House Speaker Adds Agrium to Refinery Assistance Bill

Gov. Sean Parnell’s $150 million-dollar bill to subsidize Alaska’s oil refineries grew to $200 million today, when House Speaker Mike Chenault expanded it to include the Agrium fertilizer plant in Nikiski.

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The plant has been closed for years, but Agrium said last year it’s considering reopening it.

Chenault, a Nikiski Republican, says he’s been talking to the company for a while about some kind of state incentive to reopen the plant, which has been closed since 2008. Then, a few days ago, the governor proposed a bill to help refineries.  Chenault says Agrium recognized the possibility.

“Well, we’ve been looking, and this happens to be a vehicle,” Chenault explained, “and they did bring it up and said ‘Hey, could we qualify for this?’ So we investigated it and drafted up the amendment.”

Chenault says bringing the plant online could create 450 jobs in his district, plus cheap fertilizer for Mat-Su farmers. House Bill 287 would provide a refinery up to $10 million a year, in tax credits or cash, for five years. To qualify, a company would have to spend $25 million on its infrastructure. The Parnell Administration proposed it to help Petro Star cope with the high price of North Slope crude. Petro Star has two refineries, so it could get up to $100 million over five years. Tesoro and Agrium would qualify for $50 million each. If a company buys the Flint Hills refinery in North Pole, it would also qualify for $50 million.

Democrats who opposed the bill before said the addition of Agrium makes it worse. Sen. Berta Gardner, an Anchorage Democrat, says she’s angry this bill is moving while funding for education remains uncertain.

“It galls me. It seems like the Legislature hasn’t met a tax incentive or tax credit we didn’t endorse,  if it’s for the oil industry.”

It’s as if, she says, industry gets what it wants and kids get the crumbs. Chenault dismissed such comparisons, saying that’s just the Democratic mantra.

The bill cleared the House Rules Committee in about six minutes this morning and heads next to the House floor.