Four bills aim to expand AIDEA role
The Alaska Industrial Development and Export Authority is pretty popular in the state capitol these days.
Sen. Lesil McGuire, R-Anchorage, wants to expand powers for AIDEA, the state development corporation, to partner in the development of Arctic ports in a bill she is sponsoring, Senate Bill 140.
Sen. Bert Stedman, R-Sitka, wants the authority to help finance the Bokan Mountain rare earth mine on Prince of Wales Island, which is in Stedman’s Southeast district. Stedman secured an amendment to another of McGuire’s bills, SB 99, that deals with technical amendments to AIDEA.
Rep. Paul Seaton, R-Homer, wants the authority to be able to finance oil and gas processing facilities for small independent companies exploring on the North Slope. Seaton has introduced the proposal in House Bill 230.
The newest and most ambitious development, however, is a proposal unveiled Feb. 24 by Democratic Sens. Hollis French and Bill Wielechowski, and Rep. Les Gara, D-Anchorage, for AIDEA to partner with small independent oil and gas explorers to take an equity stake in new oil and gas fields, in effect becoming a state oil company.
“The idea is for AIDEA to supply venture capital to small independent companies coming to Alaska who lack capital. This ensures AIDEA would be a partner, and it would help bring more projects on line,” Wielechowski said in a press conference held with French and Gara to announce the plan.
AIDEA has already invested in an oil drilling rig and mining access roads in the Brooks Range, and the state-owned Alaska Gasline Development Corp., is now proposed as an equity partner in the large gas pipeline project, he said.
The Democrats’ bill, in HB 338, was introduced in the state House on Feb. 24. A Senate version was to be introduced Feb. 26.
Senate Bill 140, McGuire’s Arctic infrastructure bill, would set up a special fund within AIDEA to participate with other parties in an Arctic port. The state authority’s share would be limited to one third of the financing needed with a maximum participation of $20 million and a period no longer than 30 years.
SB 140 bill has had one hearing in the Senate committee and is expected to take up the measure again soon, and also adopt several technical changes suggested by McGuire.
The U.S. Army Corps of Engineers is now finalizing its selection of three possible western Alaska port locations that could support increased Arctic shipping and offshore oil and gas support work. It is expected that financing for a port would have to come from a variety of sources including federal and state governments as well as private sources.
The other AIDEA bill by McGuire, SB 99, was introduced to make technical changes in the Sustainable Energy Transmission Supply, or STES, program that was set up within the authority in SB 25, passed in 2012.
The changes clarify the limits on AIDEA financing under SETS to those also in SB 140, on Arctic infrastructure, to one-third of an energy project funding.
Those were to be reviewed when Senate Labor and Commerce committee took up the bill again on Feb. 27.
Stedman’s amendment, which has been accepted for the bill, would allow AIDEA to participate in financing Ucore Rare Metals Corp.’s proposed $221 million rare earth mine at Bokan Mountain.
The company has been engaged in exploration for several years at the prospect and plans to submit applications for permits in the first half of the year, Ucore officials have said.
Rep. Paul Seaton’s HB 230, which had its first hearing in the House Labor and Commerce Committee Feb. 21, would change AIDEA’s statutes by giving the authority permission to help finance oil and gas oil processing facilities in partnership with small independents.
AIDEA is in discussions with Brooks Range Petroleum, an Alaska-based company, on helping finance a processing plant for its small Mustang oil field on the North Slope. The plant would be available for other explorers and developed to use, under the plan.
Seaton’s bill establishes an oil and gas infrastructure fund within AIDEA’s statute and provides that financing limits that apply to other, non-petroleum developments would not apply to the oil and gas projects.
Specifically, current law provides that AIDEA’s bonding authority is capped at $400 million. HB 230 would allow up to $200 million in financing for oil and gas projects outside of the $400 million limit on other AIDEA developments.