By Matt Buxton

JUNEAU — Frightened by Cook Inlet gas shortages and worried by government interference in the marketplace, a lawmaker from a community that heats with energy half the cost of the Interior passed a slew of amendments that state officials say will undermine and delay the Interior Energy Project.

Rep. Mike Hawker, R-Anchorage, put forward a half-dozen amendments to House Bill 105, including one that requires additional Legislative approval for any project to bring affordable natural gas to Fairbanks. The bill was aimed at allowing the state to look beyond the North Slope for a source of gas.

The Anchorage legislator pitched the amendments out of concern that the latest attempt to salvage the already-delayed project in the wake of the over-cost North Slope route would also come up short.

“I understand the Interior of Alaska,” he said, explaining that the Carlson Center was named after his wife’s father. “I want to see the right thing done for the Interior of Alaska and not the wrong thing happen in our best efforts to do the right thing.”

But the changes and additional requirements will do anything but save the project according to some on the committee, state officials working on the project, local officials and Gov. Bill Walker.

Commerce Deputy Commissioner Fred Parady said the amendment that requires the state to seek the permission of the Legislature for any project will cause at minimum a delay of a year. He added that it poses many challenges to the Alaska Industrial Development and Export Authority’s ability to find private investors for the project.

“We’re changing horses in the middle of the stream here. Make no mistake about it, the commitment that we all share to the Interior project is substantially delayed by the amendment,” he told the committee. “The Legislature assigned AIDEA this project and this amendment is moving to handcuff us from the assignment that we were given.”

Even though the bill is seeking the Legislature’s permission to refocus the project, Hawker was critical of the lack of information about just what that refocused project would look like.

“Because we’ve had such a long discussion here about not knowing what’s involved and so many unknowns,” he said. “That’s why I would like that project plan brought back to us for approval.”

Throughout the meeting, Hawker said he was concerned the project would interfere unfairly with Anchorage utilities.

The goal of the project is to deliver natural gas to customers at $15 per thousand cubic feet of natural gas. The price for gas currently is more than $20. Anchorage, as was discussed at an earlier hearing, pays about $10.

There are no Fairbanks-area members on the House Resources Committee. Committee chair Rep. Dave Talerico, R-Healy, represents part of the Fairbanks North Star Borough and supported every one of Hawker’s amendments.

Hawker found little opposition from the committee for his changes to the bill.

Rep. Paul Seaton, R-Homer, had initially aired some concern about the project, but by the end of the meeting said he was concerned everything had gone too far.

“My concern is that we’ve got so into the restrictions on the ability for this project to go forward that I don’t think it’s going to go forward,” he said.

The two Anchorage Democrats on the committee, Reps. Geran Tarr and Andy Josephson, were also critical of the changes. Josephson said the amendments “neutered” the project, and Tarr said the changes would set the project back.

“I think what we did here today caused a lot of damage,” she said. “If I were in your seat, I would be sick to my stomach.”

Borough Mayor Luke Hopkins was in the meeting and said later, “I agree. I am from Fairbanks, and this is disgusting.”

He said it appeared to be an attempt to kill the bill and kill the project, adding that he hoped later committees have a Fairbanks presence.

“It falls to the Interior delegation,” he said. “It also falls to the community to say this is not acceptable. … It’s hurting our community and that’s not acceptable.”

The news of the amendments didn’t sit well with Walker, who met with the News-Miner editorial board via telephone after the Resources Committee meeting.

“This is a very, very high priority for me and this administration. We’re very, very concerned with this form.”
Walker made Fairbanks’ energy woes one of his top campaign priorities and said the bill, along with Medicaid expansion, are his top legislative priorities this year.

When asked whether he would make a special session for the Interior Energy Project, Walker said he will watch the next few weeks closely before making that call.

“There’s always that possibility,” he said, “but I’ll reserve that for the end of the session.”

Contact staff writer Matt Buxton at 459-7544. Follow him on Twitter: @FDNMpolitics.