Alaska News

New Alaska gas line bill shows growing rift between House lawmakers and Walker

JUNEAU -- Alaska House Speaker Mike Chenault introduced a bill Monday morning to stop Gov. Bill Walker from using an existing state corporation to develop a state-controlled, large-diameter gas line from the North Slope.

Though the bill would expire in 2017, Walker quickly called a news conference to question Chenault's motives and denounce the measure as a roadblock to a viable project. He vowed to veto the bill if it passed.

The salvos, though officially about a pipeline, demonstrated the rapidly deteriorating relationship between the state's chief executive, a Republican-turned-independent, and the leaders of the Republican-dominated House of Representatives.

Walker last month said he wants to scale up the size of the existing state-owned pipeline proposal to compete with another large project being jointly developed by the state, the major North Slope oil producers and a pipeline company. One state agency, the Alaska Gasline Development Corp., is working on both projects.

In his news conference Monday afternoon, called two hours after Chenault introduced House Bill 132, Walker called Chenault's proposal "shocking" and questioned who Chenault and the rest of the House Republican leadership were working for.

"I find it shocking that we are tying our hands and taking away our ability to do what our Constitution mandates that we do -- that we develop our resources for the maximum benefit of Alaskans. This is why I ran for governor," said Walker, his voice quavering as he brandished a marked up copy of the bill. "Are you kidding me?"

In his own news conference afterward with four other House leaders, all of whom co-sponsored his bill, Chenault, R-Nikiski, said he was concerned about "uncertainty" that had been injected into the projects.

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"My hope is that we don't throw enough monkey wrenches into the progress that they stop," he said, referring to the state's oil company partners in the large pipeline project, known as AKLNG.

In contrast to Walker's angry response earlier in the day, the House leaders appeared relaxed as they spoke while seated on chairs and couches in Chenault's Capitol office.

They rejected Walker's question about who they represented on behalf of the bill. "The governor can say what he thinks, but I certainly represent 17,500 people that live in my district," Chenault said.

"We are statesmen, every one of us," he added. "We're no different than the governor -- we took the same oath that the governor took when he was sworn in."

Chenault's bill was co-sponsored by the Republicans' majority leader, Anchorage Rep. Charisse Millet, and three other members of the Republican House majority: Rep. Mike Hawker, R-Anchorage; Rep. Craig Johnson, R-Anchorage; and Rep. Bob Herron, D-Bethel.

Tensions over the gas pipeline projects have simmered for years between Walker and the Republican leaders.

Only one of the pipelines would ultimately be built, but Chenault and his colleagues have different ideas than Walker's about the best legislative framework to spur development.

The Republicans say the smaller, state-sponsored pipeline, known as ASAP, is a viable backup plan if oil producers opt out of AKLNG.

Walker, meanwhile, maintains that ASAP is too small to achieve economies of scale, with its gas supply projected to be sold at rates significantly higher than current prices in Anchorage.

Walker is a longtime Republican who dropped his party registration before being elected last year with support from the Alaska Democratic Party. The pipeline dispute was central to his gubernatorial campaign, when he attacked the ASAP project, saying it wouldn't be able to deliver gas at a competitive price. Its small capacity would foreclose a large export facility that would reduce the price of gas for everyone, he said.

The campaign manager for Walker's opponent, incumbent Gov. Sean Parnell, was Tom Wright, who has now returned to his job as Chenault's chief of staff.

Since his election, Walker has taken steps to shift the state's direction on the projects, drawing objections from Republican leaders with each move.

In early January, he removed three members from the board of the state corporation in charge of the gas pipeline projects. Then, last month, he replaced them with his own appointees and said he wanted to increase the scope of the plans for the ASAP project.

The idea, Walker said, is to give the state a second viable option if the oil producers pull out of the big pipeline. He said at his Monday news conference that he'd heard no objections to his plan from the state's industry partners.

"I have spoken with all the companies," Walker said, "and none of them said they felt there was any competition, that we should stand down in any way."

He added: "The only ones (who) seem to be upset about it are the sponsors of this bill."

A spokeswoman for ExxonMobil declined to comment Monday.

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But Republican leaders say Walker's new plan for the ASAP project competes with the current framework for AKLNG and undermines the state's cooperation with oil producers.

They cite an ExxonMobil statement released last month saying Walker's proposal creates "direct competition" with AKLNG, and they also say Walker has been slow to provide details to support his new ideas.

"We've asked for more information," Hawker said. "We're having a very difficult time getting any more information to give us a comfort level of what he's really got in mind."

Larry Persily, the federal government's coordinator for a North Slope gas pipeline, said in a phone interview that there's validity to the Republicans' arguments about Walker's new plan introducing uncertainty to AKLNG.

"The governor certainly has to reassure the market," said Persily, speaking from Calgary, where he was attending a natural gas conference. "There's got to be more details."

But he urged both sides to quickly work through their dispute, saying that if it persists, it could inject risk into the state's partnership with the oil producers.

"Alaska has to be careful that it is perceived as politically stable," Persily said. "No project wants to get caught in political infighting, so let's settle this, guys."

House Bill 132 would effectively block Walker's new path by stopping the Alaska Gasline Development Corp. from working on any state-sponsored pipeline project geared at exporting more than half its gas.

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The prohibition would expire either in July 2017, or if the state and the oil producers begin engineering and design work on the AKLNG project. It would also expire if one of the producers opts out.

Senate President Kevin Meyer, R-Anchorage, said the bill would pass the Senate "pretty easily."

A parallel measure could be introduced to speed passage, added Meyer, who's an employee of ConocoPhillips, one of the state's partners on the AKLNG project.

Monday's conflict over the gas pipeline projects is the second high-profile dispute between Walker and House Republicans in four days. Legislative leaders moved late last week to slow Walker's efforts to expand the Medicaid insurance program for the poor and disabled.

Walker and the sponsors of the new pipeline bill said they would continue on their respective paths.

"It's just a bill -- it's not a law," Walker said, referring to Chenault's measure. "We're not going to change anything."

The bill is on a fast track and scheduled for a committee hearing Friday afternoon. Johnson, one of the Republican sponsors, acknowledged there was "friction" with the governor, but, he added, "it doesn't mean we can't get over it."

"It's healthy. It's good. It's why we're designed this way," Johnson said. "Our forefathers were very smart in that."

Governor Walker responds to HB132 from Alaska Governor Bill Walker on Vimeo.

Nathaniel Herz

Anchorage-based independent journalist Nathaniel Herz has been a reporter in Alaska for nearly a decade, with stints at the Anchorage Daily News and Alaska Public Media. Read his newsletter, Northern Journal, at natherz.substack.com

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