NOVEMBER 5, 2015
Representing District 17:
Midtown, University, and East Anchorage
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716 W 4th Ave, Room 412
Anchorage, AK 99501
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End of the Third Special Session
Dear Friends and Neighbors,
Yesterday the House voted on and passed SB3001, the buyout of TransCanada, by a vote of 39-0. The legislation now goes to the Governor for his signature. The third special session lasted 12 days and featured numerous presentations from the Governor’s cabinet, industry representatives, and state experts. In the end, both the House and the Senate agreed to the Governor’s request for $160 million to increase Alaska’s ownership of the AKLNG project.
Apart from the $68 million that will go to TransCanada to buyout their portion of the project the remaining $92 million will be divided amongst various departments in order to move the project forward. Some of those allocations include:
- The Department of Natural Resources (DNR) will receive $1,849,500 for administration and support services, North Slope gas commercialization, for a marketing lead position, a marketing analyst position, work related to Federal Energy Regulatory Commission resource reporting reviews and drafting, facilities review for commercial aspects, commercial analysis and support, and audits associated with the termination of the agreement with TransCanada Alaska Midstream Limited Partnership.
- The Department of Revenue will receive $1,045,500 for administration and support services, natural gas commercialization, personal services for work on financial analysis, project financing, governance, and the revenue aspects of revenue and taxes.
- The Department of Law will receive $10,100,000 for contractual services with law firms to assist DNR in drafting and reviewing contracts related to the Alaska LNG project and to provide legal and regulatory support for state participation in the Alaska LNG project.
The remainder, about $79,000,000, is essentially a “cash call” for our share of continuing to advance the AKLNG gas line. Please note that each of the three major oil companies will be sharing a similar amount.
I voted “Yes” on SB3001 because I believe that it creates a better deal for Alaska. If TransCanada had stayed with the project we would have had to pay them back for any money that they were to spend plus 7% interest. The State is able to get interest rates much lower than that. This is also the only remaining time that the State of Alaska could cleanly end its agreement with TransCanada (called a “clean off-ramp”). With TransCanada out of the way, Alaska will now be on equal footing with our other partners. This will help protect our sovereignty as the owners of the resource and ensure the benefits of a pipeline are shared by all Alaskans. In the end I believe it was just too good of a deal to pass up and I am thankful that my colleagues in the House and Senate came to the same conclusion.
To make this point further, some of our experts believe that we could reap $360 million more per year over the life of the gas line, if we buy out TransCanada—which we just did. This could amount to over $10 billion over the life of the time.
As always, please call or email with any thoughts, ideas, or concerns.
I Answer to You!
Representative Andy Josephson
Anchorage LIO Room 412