Hawker and Chenault Explaining It

We all have Alaskans’ best interests at heart, and want a future of prosperity and opportunity in our state.

While we believe we share many of the same goals and values as the governor, we differ as to the approach to natural gas development that will deliver the greatest benefits to Alaskans.

Let us be very clear about what we want: We want to commercialize natural gas for the highest value possible, for the Alaska Permanent Fund and for the treasury, so every Alaskan may share in the wealth of our resources. We want affordable natural gas to flow to our communities that still suffer under the fluctuating prices of fuel oil. And we want a project that includes the necessary elements — including participation of the North Slope producers and the state — for real success, as soon as responsible project engineering and permitting allows.

The Legislature found that project with the Alaska LNG project, in which the state is a 25 percent owner. But we also preserved our ability to pursue a different project if the Alaska LNG project does not progress into the next development stage. We have that in the 36-inch line the Alaska Gasline Development Corporation has developed. It is in prime position to alter if necessary — and if the Alaska LNG project does not prove viable, we’ll know what adaptations we must make in order to offer a viable project. To increase its size now, to an arbitrary, unsupported volume, is not a prudent use of funds.

That does not provide us a viable alternative should Alaska LNG not progress.

The governor has indicated he sees success in a different framework. Unfortunately, to date, neither he nor his administration have shared those details with us and with the Alaska public. He submitted a letter to the Senate Resources committee on Friday with some explanations for his alternative approach, and we appreciate that. But Alaskans need to know details. What about the liquefied natural gas component — who owns that? And the pipeline — is the state to shoulder 100 percent of the risk and cost? Who will ship gas if one or more of the producers remain engaged in Alaska LNG? If all three producers are not partners, how will the state determine its gas share — and is it enough to support our level of equity ownership?

We want to better understand the terms and structure of his proposal in order to conduct the rigorous vetting and analysis that will allow us to make an informed, responsible decision on a forward course.

The government process is about thorough, open review of ideas, in the form of legislation, that leads to policies. We hold hearings; explore details; call for experts to analyze and model impacts; vet each and every aspect; hear from the public; undertake legal review; and, finally, debate on whether a policy should be adopted.

It is how Alaskans came to be owners of the Alaska LNG project; through a deliberate, well-investigated decision.

Certainly, we would have preferred not to have introduced legislation — House Bill 132 — to temporarily restrict an alternative, conflicting approach and to keep Alaska LNG on track. However, we were compelled to, out of grave concern the administration’s approach would threaten the viability of the tremendous opportunity before Alaska in the Alaska LNG project. A project that is on time, on budget and on track to success. Unfortunately, the few details offered by the governor’s letter reaffirm it is more imperative than ever to pass HB 132, as his approach clearly creates a competing alternative that threatens the state’s investment in and the success of Alaska LNG.

The details of any project are crucial. At stake are the value of our royalty gas, which feeds the Permanent Fund; our state share in production, property and income taxes that support the treasury; the availability and cost of gas for Alaskans and future North Slope resource development. Variations on the SB 138 framework can have significant consequences. These details were not part of the governor’s letter, and we must have these details in order to make a deliberative decision on natural gas policy and the responsible fiscal choices our constituents demand.

We want to work together on a path forward that is responsible, allows for public understanding and input and does not recklessly waste state money pursuing options that lack a proven commercial foundation. Competing with ourselves, while confusing our partners and the markets, is not in our best interest.

Reps. Mike Hawker and Mike Chenault are members of the Alaska House of Representatives’ majority caucus. Rep. Hawker, R-Anchorage, has served in the House since 2002. Rep. Mike Chenault has served since 2000 and has been the Speaker of the House since 2009.