Vote to support Governor Walker’s veto

For a brief background, the state of Alaska has made substantial progress on two potential gas line projects: the Alaska Liquefied Natural Gas, or AKLNG, and the Alaska Stand Alone Pipeline, or ASAP. AKLNG is jointly owned by the state of Alaska (via The Alaska Gas line Development Corporation) and the big oil producers: TransCanada Alaska, ConocoPhillips Alaska, BP Exploration and ExxonMobil Alaska. The second potential gas line, ASAP, is a fully state-owned project initially conceived to solely provide gas for in-state use. With advances in engineering, the option to expand the capacity of the line and provide both in-state gas and additional gas for export is now being analyzed.

A tremendous amount of data, financial analysis, permitting and community and environmental impact statements have been authorized and collected for both projects. This work product has been shared whenever possible to save costs. Only one line will receive the green light to proceed. In order for Alaska to make an educated decision on the viability and impact of the two current choices, they must have all the data compiled and presented to them. This process is called Pre-FEED, for Pre-Front End Engineering and Design. It is an industry standard in oil and gas development companies to collect the Pre-FEED information and then give a “go” or “no-go” on the project based upon the data collected during the Pre-FEED stage. Alaska has not reached the Pre-FEED stage for either project, but is in the end stages of finalizing both analyses.

It is prudent and expected for debate to occur within the Legislature on which line, or any future ventures, are in Alaska’s best interest. However, HB 132 is a broad, overreaching bill, which fully stops and silences all discussion. More importantly, HB 132 forces Alaska to sign a non-compete clause, telling the big oil producers we will not compete with them for our gas. HB 132 completely keeps Alaska from having any options to solicit, create, explore or enter into any other liquefied natural gas projects other than AKLNG. It voids the financial investment Alaska has already made in exploring her other options. It binds Alaska’s ability to invest, pursue or develop Alaska’s gas until July 2017.

None of the other producers have this constraint. Why would we willingly sign a clause that limits our options and our competitiveness in the international oil and gas development market? Australia is a direct competitor with Alaska’s natural gas and this bill gives them, at a minimum, a two-year head start to promote, sell and develop their gas, while Alaska must sit with hands tied.

HB 132 also removes any leverage that Alaska has in the AKLNG negotiation. What influence can Alaska have if all the other big oil parties know that Alaska has no option but to agree to their terms? How can we negotiate, in the best interest of Alaska, when we are bound to accept whatever scraps we are given? This bill impacts the Mat-Su Valley directly. The current route for the gas pipeline proposed by the other three oil companies bypasses Port MacKenzie by 60 miles. The governor has said he will advocate for the Mat-Su to bring the gas to Port MacKenzie, but HB 132 eliminates his ability to have any influence over AKLNG project structure or design.

Not only does this bill bar Alaska from pursuing any other LNG projects other than AKLNG, it also indefinitely prevents Alaska from marketing Alaska’s gas. Under HB 132, Alaska cannot market Alaskan-owned gas without the written permission of the Big Oil Producers. This dramatically affects Alaska’s ability to market Port MacKenzie, ANWR, North Slope and all other known and unknown Alaskan natural gas. This barrier directly impacts the success of the Port MacKenzie Railroad Segment being finished. It affects the eight months of negotiations that Mat-Su Borough has been involved in with REI and WES PAC — two companies who are eager and willing to finance and build two LNG plants at Port MacKenzie to export Alaskan LNG within Alaska and internationally. HB 132 is a crippling bill to the Mat-Su as well as the rest of Alaska. It has the destructive power to eliminate the growth of Port MacKenzie, it discourages future investment from companies site shopping Mat-Su, it ties our hands to market Alaska’s gas and development, and it eliminates the ability to bring a gas line and all the financial growth that comes with it to Port MacKenzie. This project is an example of the economic development that our communities have been working toward with the significant investment in the Port at Point MacKenzie. This is beyond politics — the financial well-being of our communities is at risk. I urge the Mat-Su Delegation to defend our communities and stand up for the Mat-Su by voting no on the HB 132 veto override.

Please contact your senator and representative and ask them to defend the Mat-Su and vote no on a HB 132 veto override.