Walker, Chenault spar over AK LNG session agenda

Later this month, state lawmakers will convene for their third special session of the year — this time to discuss the Alaska LNG project. That’s the proposal for a massive pipeline to bring natural gas from the North Slope to Nikiski for export.

But with just two weeks to go, lawmakers have yet to see the legislation they’ll be discussing – Governor Bill Walker hasn’t released it.

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The proposed pipeline route for the Alaska LNG Project, a consortium of oil companies (Image courtesy of the Alaska LNG Project).
The proposed pipeline route for the Alaska LNG Project, a consortium of oil companies (Image courtesy of the Alaska LNG Project).

“What’s going on? How did we get here?”

Those were the questions posed by House Speaker Mike Chenault in an op-ed published in the Alaska Dispatch News this past weekend. He complained that Gov. Walker called the legislature into special session without making clear what, exactly, they’ll be there to talk about.

And that, he said, is a problem for the Alaska LNG project.

“Indecisiveness causes delays, and delays have a way of killing projects like this,” Chenault said, speaking later to APRN.

Originally lawmakers had expected to discuss a wide range of issues surrounding the pipeline — including agreements on how it would be taxed. The project is currently a partnership between the state and ExxonMobil, BP, ConocoPhillips, and the pipeline builder TransCanada.

But the state and producers haven’t been able to agree on most issues. Instead, Walker called the session to discuss just two things — a proposal to buy out TransCanada and a natural gas reserves tax, which would dock producers for gas left in the ground. Walker hadn’t discussed that idea with lawmakers before proposing it, and Chenault said it threatens to undermine the project.

“I fail to see where threatening your partners with a reserves tax incentivizes folks investing $65-billion into a one-of-a-kind natural gas pipeline project,” he said.

But Walker insists his proposal isn’t threatening anyone — he just wants to ensure that if the project goes forward and one partner decides to pull out, they can’t then refuse to ship their gas through the pipeline. That would be a potential death knell for the project.

Speaking with reporters on Thursday, Walker said all that will be clear — once he releases the legislation.

“We want to make sure that gas is available for a project. That’s all we’re talking about,” he said. “So we should have that out in advance of the special session.”

The governor didn’t say when the legislation will be ready — just that it will be ready soon. (On Friday, Walker followed up with a letter to Chenault, in which he said that the bills for the special session are still being finalized by the Department of Law and will be transmitted to the legislature before the session begins. “I reject your assumption that I have not been forthcoming about my intentions,” Walker wrote.)

Meanwhile, Department of Natural Resources Commissioner Mark Myers, told a natural gas conference in Washington, D.C., this week that the project is on track.

“A lot of work has been going on in reality,” Myers said. “This project is further along than any other [gas line] project in the history of Alaska.”

Myers said that tensions between the state and its oil company partners — and between the governor and lawmakers — shouldn’t get in the way of the big picture.

“I know the governor’s concern is that because of the competing projects and the level of state investment, we don’t want to be a third of the way into the project and have it not materialize, because it’s so important to Alaskans,” he said.

Lawmakers will have their chance to weigh in starting Oct. 24, with the beginning of the special legislative session in Juneau.