www.AlaskaAlliance.com 21 WWW.SHEETMETALINC.COM WE’RE MORE THAN JUST ALASKA'S PREMIER METAL FABRICATION FACILITY HVAC • PLUMBING & HEATING • CONTROLS • SERVICE & MAINTENANCE • CERTIFIED AIR BALANCING • UV LIGHTING ONE SOLUTION. ONE COMPANY. if legislators had built up a real head of steam to do something to stimulate new gas and avert the need for imported LNG. An intense late winter cold snap had focused the attention of legislators following a sharp drawdown of gas availability due to mechanical problems at a gas storage facility. While this wasn’t directly connected with the depletion of reserves it was a warning of things to come. Why didn’t the gas incentive bills pass? Basically, legislators were cautious in giving up, or appearing to give up, public revenues by reducing royalties. When the winter cold snap ended and the urgency passed lawmakers became distracted by other issues. The Inlet gas royalty bills progressed, but at a slow pace. Rauscher’s bill, HB 223, was introduced in January. The House Resources held three hearings and moved it March 6. The House Finance Committee held another three hearings and moved it May 10. The bill didn’t pass the House until May 14, one day before the required adjournment. HB 223 went directly to the Senate Finance Committee but with one day left and a pile of bills to deal with senators just ran out of time. The governor’s bill, SB 194, also introduced in January, moved from the Senate Resources Committee on May 9 after five hearings. It made it to Senate Finance on May 10, five days before adjournment. One factor slowing the royalty bills, several legislators said, was a delay in hiring a consultant, GaffneyCline & Associates, to model the effects of the royalty reduction. After it was hired GaffneyCline told legislators that promising new gas prospects would likely be uneconomic at the present state royalty, and a reduction could improve things.The state Division of Oil and Gas came to a similar conclusion. A reduction in royalty is seen as the quickest way to get new gas into production. At least one company was prepared to drill this summer. New gas could have been flowing in matter of months. But with the failure of the royalty reduction that won’t happen, at least this year. — Tim Bradner John Sims, President of Enstar Natural Gas, explaining the long-term implications of the utilities supply choices, speaking to the Anchorage Rotary on April 16.
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