Legislature(2009 - 2010)CAPITOL 120

04/14/2010 09:00 AM House RULES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved Out of Committee
Moved CSHR 17(RLS) Out of Committee
Moved HCS SB 301(RLS) Out of Committee
Bills Previously Heard/Scheduled
         HR  17-EXPORT LICENSE EXT. FOR KENAI LNG PLANT                                                                     
9:17:53 AM                                                                                                                    
CHAIR DAHLSTROM announced  that the next order  of business would                                                               
be HOUSE RESOLUTION  NO. 17, Urging the  United States Department                                                               
of Energy  to expeditiously approve  a two-year extension  of the                                                               
export license for the Kenai liquid natural gas plant.                                                                          
CHAIR DAHLSTROM then announced that  before the committee is CSHR
17, Version 26-LS1670\R, Wayne, 4/13/10.                                                                                        
9:17:58 AM                                                                                                                    
TOM  WRIGHT, Staff,  Representative Mike  Chenault, Alaska  State                                                               
Legislature,  speaking  on  behalf  of  the  sponsor  of  HR  17,                                                               
Representative  Chenault,  explained  that  HR  17  supports  the                                                               
extension of  the export license  of the Kenai  liquefied natural                                                               
gas (LNG) facility.  The facility  has been operating for over 40                                                               
years.     Currently,  the  Kenai   LNG  facility  is   the  only                                                               
significant  industrial  user  of  natural  gas  in  Southcentral                                                               
Alaska.    The facility  received  a  two-year extension  to  its                                                               
export license in  March 2009 and thus will expire  in 2011.  The                                                               
facility, he related, is owned  by the Kenai LNG Corporation with                                                               
ConocoPhillips owning 70 percent  and Marathon owning 30 percent.                                                               
Both  parties have  agreed to  seek  an extension  of the  export                                                               
license.   The application would extend  the export authorization                                                               
through March 2013.  He noted  that the extension request will be                                                               
for existing  volumes of  natural gas and  no increase  in volume                                                               
for export will be requested  for the 99 trillion British thermal                                                               
units  (Btus)  that was  authorized  by  the U.S.  Department  of                                                               
Energy  in 2009.    Mr.  Wright highlighted  that  the Kenai  LNG                                                               
facility  contributes heavily,  $130 million  per year,  to state                                                               
and local economies  and supports 60 direct jobs  and 50 indirect                                                               
jobs, which account for $17  million annually in personal income.                                                               
Furthermore, production of gas for  feedstock to the facility and                                                               
the sale of  LNG generate approximately $60  million in royalties                                                               
and taxes  for the  state and  the Kenai  Peninsula Borough.   In                                                               
conclusion, Mr.  Wright pointed  out that  this resolution  is of                                                               
importance to the sponsor's district as well as the state.                                                                      
9:20:01 AM                                                                                                                    
REPRESENTATIVE GARDNER  noted her strong support  of the proposed                                                               
extension as  it serves  an important  function for  the Railbelt                                                               
energy.   She then recalled  that the  Kenai LNG facility  has an                                                               
agreement  that  it  would  reduce   its  gas  consumption  in  a                                                               
circumstance  in which  the  Anchorage area  utilities  are in  a                                                               
crisis situation.                                                                                                               
MR. WRIGHT deferred to the representative from ConocoPhillips.                                                                  
9:20:46 AM                                                                                                                    
PORTIA    BABCOCK,    Director,   State    Government    Affairs,                                                               
ConocoPhillips,  confirmed  that  the  Kenai  LNG  facility  does                                                               
divert  gas from  the Kenai  LNG  facility to  the local  markets                                                               
during  emergencies and  when there  are critical  deliverability                                                               
events, as  they arise.   She said  that the  aforementioned will                                                               
continue to be  the case.  In further  response to Representative                                                               
Gardner,  Ms.  Babcock  clarified   that  there  isn't  a  formal                                                               
agreement to that effect; rather it's just an understanding.                                                                    
9:21:33 AM                                                                                                                    
REPRESENTATIVE  OLSON  moved  to  report  CSHR  17,  Version  26-                                                               
LS1670\R,  Wayne,  4/13/10,  out  of  committee  with  individual                                                               
recommendations and  the accompanying fiscal notes.   There being                                                               
no  objection, CSHR  17(RLS) was  reported from  the House  Rules                                                               
Standing Committee.                                                                                                             
9:21:46 AM                                                                                                                    
The committee took an at-ease from 9:21 a.m. to 9:24 a.m.                                                                       

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