Alaska
Robert Seitz: Energy bills of the 33rd Legislature didn't address long-term plan for Railbelt
By ROBERT SEITZ
I was excited the Alaska Legislature engaged in efforts to encourage production of Cook Inlet gas.
I was, however, very disappointed when a legislator could not move forward a bill to reduce royalty payments on Cook Inlet gas because he could find no certainty it would work to increase production.
This much is clear: It can’t work if not passed. Whether or not it would work is not the point, but that it might work is worth a try.
Southcentral Alaska is desperate for increased production of Cook Inlet gas. I’m not sure what the other Cook Inlet gas bills that died would have done, had they passed, but I will do more research to understand the driving force behind the reluctance to get on board for energy security in Alaska.
Carbon sequestration is something possibly useful for gasification of coal or some other energy process, so it could be a beneficial tool for our state’s energy tool box. Simply storing someone else’s CO2 does not excite me, but if it can bring in some money while we figure out just what our energy policy needs to be — green or hydrocarbon — it’s worth a try.
House Bill 307 was greatly modified from the original submission on Feb. 2, especially modified on the last day of session, May 15. I remain concerned much of the text may contain hidden landmines that could be used to deviate from the original intent and force more renewable sources to the system, even if the system is not ready for more variable sources.
The ERO (Electrical Reliability Organization) and the RTO (Railbelt Transmission Organization) discussed in H.B. 307 seem patterned after similar organizations in other states for the sole purpose of forcing wind and solar expansion to local utilities. We could have done better in Alaska to plan for altering our electrical power system to match the severity of our winters, thus ensuring we all survive the cold and dark.
Long-term planning with step-by-step engineering is needed for the long-duration energy storage necessary, and to make sure we have the means to capture excess variable energy produced, so we have it when we need it most. Mandating is not the solution.
I am also concerned that with H.B. 307, additional power generation from hydrocarbon fuel could be denied and there is no provision or recommendation for planning for the Railbelt system.
As I have been stating for eight years, for wind and solar distributed resources to be successful, we need energy storage means, such as pumped hydro, which would allow all excess solar and wind generation to be captured for use during the cold and dark months.
I was certain that the Railbelt Transmission Organization would not be fully implemented until the new transmission line was designed and being installed. It may be quite difficult to identify portions of the system which are transmission line within some of the utilities and for them to be given over to the RTO.
The key to the healthy growth of the Railbelt power system is continued production of Cook Inlet gas, which will provide time for the development of whatever wind and solar might be added, inclusion of pumped hydro or other energy storage and any other less variable sources such as geo thermal or Cook Inlet tidal. One major goal is to develop our system to produce more and cheaper energy to support refining processes for the ore produced in Alaska, so we can build whatever our future economy will be driven by.
The Alaska Sustainable Energy Conference is this week. I look forward to hearing more about viable solutions to Alaska’s energy needs.
My next commentary will address the claim that Alaska is warming two to four times faster than the rest of the planet. It doesn’t feel like it to me, so I dug into the data.
Robert Seitz is a professionally licensed electrical engineer and lifelong Alaskan.
Alaska
Anchorage celebrates Juneteenth with 3-day community event downtown
Anchorage is commemorating Juneteenth with dancing, music and celebrations of Black excellence and culture this weekend.
The citywide Juneteenth celebration also includes opportunities for education, community gathering and reflection, and features vendors and guest speakers. The event kicked off Friday and continues from 1 to 6 p.m. Saturday and Sunday on the Delaney Park Strip.
Tragil Wade, an entrepreneur, author and inspirational speaker who is the big sister of former NBA great Dwyane Wade, was Friday’s special guest.
Saturday’s festivities, spotlighting the theme “Community and Culture,” kicked off with a freedom rally and parade. Saturday also features a youth segment, hip-hop dancing, community line dancing, multiple DJs and a performance from Soul Society.
“Faith and Family” is the theme for Sunday’s festivities. There will be a special Father’s Day opening at 1 p.m., a praise cardio session on the grass and an HBCU gospel segment. The afternoon will close with a community praise dance.
Juneteenth commemorates the day that the last slaves in the Confederacy were informed of their freedom following the Emancipation Proclamation on June 19, 1865. Long celebrated by Black Americans, Juneteenth became a federal holiday in 2021. In 2023, the Anchorage Assembly made Juneteenth an official city holiday, and in 2024, the Alaska Legislature passed a bill to designate Juneteenth as a state holiday.
Alaska
Pilot dies in small plane crash southeast of Cordova
A pilot was killed in a plane crash in mountainous terrain near Cordova, Alaska State Troopers said Friday.
The agency was notified of the overdue Piper Pacer around 8 p.m. Thursday, troopers said in an online post. The pilot was believed to be the sole person on board the aircraft, which was thought to be flying between Yakutat and Fairbanks, troopers said.
Aircraft from the Alaska Air National Guard and Alaska Wildlife Troopers started searching for the plane, and a Guard helicopter crew found the overdue Piper Pacer around 4 p.m. Friday where it had crashed near Kanak Island, about 40 miles southeast of Cordova, troopers said.
The pilot, whom troopers did not identify, was found dead in the crashed plane, troopers said. His body was take to the State Medical Examiner Office in Anchorage for autopsy and positive identification, according to troopers.
Troopers said the pilot’s next of kin and the National Transportation Safety Board were notified.
Alaska
It’s the Alaska Legislature’s last day in special session. Here’s the latest.
The Alaska Senate plans to vote today on a new draft of a bill that would reduce taxes on the Alaska LNG project. It’s the last day of a special session Gov. Mike Dunleavy called to consider the issue.
Dunleavy and pipeline developer Glenfarne, which owns a 75% stake in the project, say a measure replacing a 2% annual property tax with a much smaller tax on gas throughput is essential to allowing the project to attract investors and court lenders. Dunleavy and Glenfarne applauded the version of the bill that passed the House a week ago.
The Alaska LNG project, estimated by the developer to cost up to $54.5 billion, includes an 807-mile pipeline, a conditioning facility on the North Slope to remove gas impurities such as carbon dioxide, and a liquefaction plant on the shores of Cook Inlet to export the gas to Asia. The project would be split into two phases: first, a shorter in-state pipeline to provide gas to Alaskans, and then the much more expensive — and much more lucrative — export infrastructure.
The Senate’s new draft retains many of the House’s provisions with some important changes.
Perhaps the most significant changes are to the project’s timeline: to be eligible for tax relief, the developer must commit to a final investment decision for the first phase by Jan. 1, 2028, and construction of the in-state pipeline would need to be complete by the end of 2032.
The House’s version required only that construction begin by Jan. 1, 2032.
The faster timeline is an effort to address Southcentral’s looming shortage of natural gas, said Sen. Bert Stedman, a Sitka Republican and a co-chair of the Senate Finance Committee. The Department of Natural Resources’ production forecast envisions demand outstripping Cook Inlet gas production by 2032, requiring producers to dip into storage.
“There’s been a lot of concern out of the Railbelt with the declining volume in Cook Inlet,” Stedman said.
But the more aggressive timeline sparked concerns from minority Republicans on the committee; it increases the risk on an already risky, marginal project, they said.
“That’s very damaging,” said Sen. Mike Cronk, a Tok Republican and the Senate minority leader. “There’s so many factors that we don’t control.”
Putting a “hard construction date” in the bill may be a “poison pill,” Cronk said.
Glenfarne and Gov. Mike Dunleavy did not immediately respond to requests for comment on the new version of the bill.
Stedman suggested future legislatures could revise the date to account for “unforeseen black swan events.”
“We can change these and modify these going forward,” Stedman said. “This is not in the Constitution, so I think there’d be some consideration under good faith trying to get the project constructed.”
The tax rate at the heart of the bill — the so-called alternative volumetric tax on gas flowing through the pipeline from the North Slope to Southcentral Alaska — would be fixed, rather than a weighted average tied to the cost of each component of the project.
The Senate draft sets the tax initially at 6.2 cents per 1,000 cubic feet of gas throughput, starting five years after gas begins to flow through the pipeline. The tax would take effect sooner if throughput reaches 500 million cubic feet per day, which is more than double what Southcentral Alaska uses now.
The tax would rise to 10.6 cents per 1,000 cubic feet once Phase 2 of the project, which includes the liquefied natural gas export facility, is up and running. The tax revenue from that mirrors what the Department of Revenue estimates the weighted tax that passed the House would yield.
The rates would rise between 1% and 3% each year, depending on inflation.
The House backed 30-plus years of tax breaks. Some senators were skeptical of that, so their version doubles the tax rate ten years after exports begin, then doubles them again in 2060.
The new bill retains key conditions for the tax relief included in the House’s version: the developer must commit to building a spur line to Fairbanks and negotiate project labor agreements with unions. It also includes up to $80 million in community impact funding for municipalities: $40 million due shortly after the final investment decision for each project phase.
It also includes House-passed price controls on in-state gas. Utilities would pay no more than $16 per million British thermal units, adjusted for inflation. That’s roughly $16.60 per 1,000 cubic feet, substantially higher than current Southcentral gas rates — about $10 — but likely cheaper than imported gas, according to Southcentral’s gas utility.
Also notable is an omission from the bill. It does not include a measure that had been under discussion that would subject large so-called S corporations and other pass-through entities in the oil and gas business, like LLCs, to the state’s corporate income tax.
Glenfarne, in its only comments so far on the new bill, urged lawmakers not to include that tax in the final version.
“If the Senate passes a bill with the proposed S Corp tax, it will introduce major hurdles for Alaska LNG to secure the right financing to build the project,” the company said in a statement provided by spokesperson Tim Fitzpatrick.
Senators are due to amend the bill and take a final vote later today.
The special session expires at midnight tonight, but Gov. Mike Dunleavy has already signed a proclamation calling another special session to begin Saturday.
Asked whether the new special session represented a contingency plan in an event the bill failed to pass, Dunleavy spokesperson Jeff Turner declined to say.
“We will see what happens,” Turner said.
This is a developing story. Check back for updates.
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