City of Valdez plans big campaign against gas line

(AP) — The city of Valdez plans to spend up to $900,000 to try to defeat a bill aimed at advancing an in-state natural gas pipeline project.

City manager John Hozey said a large-scale line capable of feeding overseas exports makes more sense for Alaska.

Valdez has hoped to be the terminus for a major line, when and if one gets built, but Hozey said the PR campaign — including ads and a website — is geared at supporting what Valdez believes to be the better project. The city is using money it has won in challenges over taxation of the trans-Alaska oil pipeline to fund the effort, he said.

"We will only have one opportunity to build the gas line that will bring low-cost energy to all Alaskans ... and bring revenue to the state to fund all the things that are important to all of us," like education, transportation and public safety, he said. "If we blow our chance on this (smaller) line, then we've lost our future."

A number of other communities and groups have expressed support for the in-state gas bill, HB4, including an Anchorage energy task force, the city of Fairbanks, the mayor of the North Slope Borough, resource development groups and chambers of commerce. Hozey said he worries that communities aren't getting the full picture.

House Speaker Mike Chenault, a primary sponsor of HB4, sees the smaller line as a project that has momentum. He said the bill would provide the tools needed for the Alaska Gasline Development Corp., or AGDC, the group behind efforts to advance the line, to get to an open season. An open season is a period during which gas producers commit to using a pipeline, so officials can determine if there is sufficient interest for a project to move forward.

A similar effort stalled in the Senate last year, amid concerns including the powers that would be given to AGDC, the cost to the build the line, and what customers would ultimately pay. Some of those same concerns persist as the bill is heard in the House with about 3 1/2 weeks left in the legislative session.

Rep. Chris Tuck, D-Anchorage, said the proposal gives him "serious heartburn" and would give "too much away" to get to an open season.

Under the bill, AGDC, now a subsidiary of the Alaska Housing Finance Corp., would be made an independent public corporation overseen by a board confirmed by the Legislature. Its powers would include the ability to determine ownership of a pipeline developed by the corporation; plan, finance and build a pipeline system; issue bonds for project financing; and exercise eminent domain to acquire land deemed necessary for the pipeline.

Gov. Sean Parnell said Thursday he supports moving the project forward but has some concerns with HB4 that must be addressed first, including the makeup of the board and regulatory provisions.

"There needs to be accountability for the cost of gas to Alaskans, so this corporation cannot just go out and finance a pipeline and charge Alaskans through the nose for Alaskans' gas," he said. He also thinks there should be some commissioners on the board to help make it more accountable.

Parnell said he has been working with the bill's sponsors and shares their goal "to get gas to Alaskans first."

Rep. Mike Hawker, R-Anchorage, told the House Finance Committee Thursday that HB4 is about "taking care of Alaskans first, not taking care of Asian markets."

"HB 4 provides AGDC the authority and resources to develop, finance, and operate a 500-million-cubic-feet-per-day gas pipeline from the North Slope, serving Fairbanks and Southcentral, at the lowest possible cost, without delay," he said in a separate sponsor statement.

Chenault, R-Nikiski, said he thinks the bill has a reasonable chance of passing. "If it does, we think we've got probably the best shot in a number of years of actually getting a project to sanction and getting a project built," he said.

If it doesn't, he said the project timeline could slip by at least another year.

03/22/2013 - 6:59am