statue of William Henry Seward stands outside the Dimond Courthouse in downtown Juneau. (Clarise Larson / Juneau Empire file photo)
Juneau man convicted of sexual abuse of 15-year-old girl more than four years after incidents occur

JPD: Randy James Willard, 39, sent explicit videos to and engaged in sexual contact with victim.

Most Read