Alaska Legislature: Alaska Gasline Caucus, 8/6/26, 9am

Good morning, everyone. Welcome to the Alaska Gas Line Caucus. I'm Representative Mia Costello, a co-chair of the caucus, and With me this morning is Senator George Rauscher. He's also a co-chair.

I wanted to go over a few things before we get started. I want to thank the panelists who made time out of your day, who are here in person and also online, to talk about how gas will affect Alaska. This is a listening session for the public, and we will not be fielding questions, so you, you have around 5 minutes to to share with the public what you think are the most important things related to this issue for Alaska. So we're really happy to have this opportunity. I would like to thank a few folks, James Brock, Annalisa Roberts, Amanda Bowman, Cassandra Day, Dana Nichols, Ian Trembly, and Tristan Williams for helping put this together and make it a possibility.

And with that, I wanted to pass it off to my co-chair. One more item. I want to mention the legislators who are here to participate and listen. We have Senator Kaufman, Senator Tilton, Representative Colon, Representative Galvin, Representative Holland, Representative McCabe, Representative Mears, Representative St. Clair, Representative Vance, and Representative Delana Johnson. And on Teams we have Senator Kawasaki, Senator Myers, Representative Foster, Representative Kopp, Representative Prox, and Representative Stapp.

And if more legislators join us, I will recognize you because we really appreciate all of the work that the legislature has put into this effort so far. And with that, I'd like to pass it off to my co-chair, Senator Rauscher, who is going to be introducing a video from the governor. Thank you very much, Representative Costello. I appreciate everybody being here. As you know, we've had great support from the federal administration, Interior Secretary Doug Burgum.

We've had Secretary of Energy Chris Wright. We've had our congressional team, U.S. Senator Sullivan, Congressman Nick Begich. We've had none other than the governor of the state of Alaska, Governor of the state of Alaska has done a lot of work to advance this project, and he is actually going to be our opening video. So right now I'd like to introduce Governor Mike Dunleavy.

I want to thank the Legislative Gas Line Caucus for really focusing on this incredibly important issue. For years, we've known that our gas supply in Cook Inlet has been depleting rapidly. Last winter, we had a long, tough winter, especially in Fairbanks. We also had a very cold March. This really impacted the supply of gas that we have left in Cook Inlet.

The sirens, the bells, the whistles, they've been going off for some time, but now we have a tremendous opportunity to secure long-term energy security with long-term gas through the Alaska Natural Gas Line Project. If we get working on that ASAP, if we can get this bill passed that needs to be passed regarding property tax and the gas line, we will become, in my opinion, the center of the world, the focus of the world for this massive gas line project. Estimated time to complete the project if we were to start today would be roughly 3 years before gas is flowing overseas, a shorter time before gas is flowing here in Alaska, which we need for our residents our businesses, our schools, our hospitals, and our military bases. I don't think anyone disagrees. We need to get this bill going.

We need to get this project going. So let's just do it. Let's stop talking about it. Let's get the bill passed in this last special session. Let's move Alaska forward and let's end up being the envy of the world for being able to get our act together on gas, be able to pass this bill as soon as possible, get things moving as soon as possible and put this uncertainty of gas scarcity behind us.

So I want to thank the caucus for what it's doing. Keep up the good work. We're going to get there with your help. Thank you.

Thank you, Senator Rauscher, for playing the video from the governor. I also wanted to mention that we have Representative Robin Freer, who's on Teams, participating that that way in the meeting. So with that, I wanted to get started. Again, this is a listening session, so it's a little bit different than normal where you will have an opportunity as panelists to present your views of the gas and the opportunities that it provides the state of Alaska, and really who you're speaking to today is the public, to help educate the public as we move forward with this really critical project. And so the way today will be run is that I will introduce the next panelist, and then Senator Rauscher will follow up with the, with the next panelist.

At some point, we may take a 5 to 10 minute break because we do have many individuals who are willing to participate. Some of our panelists are on Teams, and so we are asking that you mute yourself if you're on Teams until you are being asked to present. So with that, I would like to introduce one of our panelists, Mayor Edna DeVries from the Mat-Su Borough. Welcome, we really appreciate you being here. Thank you.

It's such a pleasure to see you, and I really don't think you need any further introduction, but please welcome to make your statement about the gas project and what impact it will have for Alaska and your constituents also. Thank you. Thank you, and thank you for inviting me.

I don't think there's anybody probably in the world or in the state of Alaska doesn't realize that we need energy. And things are going very well in the borough, as most of you all know. We are the fastest growing area in the state. Our port is just bursting at the seams with activities, as well as many parts of our state in our borough that had not been lived in. Now people are finding places to build.

But also, the fact is that we need gas. Gas is not only important for our constituents, but also for industry. I can't tell you how many people we have that are interested in locating in the port area or in other parts of our borough, but energy is a thing that keeps them away. And so when I was glancing first at what the panel was going to do, and the one thing it said was that I was to represent my industry, and I thought about that. I've been a real estate broker for 30-plus years, a post-secondary education instructor in accounting for 15-plus years, and things like that.

And of course, I could certainly say government is my industry. But as I prayed and thought more about it, I realized that my industry is people. And I believe everybody that's here on this panel, as well as those that are serving— excuse me— are serving as elected officials realize, and hopefully realize, that that is their industry. Our industry is people. How do we care for these people?

How do we provide for them? How do we be sure that they can be warm this winter or even 3 years from now? And so that challenge, I think, lays before us as not only in the Mat-Su Borough, but throughout the state. And so in Phase 1, we are dealing with our people, our people, not only in the Mat-Su Borough, but also in the state of Alaska. And even though the pipeline maybe doesn't run through many parts of the state, The parts, all the parts in the state are affected by it.

Whether it's the money that's going into the state coffers or whether it is the energy that is heating our hospital where people from all over the state come to. So the energy is touching everybody. It is just not touching the Matsu borough where 22% of the pipeline is going be located. So I just encourage everybody that can push on getting this energy coming and encouraging— think about the fact that it is a people and you are representing the people as I am representing the people. And those people are crying for energy.

Not only for their businesses but also for their homes and their families. I would like to see, as the Governor said, let's get this Dun. All right, well, thank you very much, uh, Mayor DeVries. We appreciate your, your comments there. So right now I'd like to, uh, take a moment and go to Mayor, uh, Peter Machicki.

He's, uh, from the Kenai Peninsula Borough. He is on Teams. We see your face, Peter. Go ahead.

Are you unmuted?

That was my first question, is can you hear me? Yes, we can hear you.

Good morning, everyone. Thanks for putting this together today. I think it's great to have a listening session on a very important subject to all of us. I represent the home of every molecule of natural gas that you appreciate today in Southcentral Alaska. We were blessed to find natural gas and oil in Swanson River in 1957, and today from Swanson River to Beluga, all in the Kenai Peninsula Borough, we are— our employees are working hard with support through the Kenai Peninsula Borough and all of you to provide the natural gas that we've enjoyed for so long.

Many spin-off industries over the years. So when you think about why gas is important to us, about half of our geographic region of Kenai Peninsula Borough still does not enjoy natural gas energy, but they receive the benefits in electrical generation that is primarily powered through natural gas. So for those that don't understand the significance, it's everything for Southcentral, and a lot of the energy outside of Southcentral is also generated through natural gas.

Um, you've noticed through the years as majors have left out of this region, it's a challenging region to produce. Um, it's a tiny market, which is also a challenge when you think about investing big in Cook Inlet when there have been large discoveries like the Tyonic, um, formation that provided to the Kenai LNG plant and much of the electrical generation and home heating in the area for years. Um, that is largely depleted, but I've got to say, we, we have to take our hats off to the two producers that are really keeping the lights on. Without Hilcorp and HEX, we would have had a very rough winter last year. Folks remember the rolling blackouts in 2008-09.

Hilcorp came along, picked up A lot of old marathons. Wells has invested heavily. More recently, Hex has invested heavily.

Important thing to focus on is continuing to support those current producers. There is gas in Cook Inlet. We will depend on it for years. The gap is tiny. We need to look at interim solutions as we work on the AK LNG project.

We have to focus on low-cost, affordable energy. I'm worried about the divorced phases of AK LNG, and I encourage you to move— keep the pressure on for those phases to become one as soon as possible. Early gas will be expensive. That's going to be a challenge. What you find is the price becomes one So even locally produced gas would likely be at that same rate.

Reach out to people that have the experience in the industry and work together on a deal. I believe in segmenting a deal to not hurt communities. As things jumped and future revenue goes to somewhere else, keep in mind the, the communities that are impacted. And work with them to protect them. The House version of that bill did just that, and I appreciate that.

Um, but this is about gas. All I ask, let's focus on interim plans. Imports for the short term will be a requirement. Let's look at the lowest cost option to cover that gap in the meantime. And don't panic.

Navigate carefully. Make sure you do no harm. Consult with the experts that know the industry here locally.

And keep the pressure on for something that does result in what's best for Alaskans. When we are panicked, and I've seen that happen in Juneau through the years, we make mistakes. So I appreciate those that supported a lean bill.

That where we can come back and look at options 10 years down the road, depending on the success of the project. Um, and we were more than willing to deal with something, whether or not— and remember, 43% of the value of this project is in the Kenai Peninsula Borough. We will navigate, negotiate a similar deal to what you had in the House version of the bill. Either way. So keep that in mind.

Local communities are more than willing to work with this project in order for it to be successful. However, we still have our eye on the ball to make sure that energy remains affordable for Alaskans, and I hope you do the same. So 5 minutes isn't a lot of time. I didn't get into a lot of the detail that I typically do, but Kenai— people of the Kenai Peninsula Borough are ready, willing, capable, enable to support this project going forward. Kenai Peninsula Borough government is in that same boat.

It is a huge employer in our, um, the current industry is a huge employer in Kenai Peninsula Borough, and AK LNG would be as well. Let's work together, make sure we do no harm, deliver a fair deal, and get things moving so that we can, uh, kind of shake this fog of where we go in the future on reliable, affordable energy supplies for Alaskans in the future. And with that, thanks for putting this together today. It's good to see old friends at the desk, and I'm always available if I can help. So thank you.

Thank you very much, Mayor Machickie. It's been great to have you here today and also serve with you in the Senate. Appreciate your service. Next, we are going to be joined by the Vice President of Hilcorp, Luke Sargey, and if you could please provide your comments to the panel. Thank you.

Yeah, good morning. My name is Luke Sargey. I'm the Senior Vice President for Hilcorp Alaska. I want to thank the Gas Line Caucus for putting this together. Thank you for doing it, and thank you for inviting us to participate.

Hillcorp is the largest producer of Cook Inlet natural gas, and we're also the largest operator on the North Slope. Uh, we are the operator of all of the fields that are expected to provide gas for the Alaska LNG Project, most notably Prudhoe Bay and Point Thompson. And so as the operator, we're responsible for managing the development of those fields, all of the drilling, uh, the investment in facilities and, uh, flow lines and producing and ultimately delivering that gas to the pipeline. Hilcorp, of course, strongly supports bringing this North Slope gas to market, right? And we've worked extensively with Glenfarm, with 8 Star Alaska, with AGDC, the state legislature, and of course our partners in industry on the North Slope to advance a commercially viable project.

And I've testified previously that, you know, Hilcorp has signed a Phase 1 gas sale precedent agreement for gas that we have complete control over at the North Star field, and we continue to work with Glenstar on a gas sale precedent agreement for Point Thompson and on a binding gas sales agreement for NorthStar Gas. We are prepared to be the anchor gas supplier for the project. We think this Alaska LNG project is just an incredible opportunity to create really important economic activity in the state of Alaska, to, of course, monetize, commercialize stranded North Slope gas resources and to bring long-term energy security to south-central Alaska.

So, something that we think is important to address, recent headlines have suggested that our position at Hilcorp, that we oppose this targeted income tax on Hilcorp, is against gas line development. And that's simply not true. The July 23rd letter that I sent to the legislature explains our position, and it kind of gets into the consequences of what that targeted Hilcorp income tax would cause to happen.

You know, the concept that you can separate gas line development from the, you know, kind of financial well-being and stability of the upstream producers doesn't make any sense. If there is a targeted tax on Hilcorp, that will directly increase the cost of the project by increasing the cost of the gas that is sold into that pipeline. So again, pairing, pairing a tax break that is favorable to the project on one hand with an extra tax that is detrimental to the project, on the other hand, we think is really counterproductive. As I said, Hilcorp is in the midst of negotiating long-term pricing and supply agreements with Glenfarm, and, you know, the uncertainty around a potential targeted income tax makes that very difficult. It makes it hard for us to get comfortable with what our position is going to be and enter into binding commercial agreements.

Uh, you know, I, I certainly agree with the comments that, uh, the mayor's made just now on the need for additional energy security for Southcentral Alaska. Hilcorp provides most of the gas for Southcentral. Most of those contracts— most of that gas is provided under long-term contracts, but as I think everyone is aware, those contracts are rolling off over time. That was, uh, always intended to be the case because, uh, simply put, the Cook Inlet Basin is very mature. So Hilcorp is going to deliver on the volumes that we have contracted for, and we're working hard to bring additional gas to market.

We sold a little bit of additional gas to Matanuska Electric last year. We sold a little bit of additional gas to Enstar this year. But make no mistake, and I'm sure that Mr. Sims will reference this, we are getting dangerously close to not having enough gas to go around. And I think the utilities will affirm that they are expecting shortages here in the near term. You know, all that despite the fact that Hilcorp invests $400 to $500 million a year in ensuring that we are bringing Cook Inlet gas to market.

This year we'll be drilling 28 wells in the Cook Inlet. That's the, uh, this is the busiest drilling and construction season we've had in years. But look, it remains a mature basin, uh, and it is in long-term decline. And I can see Mr. Hendricks fuming a little bit, so I want to make clear that the Kitchen Lights unit is a great field. And will be successfully developed by Hex.

We're, we're big fans there, but I don't think it's realistic to say that that one field can supply all of the needs over the next 5 years.

So I'll wrap up, and in closing, just say that of course Hilcorp supports the Alaska LNG project, and we're going to continue investing in the Cook Inlet to make sure that Alaska has the gas that we need during the transition. But Alaska needs a durable, long-term solution, and that solution is North Slope gas. The future of gas for south-central Alaska lies on the North Slope. We would like to see any legislation strengthen the project economics for the gas line and provide fiscal certainty as well as near-term energy security for all of the parties involved. So thank you for the time, and that's what I've got.

All right. Thank you. Thank you, Mr. Sage, the senior vice president of Hilcorp. So now we'd like to go to Matthew Kissinger, Alaska Gas Development Corporation. Mr. Kissinger, please go ahead.

Thank you. And thank you for having this panel. I'm going to try and achieve a lot in these 5 minutes. One of the benefits, or the silver linings, to have this tax bill go through now its third special session is that more and more Alaskans are paying attention. And hopefully a lot of those Alaskans are tuned in today.

So I'm going to start at a high level and just remind people what exactly this project is. I'm going to quickly talk about why we phased it, AGDC actually phased this project. And then address why the property taxes need to be dealt with. So what is the project? It's a mega project, but it's actually 3 mega projects in one.

There's a gas treatment plant on the North Slope. There's a pipeline to bring the North Slope gas down to south-central Alaska. And then the liquefied natural gas facility in Mayor Machickie's backyard there in Nikiski. The gas treatment plant is there because the gas as it comes out of the reservoir, especially Prudhoe Bay, has a lot of carbon dioxide in it. It's just free-flowing carbon dioxide, and that has to be removed in order to sell to the utilities.

It needs to go down to around 2 to 3%. It comes out of the ground at about 13%. And in order to liquefy it, you have to pretty much get all of it out, because when you liquefy natural gas, you take it down to the incredibly low temperature of -263°F. And when you do that, the gas turns into a liquid. Methane, ethane turns into a liquid.

But carbon dioxide turns into an ice. And so this is a technical issue. It's not about 45Q credits. It's not about anything else. Those do help.

Those are helping us to remove a barrier to the project because this is a, you know, multibillion-dollar facility up on the North Slope. Just to take the gas as it comes out of the ground and turn it into something usable. The next thing, of course, is the pipeline. It's a 42-inch pipeline. There's a misnomer out there, this belief that, oh, if we just built a really small pipeline, that would solve it.

Here's what I'd like to say to that. About 10% of the cost of the pipeline is actually pipe. The other 90% is moving dirt, moving people, and moving that pipe around. Now, of course, you get economies of scale as you go down to smaller pipeline size, but it is not the, uh, be-all and end-all. And so 42 inches is an optimized size for us to be able to serve Alaskans, but also to export, which is what achieves the low prices, uh, that I believe Mr. Sims will talk about in the future.

Um, you won't get there with a smaller pipeline. Furthermore, this pipeline's permitted, meaning we can move quickly. And then finally, you have the LNG facility. The LNG facility is basically a refrigeration facility, a very expensive one. That's the most expensive part of this project, not the pipeline.

So the— so you want that in a place where people can maintain it, people can go to work and go home at night, and that's why Nakiski is such an ideal place for that LNG facility. Now, why is it phased? It's phased simply because as we saw the looming gas shortage out of Cook Inlet coming, the governor came to us at AGDC and said, "Is there anything that you can do to try and accelerate the pipeline?" And that's where the phasing came. We realized that the math, you know, 10, 15 years ago didn't support building the pipeline just based on Alaskan demand because we were trying to beat $8 to $9 gas out of Cook Inlet. Gas out of Cook Inlet is coming into the $16 realm now, and it's, and it's going up.

And imported LNG will be very expensive and very unpredictable. If you're buying it today, it's over $20 just for the LNG. You've got to move it to Alaska and you have to regasify it, meaning you're going to add around $7 more to that. And that is, that is a volatile price as you go through different geopolitical events around the world, you can see that spiking. We can't absorb those kinds of price spikes in Alaska.

We need stable and secure energy supply with predictable pricing, and that's what the pipeline achieves. Uh, we always hope that phasing it is just a mathematical exercise though. We want to underpin the pipeline so that we can kick off construction early and get moving on it so it's there to help us as we, as we get through this gas shortage in Cook Inlet.

But ultimately, once you get the LNG facility built, the price for Alaskans drops considerably from what we consider the phase 1 price. And we are working very hard. I've—. Both Adam and I just came back from Taiwan this week where we're moving very quickly on gas sales agreements to Taiwan as well as other countries. That volume of gas that we export, by sending that through the pipeline, it dilutes the price for Alaskans.

And that's really the end goal here, is to get that export done so that we can start paying in the, the low single digits, lower than we've ever really paid out of Cook Inlet even. Now, why address the property taxes? Well, this project, it is economic, but it's a huge, huge endeavor. And it needs to be optimized, and it needs all the barriers taken away that we can collectively take away from this project. Property taxes were identified as a barrier to this project long, long ago.

If you go back through the historical record from the Alaska Gas— Stranded Gas Development Act and on, property taxes have always loomed as something that have to be addressed. Under the current statutes, this project would have to kick out an extra billion dollars a year to service those property taxes. Now, it's an economic project, but it's not economic enough to kick out an extra billion dollars a year. So this was never a question of, are we giving up a billion dollars? There is no billion dollars because the pipeline just doesn't get built unless we get these barriers out of the way.

And so that's what doing the alternative volumetric tax does for the project. I think that's all I have.

Well, thank you very much, Mr. Kissinger. So, just for reference sake, online we have Senator Kawasaki, Representative Kopp, Representative Fryer, Representative Sadler, Representative Tomaszewski, Representative Moore, and Representative Underwood. Right now, we'd like to go to— and I would thank you, Matt, for being here. Appreciate it. So Matt Easley, CEO of Pantheon, is going to speak next.

Mr. Easley. Yes, good morning, everyone. So I'm Max Easley, CEO of Pantheon Great Bear. For those unfamiliar, it's a large leaseholding just south of Prudhoe. So as you can tell, my background— I'm in Houston today.

And I represent Pethian Great Bear, but also a perspective of smaller developers in Alaska. But really, I'm in front of everyone today as an Alaskan first. For those who don't know me, I'm about as Alaska as it gets. My parents moved to Alaska in 1962. My father was in the construction industry.

He's actually a commissioner in the Egan administration, and my mother retired as a math professor at UAA. So I'm native-born Alaskan. West High graduate, also a graduate of UAF, learned my trade at Prudhoe Bay, and what a fantastic time that was. Four corners of the earth since, traveling the world. Not long ago, I was CEO of BP Alaska before Luke and the team took over the asset and done a great job, by the way.

And please don't think poorly of me, but most recently I was developing a BCF a day of gas for Alaska's prime competitor LNG Canada on behalf of PetroNas. But I joined Pantheon Great Bear a little over a year ago for a reason. As an Alaskan, there's two things Alaskans have wanted since Prudhoe Bay started decline 36 years ago. One is a gas line, and that's the prime thing we're talking about today. But the other one is equally important, which is competition on the North Slope.

And we're on the cusp of both. Clearly Pantheon represents the second of those, competition on North Slope, but my goodness, it's hugely enabled by the first. So under Pantheon's acreage, there's independently verified 7 TCF of gas and 1.6 billion barrels of liquids. Pantheon Great Bear was the first company to sign a gas sales precedent agreement with the state for the $1 gas price. For the— our reservoirs and reservoirs in our neighborhood, there's really no reservoir benefit to injecting gas.

It's just the cost. So to do our part, we've offered that gas for a dollar to get the lowest possible price to Alaska consumers and doing our part. This is not just about Pantheon. There's lots of others that are poised at the moment. Everyone is delighted to see Santos be successful.

As a new competitor on the lower slope with Pika. And we're all looking excitingly for that to hit 80,000 barrel day plateau. Santos is now the second largest leaseholder in the state. They have a lot more to do. To our northeast, you have Apache and Armstrong with Lanyap.

If you go west from us, immediately adjacent to our mega Kodiak field, you have Repsol. A little further, you have Shell and Repsol. Small companies, 88 Energy and Burgundy, in our neighborhood. There's a lot of competition about to happen. Hilcorp and ConocoPhillips are phenomenal operators, as BP and ARCO were before them.

But competition makes business better. It makes operators better. It makes the supply sector better. The ultimate winner in all of that is the resource owner, the state of Alaska. So when you think of the gas line, don't just think about short-term jobs, property taxes, production taxes on Prudhoe gas.

This is about competition and value creation on the North Slope. When I started my career at BP 36 years ago, when it came on— when it went on decline, not my fault— we were producing 2.1 million barrels a day into the pipeline. We had to put drag reducer in the line to stuff all the oil in it. As we see here today, it's a very, very small fraction of that. So I would encourage all Alaskans to welcome and support this project.

And the benefits are far, far greater than the headline things you hear about in terms of taxes and property taxes. This is a renaissance of development that's just poised to happen, and competition is good. So gas line plus competition really equals prosperity and growth, and we've been waiting 36 years for this to happen. I think the time has come, and I'd love to do my part to get back to my home state. Thank you very much.

Well, thank you very much, Max, and maybe I'll see you at the next West High reunion. Yeah, well, one thing I would add at the very end, that the co-chair Costello and I have something in common, which is not only are we classmates, but at the same time we're both multiple state champions. So it's good to be in the same room with you again, Mia. Thanks, Max. Um, I also wanted to mention that Representative Garrett Nelson has joined us and been listening for quite some time.

And again, I want to thank the legislators who put so much time and effort into this issue for being here in person and online today. Next, we have John Hendricks with Hex, who will be sharing with the public about his company and what he brings to Alaska. John. Thank you. You hear me okay?

All right. A little bit about Hex. First, I'd like to thank the panel for investing— for investing in us, but Basically having an oil and gas company at the panel. Generally oil and gas companies aren't invited to the panel on gas. And as Alaska's only oil and gas producer, thank you for listening.

I know it takes a lot of courage sometimes to bring an oil and gas producer in a room. Um, but our company is family owned. I grew up in Homer, Alaska, graduated high school in 1975, went to the Lower 48 on a wrestling scholarship at the University of Tennessee. Came back and worked for Schlumberger on the slope as their first college hire, logging wells. I was there in 1988 with BP when we hit our production of 2 million barrels a day.

Max and I worked as PEs for BP. But, you know, after— and my mom still lives in Homer. She just had her 93rd birthday this last month. And so after— so hopefully I'll be around. I have a little bit of her genes.

You'll have to put up with me a little longer. So, uh, after going around the globe, I went to every continent except Antarctica, maximizing production in fields. And I think that's a lot of opportunities here. Alaskans must understand there are two major basins here. One was the founding basin, was Cook Inlet, and the other is the basin on the North Slope.

We can see how North Slope Basin has developed. I still believe there's a lot of opportunities there. I want to say I've always been a supporter of Phase 1, Phase 2, a complete LNG economic facility. That's what it has to have. And I also believe we must have a management of change, using BP lingo, basically to understand the impacts and how we move forward and transition and blend what already has produced for 60 years for Alaskans at gas that's the 11th cheapest in our country.

So thank you again for inviting HEX to participate. We currently also prove— we got the 151 Spartan rig on our jackup right on our platform right now drilling. It just TD'd the surface down to 3,500. We're running casing on well number 10— or number 7. We will be moving over to number 10 after that, hopefully.

But we're the two— the only two people drilling offshore in Cook Inlet is Hilcorp and myself, and we're doing it working together. And we basically have 10%— we're the second largest oil and gas operator in Alaska. Or gas operator, sorry, not oil and gas, but gas producer in the Cook Inlet. And we doubled production last year. Doubled production.

We've also committed fixed gas going from 8.1 million a day to 26 million standard cubic feet a day. It's fixed gas to Alaskans next year. More than 3 times what we're committing this year. How many other companies have done that? How many other Alaskans put $50 million into Cook Inlet Gas?

We're Alaskan-owned, family-owned, everything I make stays in the state. We're Alaskans through and through. We named our platform after my granddaughter, Allegra Lee. So that was a commitment there. And she's our fourth generation.

But I think the other message is along the way, since we are— I've worked Prudhoe Bay and like I said, Cook Inlet now, and I have more experience on the North Slope. But Alaska has to— has a choice coming up on its future energy. And it's really mean— the message today is simply don't walk away from Cook Inlet. You know, it must be a part of the conversation going forward. Cook Inlet has proven it's working critical infrastructure, and it needs to be deemed critical infrastructure during these critical times of transition, delivering natural gas to Alaskans right now.

It is why we have the 11th cheapest per EIA data, which is federal, at the cost of homes in the nation has done that for over 60 years. Cost to you at your home, not Henry Hub price versus Alaska Hub. And the debate isn't whether Cook Inlet works, it's whether we keep investing in it or replace it or something more expensive and less certain. We must have a runway to continue to spend money. We must do that.

Transitioning and blending is important. The Cook Inlet infrastructure is critical to Alaskans. Let's start with what we already have without a single new pipeline. Cook Inlet is the lowest cost, lowest risk natural gas available in Southcentral. It's proven.

It meets Alaska's needs for more than 60 years. Delivering. It's delivering now and someday, now and in the future. It's fastest to market and the infrastructure is already in place. High potential reserves still in the basin.

There's 3 Ts of proven reserves and another 19 Ts to go out and get. But again, I love the idea of a large pipeline coming down, selling international gas and having foreigners pay for our pipeline. That's great. And all on that pipeline we can benefit and we can bring our state from being a raw producer that we've always done. We've always produced raw.

We're like a territory. We need to switch that from a raw producer to a producer of a product and then make byproducts out of it. But you don't get that until you got energy. Right? We don't do— we sell raw fish, we sell raw oil and gas.

The only real product we make in-state and that we turn into a product is natural gas. Cook Inlet is also cheaper than their alternatives right now. Cheaper than a pipeline-only solution, cheaper than a dedicated LNG import solution, cheaper than a dedicated LNG export solution until that pipeline reaches 90% sales. You gotta sell 90% of that. So you got to do it with some thought, and these guys over here have a lot in front of them, and I wish them luck, but they've got a lot of things.

But that— if we get that prize, the prize— and that's how I always look at things, is what is the prize, how do we get it, and let's go after it in a right, reasonable, sensible way. That prize is great. And AK LNG— so where are we? So where we are in favor of an economic LNG. Okay?

But you can't use AK LNG as a complete replacement for Cook Inlet gas. It's high cost, high risk natural gas until you get 90% exports. Puts roughly 2,000 Kianai Peninsula workers at risk. Creates monopolies, could be a monopoly. Not proven and it's slower to market.

How a pipeline only hurts Alaskans. The pipeline to Wasilla is not a common carrier. Glenfar controls the price, volume, and access. We need to work on that. It takes jobs off the Kenai Peninsula, the construction burden to Alaska residents.

Alaskans pay an estimated $700 million more based upon the price quoted out there every year until they get 90% of exports on the LNG pipeline. That's, that's something I think we can work through. And if you blend the gas with Cook Inlet, it's a lot cheaper. For example, so, and it is, it, and it de-incentivizes cooking production that's already delivering. If we don't know we have a runway, we can't continue to deliver the 11th cheapest gas in the state.

The solution: supplement, don't replace. A pipeline to Kandakiski with an LNG export facility and gas inlet, blended gas included. We need to work on that. We need to be partners in that. Right now, the proposed pipeline is permitted only for LNG exports.

If it's built, we can use it to backstop Cook Inlet Gas, and that's what we recommend. HECC supports a pipeline with LNG exports facility. Economic, timely, efficient, and Alaskan-backed and supported. But we must do it with some thought. It's not an easy job what these guys are up against, but they can do it.

Including Cook Inlet Gas can, can, can creates again a blended rate and potentially lower prices forever. This isn't complicated. Protect the consumer. Keep the lowest cost, lowest risk gas flowing and keep investing now and into the future. Cook Inlet is the bridge.

It's the foundation and it's delivering today and it will deliver tomorrow. It doesn't just shut off. Don't walk away from Cook Inlet. Alaskans in Cook Inlet need Cook Inlet to continue and be part of the market in the future, and we wish a pipeline to Nikiski and LNG gas sales, and we hope it comes in 3 years.

Thank you, John. Um, next we have Commissioner Kathy Muñoz from the Department of Labor and Workforce Development, and I'm especially excited to have the commissioner present today because they have just completed a recent hot-off-the-printer document that actually does some deep dive into the jobs that would be created for the future. And so with that, Commissioner Muñoz, welcome, and I appreciate you presenting for the panel.

Thank you, Representative. It's wonderful to be with you. Greetings to everybody that is on the call today and there in person in Anchorage. First of all, I'd like to give you a quick overview of some of the work that we're doing to prepare Alaskans for gasline jobs, and then go into some information, specific data information from the report that you just cited. So the, the department oversees federal and state training funding that flows through the 14 job centers.

We provide individual training support for short-term industry-recognized training available through the job centers. Centers, and those are direct grants to students that complete the funding. We also provide competitive grants out to the regional training providers around the state. Those are union and non-union programs. And then finally, we, we oversee the, the Alaska Technical Vocational Education Program, which provides direct funding to named recipients in statute.

I want to recognize first the legislature for its longtime commitment to workforce development through these programs. Alaska is truly unique in the country that we have here in Alaska sustainable funding streams for workforce development, for training. The Alaska Workforce Investment Board just completed its most recent State Training and Employment Program competitive grant process, and we will be awarding $7.3 million distributed to 39 trainers.

The grants are targeted to high-demand, industry-recognized training that results in a certification. Alaska has a robust training network from southern Southeast on Prince of Wales Island all the way up to the Arctic. To the Iliasavik College in the Arctic. Many of the STEP grantees are— or awardees, rather— are apprenticeship programs. This pay-as-you-go model is very popular, and it's a wonderful training model.

The Alaska trade unions really hold the gold standard for a lot of this work and are the recipients of STEP grants. This past spring, we commissioned a workforce analysis to look at projected job demand of the gas line and other anticipated large-scale projects. So we're looking not just at the gas line, but we're also concurrently looking at the Donlin Mine, the Nome Port Project, Graphite One, the Ambler Access Project, and other projects. What we found is in the report, which you all have a copy of now, is that at peak construction, when Phase 1 of construction of the pipeline and Phase 2 construction of the LNG plant, when those two phases overlap, we will have a projected need of workers of 6,600 workers, 6,600 workers. When you couple that— development with other large-scale developments that I just mentioned, the projected workforce will be 8,600 workers.

The highest demand professions that have been identified are in the skilled trades: mechanics, plumbers, electricians, welders, heavy equipment operators, CDL drivers, and laborers. Alaska's our first priority is always to get Alaskans trained and ready for these opportunities, but we know that projects of this magnitude will require labor from other states. So in recognition of that, we have implemented regulatory and statutory changes at the department that will enable certified skilled labor from other states to come to work in Alaska without the bureaucratic delays that previously existed. Specifically in the area of electricians and plumbers, the Department of Labor certifies electricians and plumbers for work in Alaska. We have implemented provisional licensing, which allows certified workers from other states to, to work provisionally in Alaska for 1 year.

We have increased to approximately 32 states reciprocity, so recognizing that those states that have similar licensure as Alaska, that we will recognize licenses from those states to work in Alaska. We have also implemented military credit, recognizing that Alaska has a large military population. Uh, we want to have policies that encourage exiting active military to remain in Alaska So we have implemented a policy that allows for similar military credit to apply toward the Certificate of Fitness. And also third-party testing, which allows an individual that's completed the apprenticeship to take the test on the day that they're ready to test and not have to wait 6 or 8 weeks for the state's regularly scheduled testing.

In the last legislature, we had two legislative priorities that we worked on with you all, and they— there was a lot of progress that was made, but they did not make it through to the end. And we continue to advocate for strategic investments in our workforce system. We urge the legislature, a future legislature, to consider increased strategic investments in the STEP program. This is the most direct way to get funding to Alaskans through individual training support and support for the regional training providers around the state. We also strongly urge adoption of the, a state apprenticeship agency model, which would allow the state of Alaska to register apprenticeships.

Currently, that is a role of the federal government., and we believe that with local control that there would be many benefits that would follow. Also on the line today is Patrick Rose. Patrick is the chair of the Alaska Workforce Investment Board, and he was involved in the writing of the workforce analysis that I mentioned in my comments. So I think this is a good segue to turn it over to Patrick. Thank you very much, for the opportunity today.

All righty. We thank you very much, Commissioner. So, uh, with no further ado, Patrick Rose, Chair of the Workforce Investment Board, uh, if you're there, please, uh, go ahead.

Good afternoon, uh, members of the Alaska Gas Line Caucus. Thank you for the opportunity to speak today. My name is Patrick Rose. I'm the Chair of the Alaska Workforce Investment Board and Vice President of Business Services at Northern Industrial Training. Uh, the previous presentation you heard from the commissioner provided an overview of the report.

I'd like to spend the next few minutes talking about what the data tells us and more importantly what it means for the Alaska workforce. Glenn Fahren has stated at least 12,000 total jobs for the AKLNG project, which I agree. Our report goes more specific in the moment in time, and some of the statistics already stated by the commissioner are some of the, the focal points to it. So at peak construction, we're expecting approximately 6,600 total jobs just on AK LNG alone. That is what we consider the floor number, and so that would be, for example, June 28th of 2028, right?

That's a number in time. When you factor in the other projects that could be happening simultaneously with that, that number does increase to about 8,700 total jobs at one moment. That equals currently one quarter of our current construction workforce. At first glance, those numbers can be very daunting, like where do the people come from? What do we do?

I see it a little bit differently. I see thousands of opportunities, and those opportunities extend, extend to every skilled trade and every technical profession. Those would be heavy equipment operators, construction laborers, truck drivers, welders, electricians, pipefitters, mechanics, engineers, and construction managers. These are more than construction jobs. They are careers that provide family-supporting wages and skills that will benefit— continue to benefit Alaska long after the project's complete.

This year alone, we're expecting to have close to 7,500 to 8,000 high school graduates across the state of Alaska. Projects like this help define opportunity, not just in our residents of the state, but also for our future residents that are going to be entering the workforce. And so the opportunity that is there, we need to make sure that we can set the stage so we're ready for it. We should have realistic expectations when talking about Alaska Hire. We shouldn't measure success by asking whether every job goes to an Alaska resident, because it won't.

We should measure success by asking whether we did everything possible to prepare every Alaskan who wants to compete for those jobs, and that's exactly what this report is all about. It's about identifying where the opportunities are, understanding the workforce gaps, and providing a roadmap that prepares Alaskans for one of the largest infrastructure projects in Alaska's history. The positive news that we have going is that our Alaska workforce development ecosystem is ready. One of our most encouraging finds from this report is that Alaska already has a strong workforce development system. We have amazing registered apprenticeship programs, whether they're union or non-union, career and technical education programs in our high school that are expanding, the University of Alaska, private training organizations, Alaska Native organizations, and you can see the foundation already exists.

Our challenge is not building an entirely new system. More so, our challenge is expanding participation, removing barriers, and preparing more Alaskans before peak construction begins.

If we can agree on one thing, it's this: the opportunity before us is more about preparing Alaskans for these careers, and that's our goal. Then we need to have a serious conversation about workforce investment. One of the best tools we have, as stated by the Commissioner, is the State Training and Employment Program. STEP has a proven track record of helping Alaskans gain the skills employers need, and it's funded through the Alaska Unemployment Trust Fund, not unrestricted general funds. As stated before, we did have some priorities with bills go through the House and the Senate to help increase STEP fundings for projects and emphasize towards things like this.

And if we're serious— seriously about maximizing Alaska Hire and projects like Aklngi, then we need to invest in the workforce before the hiring begins, not after. Every dollar that we invest in workforce today increases the number of Alaskans who prepare to seize the opportunities for tomorrow. In closing, our report recommends sustained workforce investment, removing barriers like transportation, housing, childcare, so more Alaskans can participate in training and enter these careers. The Alaska LNG Project presents one of the greatest economic opportunities our state has seen in decades. The pipeline itself will one day be complete, but the welders, electricians, operators, mechanics, and apprentices we prepare today will continue building Alaska for decades to come.

If we make the right investment now, the right strategic moves through our government, the lasting legacy of this project won't simply be just energy infrastructure. It will be thousands of Alaskans who found meaningful careers because we prepared them before the opportunity arrived. Thank you for your time. Thank you very much, Patrick. I really appreciate what you had to share with us.

I did want to mention online we have Representative Moore, who's been with us, and also Representative Bynum and Representative Allard. Welcome. So before we get to Kari Noor with the Alaska Chamber, I just wanted to again thank the panelists and say that probably one of the hardest things to hear as a parent is, "Mom, I'm looking for a job outside." Thank you.

Thank you. Good morning for those of you. My name is Kari Noor. I'm the Director of External Affairs for the Alaska Chamber, and thank you for the opportunity to speak with you today. The Alaska Chamber is the state's largest business advocacy organization representing more than 700 businesses across Alaska.

That collectively employ over 58,000 Alaskans. Our mission is to promote a healthy business environment that promotes economic growth, job creation, and opportunity throughout the state. The Chamber supports advancing the Alaska LNG Project because it has the potential to strengthen Alaska's energy security, create jobs and business opportunities across multiple industries, and improve the long-term competitiveness of our economy. Our members need reliable, affordable energy, but they also need a stable policy environment that attracts the billions of dollars in private investment required to make a project of this scale a reality. We encourage the legislature to keep the gas line legislation focused on moving the project forward, avoid adding unrelated targeted taxes or surcharges, and address broader fiscal issues through separate statewide policy discussions.

This is an opportunity that requires action. Advancing the Alaska LNG Project now will benefit Alaska families, employers, communities, and our long-term economic future. Recent statewide polling reinforces that Alaskans recognize this opportunity. Nearly 80% of Alaskans support the construction of a natural gas pipeline from the North Slope to Southcentral Alaska for both in-state use and exports. 73% Support the state maintaining its ownership role and making additional investments to move the project toward construction.

In a separate statewide survey, nearly 40% of Alaskans indicated they would hold the legislature responsible if the project ultimately, ultimately fails to move forward. The timing is also critical. Alaska has a unique opportunity before us that we— that may not come again. We have unprecedented federal support strong interest from private sector partners, growing demand for LNG in international markets, and a looming natural gas supply shortage here at home. These conditions have aligned in a way we have not seen in decades, but opportunities like this do not remain open indefinitely.

Every month of uncertainty makes it harder to maintain momentum, secure investment, and keep Alaska competitive with other energy-producing regions around the world. The legislature has an important role to play by providing the certainty and policy framework needed to keep this project moving forward. For our members, the first issue is energy. Reliable and affordable energy is fundamental to economic growth. It affects household budgets, business operating costs, military readiness, community services, and whether employers have the confidence to invest and expand in Alaska.

The Alaska LNG project offers the opportunity to provide a long-term reliable supply of natural gas while strengthening energy security across the state. The second is economic opportunity. This is one of the most significant infrastructure projects in Alaska's history. Previous estimates, like Patrick alluded to, could support at least 7,000 construction jobs and hundreds of long-term positions before accounting for the broader economic multiplier. But the benefits extend well beyond direct employment.

Construction companies, trucking firms, manufacturers, miners, seafood processors, Alaska Native corporations, suppliers, small businesses, and communities throughout the state all stand to benefit from the contracts, services, and long-term economic activity this project would generate. Third is competitiveness. Alaska competes nationally and globally for investments. Projects of this magnitude require long planning horizons, enormous capital commitments. Investors need confidence that Alaska offers a stable, predictable policy environment.

That is why the Chamber and our coalition partners have consistently urged lawmakers to keep gasline legislation focused on its intended purpose: creating the conditions necessary to advance the Alaska LNG Project. We also want to be clear about what could jeopardize that opportunity. Adding unrelated targeted taxes, project-specific surcharges, or other policy provisions creates uncertainty. Even if those measures are narrowly intended, they send a broader signal that Alaska may change the rules during major investment decisions. That uncertainty affects whether companies choose to invest hire, purchase equipment, and grow in our state.

Which is not to suggest that important fiscal questions should be ignored. Community impacts, local government revenues, infrastructure funding, and long-term tax policy are all legitimate issues that deserve thoughtful consideration. Our request is simple: Keep the path clear. Advance legislation that supports the Alaska LNG Project. Preserve a stable and competitive investment climate, address broader tax and fiscal policy separately, and give this project the opportunity to succeed.

The greatest risk is no longer that we move too quickly. It is that we wait too long. Delays only increase costs, create uncertainty, and strengthen competing projects elsewhere. Ultimately, the Alaska LNG Project is much more than a pipeline. It's about securing Alaska's energy future, expanding private sector opportunity, and demonstrating that Alaska remains a place where major investment can move forward.

The Alaska Chamber stands ready to work with the legislature and all stakeholders to help make that vision a reality. I thank you for your time and for the consideration of the Chamber's comments this morning. Well, thank you very much, Carrie Noor and the Chamber. We appreciate you. So another voice from another sector.

We have Rebecca Logan from the Alaska Alliance. Rebecca, please start your testimony. Good morning, and thank you very much, Representative Costello and Senator Oscher, for holding this listening session today. It's interesting to be on this side of the table, and I do really appreciate the opportunity. Before I start with my comments, I do want to acknowledge that the business community is very aware of what's happening.

Um, and they're very appreciative of those legislators who are making an honest effort to move this forward. We've been doing a lot of advocacy work on this issue and, um, over the last couple months have had 500 different businesses and individuals throughout the state sign up on a support AK LNG website and they've provided over 300 comments in addition to adding their support. Um, and those comments clearly show that they know who is working to advance this project and they're aware of those who aren't. Those who are putting up barriers so that we can't move forward. So as I said, we have been running very broad advocacy campaigns encouraging legislators to pass legislation, and you all have heard, as the public has, a lot about us, a lot from us about what the Alaska LNG Project means for our members and our economy.

So today I want to focus on who your decisions impact and what it means if this project doesn't move forward. The Alliance currently has 575 members who employ 35,000 people in the state of Alaska. I've left on the back table for legislators' consideration just a snapshot of who those companies are. It's 150 companies who are very involved in supporting oil and gas in the state of Alaska. And I would encourage you to become familiar with the names of the Alaska businesses that will be affected by your decisions.

Not the project developers, but the hundreds of Alaska companies that employ our friends and neighbors, your constituents. They train our workforce, they invest in equipment and people, and they invest in our communities. The actions and investment decisions that these Alaska businesses take should speak louder than— not to be offensive— the blather that we hear from Juneau. While the Senate Resources Committee is debating a resolution supporting the project and is focused on replacing the phrase "will create jobs for Alaskans" with "may create jobs for Alaskans," these businesses are actually investing their own capital, taking real financial risks, and creating jobs. That action matters more than the word will or can in a resolution.

I'm sure everybody saw what happened in Fairbanks a few weeks ago when Wells Fargo invested $250,000 in the Fairbanks Pipeline Training Center to train our future pipeline workers. And it's unfortunate that at the same time we have legislators who are trying to make sure we don't have that pipeline future. Unlike the private sector, public officials continue to receive a paycheck and public benefits regardless of whether this project moves forward. Alaska workers, small businesses, and families don't have that same certainty. Their livelihoods depend on opportunities like the AK LNG project.

We all know that Alaska is facing serious challenges. Schools are closing, families are leaving, our cost of living continues to rise, and affordable, reliable energy remains out of reach for many of our communities. And these problems will not be solved without a strong private sector economy. Strong economies create strong communities. That's what supports schools, infrastructure, public safety, healthcare, and opportunities that keep families in Alaska.

Unfortunately, the message coming from Juneau that is the loudest is one of uncertainty towards private investment. I would encourage legislators to talk to people who are currently working in business development. The message they frequently hear from investors that they are trying to bring to Alaska is, "Wait and see." We are definitely going to wait and see what your legislature does. The taxing our way to prosperity conversation is being heard outside of Alaska and it is discouraging investment. And without offering credible opportunities to grow our economy, we should not be surprised when businesses and people choose to invest elsewhere.

So even though we are here today to talk about AK LNG, the real policy question before you is not simply whether to support one project. It's whether Alaska will be a state that welcomes investment, jobs, and opportunity, or one that continues to watch them leave. So thank you again for the opportunity. And thank you for having me here today. Thank you, Rebecca.

Really appreciate your comments and advocacy. Next, we have Alicia Maltby with the Associated Builders and Contractors, and she is going to be joining us on Teams. Hi, good morning. Thank you guys for the opportunity to speak with you today. As mentioned, I am Alicia Maltby.

I serve as the president and CEO of the Associated Builders and Contractors Association of Alaska, commonly known as ABC, and that is how I'll refer to it because that's a mouthful as I move forward. So ABC is a construction industry association representing merit shop contractors, subcontractors, suppliers, and construction professionals. We even have some union companies that join our organization in order to utilize our apprenticeship program and because they believe in our mission. Our mission is to support open competition workforce development, safety, and the ability of every qualified contractor and craft professional to compete for work based on skill, value, safety, and performance, not labor affiliation. ABC strongly supports responsible resource development, and we recognize the Alaska LNG Project is a generational opportunity for jobs, business growth, energy security, and long-term economic benefit.

We want this project to succeed. We also want it structured in a way that maximizes Alaska Hire and maximizes participation by Alaska companies. I want to be clear on the outset, ABC opposes government-mandated project labor agreements. The private sector responsible for developing a project should be left to decide how best to manage the project, not government-elected officials who have little to no knowledge on project management or a specific project's needs. If a private owner, private developer, general contractor, or construction manager determines that a PLA makes sense a particular portion of a project, that is their business decision.

Private parties can and should be free to negotiate labor arrangements that work for them. Our concern is when public policy requires a PLA regardless of whether that model is appropriate for every component of a project. So let me give you a little background on PLAs just for those who are not clear. A Project Labor Agreement is a pre-hire collective bargaining agreement that establishes the terms and conditions conditions of employment for specific construction project. Depending on how the agreement is written, it may require contractors to use union hiring halls, follow union work rules, recognize union representation for the project, contribute to union benefit and training funds, and operate under labor terms that differ from how many Alaskan contractors normally do business.

That may be workable for some contractors and some scopes of work. It may not be workable for others. That is why the distinction between a voluntarily— a voluntary privately negotiated PLA and a government-mandated PLA matters so much. So what is the reality of Alaska's workforce currently? By any reasonable measure, the majority of Alaska's private construction workers are non-union members.

ABC has historically used UnionStats data in this discussion. That data consistently shows that non-union workers make up an overwhelmingly share of private construction workforce. Whether that number is described as roughly three-quarters or higher in more recent years, the policy point is the same. Alaska cannot maximize Alaska Higher if we build barriers around the majority of Alaska construction workers. A labor policy for Alaska LNG should be designed around Alaska as it currently exists, not based on anecdotal data or fictional rhetoric.

In Alaska, union and non-union contractors already work together every day. Union general contractors hire non-union subcontractors and vice versa. The construction market selects the companies that safely and efficiently perform work. If a PLA were the best answer for most Alaska projects, Alaska contractors could already choose them. Any general contractor in Alaska can currently bid and manage a project using a PLA if that model fits the job, but for most projects they do not.

Legislators should ask themselves Why? In our view, it is because Alaska does not have the kind of construction labor instability that PLAs are often claimed to solve. Our market works because companies compete, collaborate, and hire based on capability and workforce availability. This issue is also directly tied to workforce development. ABC operates the largest construction apprenticeship program in the state of Alaska, with more than 550 apprentices and 120 participating employers across the state.

These apprentices are Alaskans who are training for long-term careers in the trades. They are exactly the workers policymakers say they want to benefit from Alaska LNG. This— my apologies— a government-mandated PLA could make it difficult and in some cases practically impossible for these apprentices to be able to work on this portion of projects. So LNG is not just a pipeline. The gas treatment plant, LNG export facility, marine facilities, utilities, roads, site work, warehouses, laydown areas, worker housing, and so much more are all the types of work projects Alaskan companies already build.

The scope of work routinely performed by Alaskan contractors under normal competitive bidding and normal labor arrangements. Mandating that every aspect of a project operate under a PLA could reduce Alaska resident participation precisely where Alaska companies are most capable of performing the work. A more flexible approach would allow Glynfarm and its contractors to use the workforce model that best fits the component while preserving the largest possible role for Alaska businesses and Alaska workers.

The question before policymakers should not be whether unions can participate in Alaska LNG. Of course they can, and they should. The question is whether state policy should require a labor structure that may exclude or discourage the majority of Alaska construction firms, workers, and apprentices from participating. ABC believes the answer is no. The state should protect maximum opportunity, maximum competition, and maximum Alaska hire.

That means allowing private negotiation where a PLA makes sense, but not using government policy to mandate one labor model across scopes of work where Alaska contractors are already qualified, available, and successfully performing similar construction. Alaska LNG is too important to narrow the field unnecessarily. If the project is structured to welcome union and non-union contractors, union and non-union workers, and union and non-union apprentices, Alaska will be the strongest position to capture the economic benefit of this investment. ABC supports Alaska LNG. We support Alaska jobs, we support Alaska Hire, we support responsible resource development, and we support the rights of private parties to choose the labor model that works for them.

But we respectfully urge policymakers not to mandate a PLA across the entire project. Instead, structure Alaska LNG to maximize participation by all qualified Alaska workers, all qualified Alaska contractors, and all qualified Alaska apprentices. This is the path that is most consistent with Alaska Hire, open competition, and the maximum benefit of this project for all the people of Alaska. I really appreciate your time today, and I would be happy to answer any questions after this panel if you guys would like to give me a call. Thank you so much.

All right. Well, thank you, Alicia Mopi, from the Associated Builders and Contractors. I just want to take a moment to recognize Representative Justin Ruffridge is with us also online. So we're now going to move to Damian Boyles, from— he's the CEO of Matanuska Telephone Association. Please go ahead, start your testimony, introduce yourself.

Yeah, thank you very much. My name is Damian Boyles. I'm the CEO of Matanuska Telecom Association. Pleasure to be here. Thank you to the Gas Line Caucus for the invitation here and the opportunity to address what the impact of telecom is from an industry standpoint.

Um, a little bit about MTA. MTA services about 33,000 households. So think about that's families, 33,000 families and businesses across the Matsu Valley and across South Central Alaska. Um, we provide telecommunication services to homes, businesses, schools, your local fire and police department, and to most of our military installations across this, across the state. Appreciate the opportunity to testify here today.

I'm here as the CEO of a business that depends on predictable, reliable infrastructure to deliver services to its members.

As we— and I'm also here, by the way, as an Alaskan who cares about the impact on jobs, the impact on economic security for the next generation. I have 6 daughters and I think about where they're going to land as they exit college. And this is on the forefront of my mind. So I'm going to couch my economic development comments both from a— as a CEO of an employer of 400 folks across the state and as a dad. I want to be clear about the scope of my comments here.

I'm not here today to testify on the specifics of the legislation. We've got experts here that can do do a much better job at that than I could. My purpose is to speak to the need for a long-term reliable power source and the real-world impact of energy reliability, the impact on businesses, residents, public services, communications, and really about the economic future of the state. I'm here today to push to get this thing over the finish line. At MTA, we acknowledge that reliable energy is the foundation for economic investment.

If you go back a little bit, before Prudhoe Bay, Alaska had resources. But after TAPS, Alaska had an economy built around those resources. Pipeline didn't create the oil, but TAPS unlocked the value. I believe that the gas pipeline here represents a similar question to us as this current generation. Not whether Alaska has natural gas, but whether we have the will to build the infrastructure necessary to unlock the value for Alaskans across the state.

Projects of this size require discipline, transparency, careful planning, responsible oversight. We all know that. But I think the lesson from TAPS remains the same. Resources don't transform an economy until the infrastructure is available that connects them to the market. For Alaska, the opportunity— that's the opportunity opportunity in front of us.

The LNG pipeline— or the LNG pipeline project is about more than just a pipeline. It's about energy security. It's about investment confidence. We heard several comments about the stability needed to bring in millions and even billions of dollars into the state, and that's a benefit to us and to our children.

And then think about the impacts further down the line. Housing development. Ensuring future generations of Alaskans have a place to live and work and play. From MTA's perspective, this is not abstract. Today our network supports home schools, healthcare providers, I mentioned businesses, government agencies, first responders, military installations, and our fiber network, our transport systems, central offices, all require stable, predictable power, both from an availability standpoint and from a cost standpoint.

And we all have run businesses. As we do long-range planning, those are the things that need to be in place for us to make those plans and invest our own— or plan our own future investment as we move forward. And this is one reason MTA strongly supports moving the pipeline forward to generational infrastructure investment from our view. For the Matsu region, the opportunity is is specifically significant. Mayor DeVries mentioned earlier about the growth that's happening in the Valley.

It's absolutely true. In order to keep that growth going, we need to continue infrastructure investment. As that occurs, communities grow, businesses expand, housing follows, new communities pop up, new roads, new transportation services. And for us, the demand for connectivity increases. And as MTA stands today, we are ready to meet that demand.

We'll continue to do what we've done for more than 70 years for our members— provide the communication infrastructure that supports growth, not only for this project but for the broader economic activity that follows. I believe this project should be viewed as a foundational infrastructure, just as previous generations invested in roads, electrical infrastructure, ports, telecommunication networks, and TAPS. We have a once-in-a-generational opportunity, and I would say responsibility, to invest in an infrastructure that can strengthen Alaska's economic future. And let's not forget the jobs that we've all been talking about for our, for the next generation. I believe reliable energy and reliable communications are two of the most important building blocks for a strong economy for Alaska.

Economic growth across the Matsu and the entire state depends on both of these infrastructure investments. As an Alaskan, I believe the opportunities of this scale are very rare. This is not simply another project. It's not simply another pipeline. It's a generational opportunity to strengthen Alaska's energy security, drive economic growth, and build infrastructure that can serve Alaskans for decades and decades and decades to come.

Resources create potential, but infrastructure creates opportunity. And for Alaska, this opportunity, um, it's this opportunity that's at stake. Appreciate the opportunity to comment here, to speak on behalf of the telecommunications industry and the benefit that the pipeline would pose to those of us that provide connectivity to you every day. Thank you very much. Thank you, Demian.

Really appreciate you being here. Next we have Adam Prestige with Glenfarm. Thank you, Representative Costello and Senator Rascher, for organizing this. And want to extend my broader thanks to all of the members of the legislature and their very hardworking staff members for a really significant and I'd say historic level of work that's gone into this this tax bill and this process. It reflects many, many months and years of work.

And one of the things that I think really stands out from this panel here today is how much the Alaska LNG Project, the Alaska Gas Line, is a collective effort. This project only happens with the buy-in and the partnership and the collaboration of many participants here at the table and elsewhere across the state. That includes going back to our work on this tax bill, our work with the mayoral group, the mayors of the boroughs through which the pipeline passes—Mayor Machicki, Mayor DeVries, and others—months of work that went into how do we make sure this is a project that is structured with a property tax that works for the boroughs that it runs through. The group that's collaborated on this includes not just the different committees, the House Natural Resources Committee, the House Finance Committee, the Senate Natural Resources Committee, the Senate Finance Committee. As well, it also includes a tremendous amount of work with labor groups, and we're very proud of the memorandum of understanding that we signed with the Building Trades Councils of Fairbanks and Anchorage some months ago.

That brings us to this point here, and what I want to talk about for a moment is putting this project into their perspective of fundamentals and challenges. And when you look at this project, as I always say, when we're introducing this project, when it was first introduced to us as an opportunity to partner with, one of the things that jumps out first is the longevity, the number of years that this project has been a vision. I had someone tell me earlier this week that they worked on the Trans-Alaska Oil Pipeline They actually left that job early because they thought that they needed to qualify for work on the gas line. And so since the late 1970s, this project has been— has been a vision. And so obviously, with a project that has a 50-year legacy, there are challenges to that.

And some of those challenges have been articulated here today. It's big. It has— it has construction complexity. That's something I could talk for hours about because it is achievable, it's feasible. But that doesn't mean that it's not hard.

It's expensive. We need to convince lenders and investors that the state of Alaska is the right place for them to put billions of dollars. That doesn't come easily. So the list of challenges— there are plenty of commentators out there who can tell you how hard this project is. It is, no doubt.

But what's more important than that are the fundamentals that drive this project forward. There is a reason that we're still talking about this project that's been in concept for 50 years, and it's because the fundamentals of the project drive it forward and they make logical sense. And I want to talk about some of those fundamentals that still make sense on the project today. It starts with the tremendous resource of natural gas on the North Slope. And I've really enjoyed the commentary on the North Slope resources today.

By some estimates, or by the standing estimates, 200 trillion cubic feet of gas on the North Slope. Some estimates are much more, 400 trillion cubic feet of gas on the North Slope. That makes Alaska and the Alaska's North Slope home of one of the greatest gas reservoirs anywhere in the world. It's stranded. It doesn't have a way to come to market by any economical scale.

There is a demand. There's a demand for Alaskans to have natural gas, to have a stable, multi-decade supply of reliable energy security. There is a demand not just in the domestic region of Alaska, but overseas. There is a real strong interest for LNG from our Asian partners and allies to have that energy relationship with the United States. And it goes back to Kenai LNG, commissioned in 1969, right in Mayor Machickie's neighborhood.

And it ran for 48 years, 48 years, nearly 50 years without missing a single cargo of deliveries to Japan. That is a record of operational excellence that is unbeatable. So what that means now is that when buyers overseas are looking at where can they buy their LNG, How can they navigate uncertainty, particularly with everything happening in the Middle East right now? Alaska LNG emerges as one of the best sources for our overseas partners to, to build their energy security.

There is a huge amount of work that has been done by our predecessors, by the state, by the producer group on this project, and we were very privileged to step into that foundation. We've taken that foundation and we've advanced the project further than ever before. Under our ownership, under Glenfarm's ownership, we brought in Worley, one of the most capable and largest engineering firms in the world. We completed the final engineering and cost estimating for the pipeline project that is sufficient to, to close financing. So the project stands with essentially completed engineering for the pre-FID stage that it stands in.

We've got construction contractors who are anxious to build the project. One of the challenges of the delays we've experienced within the legislature has been that our construction contractors are standing by, eager to close those contracts and frankly get to work. And after every hearing, after every legislative session, My phone rings with calls from customers, from contractors who want to understand what's the impact of that hearing, what's going to happen next, what's going to happen in the next special session, because the partners are lined up wanting to take this project forward and ready to do so.

There's been a discussion that I've really enjoyed hearing today, particularly about the windows of opportunity and the opportunity that's in front of us now. When you have a large infrastructure project like this, a lot of things rely on momentum. And everyone who has watched this project over the years has seen stops and starts, periods of momentum where it looked like there was a path forward, and times where, often due to politics, geo— international politics, that window has closed. And so when we look at the risk of delay, this is not something that can just be perpetually delayed. We can't assume that if we down our pencils now, particularly on this tax bill, that we can just pick them up 6 months from now and everything will be the same and we'll be able to drive forward.

We just don't know what the future looks like. We don't know how the world will change. We don't know what the economy will do. And so with a project as important as this, with the window of opportunity that's been given to us, we need to take it. Nåwe sit in the third special session of the Alaska Legislature.

Obviously what that underscores is the importance of this property tax bill. It has— it's had the close attention of all 60 legislators in the House and the Senate.

I have lost count, but dozens and dozens and dozens of hearings and testimony session from, from, from Glen Farn, from the Alaska Gas Line Development Corporation, from Enstar, from the Department of Revenue, from the Department of Natural Resources. This is a topic that has had tremendous focus, which underscores its importance. And that process has been, has been so critical and so thorough and valuable because it has allowed the full legislature and the, and the public that they represent to examine the project to make sure, most importantly, that the bill that will get passed on this project is a bill that works for all interested parties. It's not perfect. I think it has required compromise by many parties involved.

And so, you know, I've heard some people say that, you know, good legislation— nobody's thrilled when good legislation gets passed because it's compromise. Some of those compromises I think are relevant to the discussion that we've had here today. And underscore the effort that Glenfarm has taken, along with our partners at Alaska Gas Line Development Corporation, to make sure that it is a bill that works. And so we have talked about the commitment to make sure that this project is built by Alaska, Alaska contractors and the labor force.

One of the things that was presented to us early in our discussion with the, with the mayors was a concern about the impacts of construction on their community. And so hearing that message from the mayors, Glen Farn offered and submitted as a proposal to add to the bill for the inclusion of a community impact fund that would be cash invested by the project, given to the communities to offset for the impacts of construction that aren't already addressed and mitigated by the project.

The project, I think, has made an exceptional commitment in the legislature. And when I say the project's made the commitment, I say we've expressed our support, we've engaged with the legislature, and we have expressed our support for what I think is a really exceptional thing, which is a price cap on the cost of gas, because we want to make sure that this is an economically positive impact on, on the state and most importantly, on the ratepayers. And so in order to make sure that that protection exists, we've been supportive of capping the price of gas that can be sold to, to the utilities and the ratepayers of Alaska. That's an exceptional thing. I think that is something that has been, been quite controversial within the legislature.

However, it underscores two things: our commitment to make sure that we are protective of the ratepayers and our belief that we can do this project and we can do it economically within that price cap. Lastly, in a similar measure, we've made a commitment and we've been supportive of language that was added to the legislation to ensure that ratepayers do not bear the risk of cost overruns. That means that if there is a risk that the project is over budget, frankly, we, Glenfarm, and our investors, we're going to wear that risk. And we are willing to do that because we're confident in the fundamentals of the project, we're confident confident in the engineering work that's been done. We're confident in the work and the structuring that we've done with the contractors that want to build it, and we think that this project can get done on schedule and on budget, and that's why we're willing to make that kind of a commitment to take the risk of cost overruns on ourselves.

So now where we stand. One of the questions I get asked every single day, whether it's by LNG buyers or contractors or members of the media or members of the public is, what do you think is going to happen next in the special session? What's going to happen to the tax bill and what's going to happen after that? And I maintain a confidence and an optimism that the legislature will pass a— will pass this bill. And I believe it will be a bill that works for all parties involved.

And we've heard a lot of different perspectives and a lot of different perspectives are already reflected in the bill. I think that the property tax bill now sits on the 1-yard line, the last mile, the final push up, up the mountain. Nothing ever— nothing of this scale is ever easy. Everyone who's worked on this throughout this year, throughout the decade before, knows how hard it has been. But we stand now at the point with a real opportunity, the window of opportunity in front of us, and pushing this bill across the finish line is what will allow the project to to move forward.

And I have every confidence that at the end of the day, the logic, the fundamentals, the need for this project to go forward, and the tremendous benefit that this project will carry to the state is what will push this— the tax bill across the line to being passed in a form that works during this special session. So with that, with the tax bill passed, there is more work to be done. There is a— there is the process of going through the regulatory process with the Regulatory Commission of Alaska and our contracts with the utilities. There is obviously the work to actually build the project, and so there's more hard work to be done, of course, to— before we can flow gas. But again, I'm confident that with the continued investment of time, resources, and emotional energy, intellectual energy from so many members of the Alaskan community, including members of this panel, that we will be able to do it, and very honored to be able to be in the position to carry that forward.

Thank you. All right. Thank you very much, Adam. We appreciate the perspective from the developer. So moving along, I'm going to go to John Sims, president of Enstar.

John, go ahead and introduce yourself. Thank you, Senator Rauscher. John Sims. I'm the president of NSTAR and also the guy that no longer gets invited to any parties.

So, you know, I've heard a lot of what I would say kind of niceties, you know, Senator Macchicki, don't panic, a lot of discussion about low-cost energy. The utilities are no longer in a position where Right now, today, we're looking for low-cost energy. We're looking for energy, period.

And, you know, I probably should apologize. If you had a president sitting in the NSTAR seat today, we would probably be able to offer you reliable energy because the trigger would have been pulled on LNG import a couple years ago. Chairman Pickett of the commission the RCA who regulates utilities. Every time I would get in front of him, he would ask me, where are we on LNG imports? Where are we on LNG imports?

Because he saw what was happening to the Cook Inlet. But, but I have been confident and I have been relying on the Cook Inlet as well, and I've had faith in the Cook Inlet. We met with legislators this January. We invited them to Enstar and we showed them the 2025-2026 supply and demand chart, which shows our demand for our customers and how we were going to supply them. And we had certain expectations that were coming from the Cook Inlet for this year to be able to meet our customers' demand.

Because of that reliance, because of that confidence that I had in Cook Inlet, as we sit today, if deliveries maintain at the same rate we're getting them, We will be 3 BCF short for this upcoming winter. So let me put that in a little different perspective for folks. 3 BCF is equivalent to 18 days in the middle of winter where I cannot serve any customers, not just residential, not just small commercial, any customers. And so, you know, on social media, you're, you know, you'll start to see and hear the fearmongering conversation, right? John Sims is now fearmongering.

I am the only entity up here, along with Tony Izzo, that has an obligation to serve customers. No one else here has an obligation to do business in this state. I do. Okay. And they can get rid of me.

Our company will still have that obligation to serve. So we are not fearmongering. We are trying to show the public the situation that we are in. Now, if deliveries come as expected from the Cook Inlet for the remainder of the year, we will be 1 BCF short, which means I'll need 6 days of gas in the middle of winter for folks. That is under normal weather conditions.

Now thankfully, I've seen in the press, and I always trust the press, that there's going to be an El Niño this year, so we might be okay. And, and it's, it's— you know, it's funny, but, you know, there was a letter that was sent around by some former Hillcorp employees that talked about Enstar and its hope. They're not lying. Right now, we are hoping for an El Niño. That is the situation we're in.

It is urgent. We cannot delay it. And trust me, a pipeline or an LNG import, we cannot do it in time to get it here for this winter. We can't do it in time to get next winter and probably not even in 2029. But the sooner we start acting and the sooner we start getting together this plan and finalizing things, we can start having reliable energy for our customers.

In the meantime, we need to do everything that Hex is talking about. We need to support the Cook Inlet. We need them to get over this hump.

But from my perspective, and I think most producers would tell you this, it is no longer a viable basin. How do we know it's no longer viable? Because they have to designate it as critical infrastructure. They have to have, uh, dry well insurance. They have to have subsidies.

That is not economic viability. That is legislation out of necessity. That is the place we're in today. We have to have legislation out of necessity because as we are looking at things today, I am 18 days short of serving our customers. JBEHR reached out to me.

I don't know for those folks who have heard the fantastic news from our federal— from our federal delegation. There's planned $6.9 billion worth of investment in JBEHR here. Fantastic news. New buildings. New infrastructure, new people moving up, $6.9 billion worth to expand JBER.

Somebody came in our office, representative from JBER, saying we have a 30,000— somebody just texted me, what was it, 30,000, 60,000— 60,000 square foot building that they want to build in a couple years. I don't have gas for them.

So we're now telling the military, You need to plan on dual fuel.

This is the state that we're in. This is the situation that we have put ourselves in, and I take blame for this. We were complacent. Hillcorp came in, they invested $1.5 billion, they drilled 192 wells, and things were pretty easy and great for quite a while. Now thankfully, they have given us the message that they cannot maintain that same investment in the Cook Inlet because it is economically viable, and there is no one else that wants to come in and spend $1.5 billion to make sure that we have gas coming from Cook Inlet.

So the future— what, what do we do? Enstar has spent millions of dollars looking at worldwide solutions. If there is a pipeline anywhere in the state of Alaska. We have looked at it and we have run the economics. Can we do a small pipeline from the North Slope down here?

Yes, we could. To John Hendricks's point, it's expensive. Uh, same situation, right? And that's the unfortunate reality that we're in. We have to export.

Uh, we have to find other industries to consume so that it can spread the cost. We've looked at other project— every project around. Uh, we've spent years trying to do this analysis, and there's only one that we have found that will reduce the price of energy. You've all heard me say it before. This is the same group that I always present in front of, and unfortunately this isn't getting out to the general public.

But the reality of the situation is, if we want to reduce the price of energy in the state of Alaska and have some of those, you know, low-cost talking points, then we have to be behind the AK LNG project.

With that information, I'll just— I'll leave it up to you to decide whether or not we just maintain the status quo or we start to have a little panic, because that's where we're at today.

Thank you very much, John. I appreciate you being here. Next, we have Tony Izzo with the Matanuska Electric Association, the CEO. Thank you, Tony, for being here. Thank you.

Excuse me. Thank you very much. A great— greatly appreciate you, Senator Rauch, you, Representative Costello, for the opportunity to comment. I really can resonate with John's comments about the utility perspective. Matanuska Electric is the oldest electric cooperative in the state of Alaska.

We were formed in 1941. We are honored to serve about 150,000 Alaskans with an essential service in a subarctic and seismic and often dark climate. We're the third largest buyer of gas in the Cook Inlet, and I give you some sense of scale here. Enstar clearly being number one, but John mentioned 3 BCF of gas. That's half a year for MEA.

We, we go through 6 BCF a year to produce 85% of the power for our members, which are the second largest population center. And while I'm in my 15th year at MEA, during that time we have added over 1,000 new services each year. Uh, we are that kind of inverse to the overall state economic outlook in that, unfortunately, it's growing, but it's people coming from other parts of the state. What I plan to cover today is really 3 things. I'm going to give you some history as I have lived it in the Cook Inlet.

I'm going to talk about what it means to be a prudent utility operator. And a lot of that experience— I've been in Alaska Energy since 1999, but I worked in 2 prior states for almost 20 years prior. And I'm going to talk about what it means to be a prudent utility operator, because I think that context is very important. And then I'll discuss what our current situation looks like. So in terms of history, how I lived it, very early on, I worked for the gas utility, and very early on, the utility opposed LNG export.

Out of concern that as a utility, you can see in your confidential discussions with producers, uh, the fact that around the turn of the century, clearly the gas that had been discovered with oil was already under contract, and it was gonna take something different to contract for— I'll call it new gas. Investment was required. So similar to the description I heard of the North Slope with the hundreds of trillions of cubic feet of stranded gas, the Cook Inlet was full of stranded gas. And you'd be shocked at some of the prices I saw in '99, 25 cents per million BTU or per MCF. MEA currently is paying $9, which is one of the lowest prices, unfortunately.

For that same amount. So we opposed the export under the premise that we could see the future, and we knew that— we thought at the time that it would be prudent to save that gas, to preserve that gas for Alaskans. And in a rate case with the Regulatory Commission— and I'm going to talk a lot about unintended consequences throughout this history, because I think there's a lesson to be learned. The commission disallowed the recovery of the legal costs of that battle, of that, of that challenge to extending the LNG export license, because the utility lost the case. And so we were told by a state agency, don't bother spending money on trying to preserve the gas in the region because if you don't win the case, you're, you're going to be punished.

So what happened next? As I was trying to negotiate for this new volumes of gas, we had Unocal— it had moved off from the ammonia urea plant ownership and negotiated a contract for, um, I think the cap of that contract was 450 billion cubic feet. At a 36-month trailing average of Henry Hub. And prices in the inlet started to go up. There was a commitment by that producer to spend 50+ million— I think they spent over 150, if I recall— in developing new fields and bringing new gas online.

Prices went up, and there was a concern about that, and so the next contract was negotiated with Marathon, for approximately 10 years of NSTAR's demand at a 12-month trailing average of Henry Hub. Now, Henry Hub today was about $2.62 when I, when I looked at it. And the governor at that time said, well, we are not connected to the lower 48, therefore we shouldn't have to pay prices associated with the lower 48. Now, we chose Henry Hub because it's the most transparent hub there is in the country. And transparency was important for a regulated utility.

As a result, October of 2006, the regulatory commission denied that contract. It was a 3-to-2 vote. And the producers at the time, Marathon, Conoco, there was another one, there was a third, all came to me and said, "OK, Alaska is closed for business, and by 2009 we will be out of here." And they did exactly what they said they would do. Now remember, they were C-corps. They weren't S-corps.

They were paying taxes. And they got the signals pretty clear. If they couldn't get a return on their investment like they could anywhere else, they were going to go. And so things became really difficult. We were lucky to find And this goes for electric and gas.

One-year contracts. Prices were volatile.

And it resulted in the legislature taking action through the Cook Inlet Recovery Act. For those that, you know, recall Mike Hawker and those of you in the legislature that sponsored and supported that legislation, well, the result was 19 new players. That was my count. I wrote down— still have the page in my notebook— 19 new players were brought into the inlet because, hey, we're open for business.

Again. And one of those 19 new players, I, along with another electric utility, negotiated a 10-year supply of gas at $5.

Now, there were tax credits involved. Right, wrong, or indifferent, I think as an Alaskan, I would say the tax credits were— they were intended for all the right reasons.

Did they grow exponentially? Were they used for things maybe they weren't intended for? I guess that That could be debated. But again, this is through the history of my eyes as a utility operator, as a utility leader.

We were signing and executing the agreements for that 10 years of $5 gas for the two largest electric utilities when their phones went off. And it was their lender, ING, calling to say, "Your governor just vetoed the tax credits," which are in statute. You're closed for business. We can't do this deal. And they left.

And I don't recall any one of those 19 being here today. So once again, we went through the cycle of unintended consequences.

The reason that Hill Corp coming in with their core competency, I have to say from my perspective, thank goodness. They have met and exceeded every single promise and then some. And the fact that there being an S corp, you know, might be an issue that gets mixed into this legislation— well, it's— if it's been an issue, it's been an issue since they came over 10 years ago. And you have to ask yourself, who created the situation that required an S corp to come in and bail us out? We did.

So it comes under the heading of no good deed goes unpunished.

Following the Cook Inlet Recovery Act, again, it— great piece of legislation. In the 11th hour, the rug got unintentionally— nobody did this on purpose— got pulled out from under us. Once again, everybody leaves the inlet. Now I'm going to switch to what is a prudent utility operator, and I'm going to mix my experience from two other states. Prior to coming to Alaska.

And in those two other states as a gas utility operator, uh, president of a small gas utility in Michigan prior to coming to Alaska. Prudency for a gas utility, we had in both those utilities, different— again, different states— we had gas pipelines to three different states and, uh, at least in my first one, we partnered in a pipeline to Canada. Because we are providing an essential service and you can't— you're a monopoly. You're— we're honored to do that in the— for Matanuska Electric and we recognize every single day we're a monopoly who are stewards of our members' equity and no one else is going to provide that essential service and no one else is going to get called if I don't or John doesn't or any other certificated utility doesn't. And so having multiple sources of supply— in fact, in my first utility, we had two different— I go back far enough that we imported LNG from Algeria into Massachusetts.

We trucked it down the coast. We stored it in two different locations where we then, in case things went bad in a winter, one of the pipelines breached or there was a contractor hit it or there was some kind of an outage with a field, one of the states from Tennessee, Texas, Louisiana, or Canada where we got the gas from, we were able to supply our customers with the reliable service. In my Michigan utility, we had salt cavern storage, and again, we had those 3 or 4 pipelines, so we— that was the definition of prudency. And contracts in those days were 20 years. There was no volatility around supply.

When I hear the question about Cook Inlet viability, I'll step back into history for a minute. One of the things I did in 2001, realizing that I was no longer going to buy— be able to buy that old gas that was discovered, it was, you know, investment was required, I went to Senator Ted Stevens. And he was a great partner and a great supporter. And he was able to provide $500,000 of funding with Department of Energy. And they led a study through third-party experts to do an analysis of the Cook Inlet.

And, you know, no disrespect to anyone here, I agree with Mr. Hendricks and I disagree. And I agree that there are trillions of cubic feet in the Cook Inlet because that study in 2001 showed endowments or fields like the Cook Inlet basin in comparison to fields all around the globe. And it was pretty clear that there were these gaps. We had so many of these 10 BCF fields or 5 BCF fields or 500 million standard cubic feet fields, and there were big gaps. But what I brought to the table at that time was, as a prudent utility operator, there's no X on the map.

That tells me where I'm gonna find that. And when the 19 new players came to town, some 15 years later, I was asked by a state official, "Well, you should be happy. There are all these new players looking for gas." And I said, "Wait, you have to understand. I mean, I'll support a parade for whoever brought those 19 players into town, but as a gas utility operator, Prudency dictates that if I can't get it under contract, it might as well not exist. And so the huge endowment of the Cook Inlet is great, but at the same time, I agree there are trillions of cubic feet of gas.

It is not viable. I agree with Mr. Sims. It's not viable because there's no one's investing to develop it. And, and even places where we know there's some gas and there's a developer who's trying to get going, It isn't happening. So if I can't— from a utility perspective, if I can't put it under contract, it doesn't exist.

There's another old saying around prudency from a utility perspective that I think is really critical. And again, I'm so thankful for HEX. I'm so thankful for John Hendricks and operators like that— North Slope, Cook Inlet. But in the utility world, prudency looks different. And we had a saying that goes back decades before my time, and I'm in my 46th year of this.

You never hang a utility off of one well or one field. You can't do it, especially if it's offshore, especially depending on the pipes and the condition and the pressures and the maximum operating— allowable operating pressure and the PHMSA requirements of whether or not you can get that gas there. The reliability means something different as a prudent operator. It means lots of wells in case something goes wrong at one. If a line freezes up from the offshore well to land and you can't get the gas, you're not a prudent operator if that's how— if you've put all your eggs in that basket.

So what does our current situation look like? I'm not proud to state this. I never thought I would be in a position where I had to doubt reliability as an essential service provider. And when I started in 1980, early '81, the utility had gas pipe in service that predated the Civil War. Even wood gas line was found to be live still at that time.

So the industry goes back, you know, well more than 150 years. And today, I've got gas under contract for another 2 years and 7 months. Very lucky and thankful to the legislature for gas storage legislation and additional gas storage in the inlet. And I believe we need a lot more than we have today, because if John doesn't have 3 billion cubic feet, and I need to move some of that, because the gas system has to be pressurized. When the lights go out, you can fix the issue and turn the switch back on.

Gas system doesn't work that way. Well, 3 BCF is 182.5 days for, you know, for MEA. And reliability is about certainty. We often say, what's the enemy of energy security? Uncertainty is.

So I've got gas for 2 years and 7 months. I've got some gas storage. And I'm buying some gas from Hilcorp under the agreement that extended us to April 1st, 2029, and putting that into storage. Prices have gone up, lots of new in the news. Rates have gone up, inflation has impacted us.

By April of 2027, so what is that, 7 months away, there'll be a 5% increase. We go from $9 to $10.25. In 1 year and 7 months, we go to $11.75.

We're seeing gas in the inlet, $16, $17 for what I would refer to as interruptible gas. That doesn't include the price that it takes for me to purchase that, put it into storage so that I can firm it up and take it out when I need it. Now luckily, my predecessors at MEA built a dual fuel power plant. We can run 100% on diesel and you will not see any interruption in power One of the things about electricity is I look up at the lights here. That was made a second ago, a split second ago.

It isn't sitting in a tank somewhere. It's that fast. I can probably— my blink would take longer than the time it took that that power was actually made and it got here.

So going forward, I think we have a situation where diversification is critical. I talked about prudency, and a lot of people, I'm sure, in the audience are thinking about, well, why not diversify to other things?

We have tried to do that. We have wanted to do that. We're 15% renewable today. We had some large wind projects that turned out to not really have the information or analysis that was required. There was a misrepresentation.

Maybe it was on I don't think it was intentional, but it was represented as, here's the data ready to go. And what we found is— 3 of the electrics found— it's not. And where is that today? There's nothing on the radar. There's nothing being permitted.

There's— the only thing that's happening in terms of diversifying is the expansion of Bradley Lake, which will offset 1.5 BCF out of a demand in the inlet of 70. So that's great. But anything else that we do, especially with wind and solar, which are nothing more than interruptible fuel savers. I could put hundreds of millions. I could eliminate all equity in my utility and build those things.

And on a cold day, if there's no sun and the turbines aren't moving, the cost of battery storage, the scale of that that we have looked at It just comes down to common sense, folks. It's just common sense. We need to do something. Let's not repeat the cycle 2 times before where we were closed for business and people went away. Viability is building the North Slope gas pipeline.

MEA is still going to focus on its diversification goals. Our analysis shows that one of the renewable portfolio standards that that was introduced, and I think it was very poor legislation a few years ago. It had all kinds of fines in it. At one point, it looked like if I couldn't make the target, I was gonna have to raise rates, $30-some million just to pay fines. Um, okay, so that changed.

That's fine. But at 80% renewable, my 6 BCF of gas that I need every year is 3 BCF. So I'm on a parallel path where I absolutely have to have gas. There's billions in infrastructure and gas. The pipelines encircle the inlet.

The service lines to, to, to all the homes for the majority of the population are, are in place. Let's not waste that infrastructure. Let's, let's get this thing built so that we can then take the deep breath. We can eliminate the uncertainty around reliability. Take that out of the equation.

And focus on the prudency of diversifying energy portfolios, which are going to take, you know, more than 10 to 15 years. Thank you so much for the opportunity.

All right. Well, Tony, we really appreciate it. Mr. Izzo, thank you for your insight there. We are now going to Joe Balash from Santos. Appreciate your being here.

He's the— would you go ahead and give us your name and start your testimony? Thank you. Thank you, Senator Rauscher and Representative Costello, for convening us here today. To be clear, I'm here representing the Resource Development Council. I'm the incoming president, and our executive director was traveling today, unable to to join either electronically or in person.

So the Resource Development Council represents 5 pillars of Alaska's resource development economy and industries. That's mining, fishing, timber, and tourism, and oil and gas.

And, you know, something that I have in common with the Resource Development Council is it was established in 1975. The year of my birth. And it was founded to support commercialization of North Slope natural gas. 51 Years. Been at this a while.

And, you know, our members comprise 400 businesses. We have Alaska Native corporations. We have organized labor. We have local governments and individual Alaskans as the membership of the Resource Development Council. I think we represent a very broad set of perspectives at RDC.

And when the legislation was introduced earlier this year, it took some hard conversations inside our organization to make sure that we were aligned. Because many of our companies have very close relationships with the communities that will be impacted by construction of a very large project. And it was—. It was not easy, but we came around to line up on some very significant principles that would make sure any legislation addressed community impacts and that would maintain a predictable and competitive framework that would allow the project to move forward expeditiously. We are at that point.

We know what the answers are. Everybody around here knows what those answers are. The problem is the poison pills. And we all know what those are. RDC stands in opposition along with our other trade association partners to the— unvetted, easily challenged legally provisions that have been offered more often in social media than in committee hearing for vetting.

So, one of the benefits of going last is a lot of what needed to be said has already been said. I don't need my full 5 minutes. The last thing I would say is We have unprecedented support for this project, and I am not talking about a governor. Every governor since Prudhoe Bay was discovered has supported commercializing North Slope natural gas. I'm talking about the highest office in this land.

It is an opportunity that we have, and we as Alaskans should not squander. So, there are no good reasons for failure. Thank you for the opportunity.

All right, thank you very much. So, uh, on Teams, we have, uh, in a kind of a wrap-up, he'd like to speak to us again, uh, this time in person, is, uh, our Governor, uh, Mike Dunleavy.

Mike, are you there? If you are, can you unmute?

Senator— Governor Dunleavy.

We'll take a brief at ease.

Governor Dunleavy, are you there with us?

Chairman Rauscher, can you hear me now? Yes, we can hear you. Please, please go right ahead. Thank you.

Okay, great. Hey, thank you, everybody. And I've been following the conversation. I want to thank chairs, Chairman Rauscher and Chairman Costello, and all the participants. And I just want to take a couple minutes to kind of hopefully wrap this up, put a little bow on it.

I want to also thank, as I mentioned, all the participants there. I want to thank Hilcorp, HEC, all the utilities, Santos, Enstar, all the folks trying to bring energy to Alaska, trying to bring energy to Alaskans. And helping our bottom line as a state with revenue, our economy with jobs, etc. Over the last several years since I came into office, there has been a tremendous amount of investment in the state of Alaska, billions of dollars on our oil and gas side of our economy. And quite frankly, a combination of oil and gas as well as some logistics.

I mean, our GDP has grown by billions of dollars since I came into office.. And we are a resource state. And so again, I want to thank you all for what you're doing. I want to give a short— I hope it's short— a short emphasis again on do we really have an issue and why are we just hearing about this now, some would say. Well, let's go back in time a little bit.

So in the late 1990s, most of Cook Inlet's large gas fields, they were already discovered before the '70s. And new discoveries were becoming smaller and less frequent while production from legacy fields declined. 2001, 25 Years ago, Agrium, Agrium's last full capacity operating year, that's the fertilizer plant down in the Kiskee, and Agrium stated that 2001 was the last year it could run at full production because gas availability and pricing began to deteriorate for going forward. 2002, Gas shortages become evident. You know, there were multiple studies done in 2002, uh, uh, when, uh, cooking with gas became, uh, insufficient for doing business as usual.

2004, There was a gas study, South Central Natural Gas study, that warned proven reserves represented only, only about 9 years of supply. That was 2004. The report also noted that 95% of cooking with gas had been discovered once again before the '70s. Um, and then 2006, industrial gas consumption reduced. Agri once again substantially reduced operations because adequate affordable gas contracts could not be secured.

In '07, the plant closes.

In 2009, 2010, utilities warned of future shortages. If you remember the brownout commercials with the mayors of Anchorage and the mayors of Mat-Su, Kenai, et cetera, that's when this occurred, warning us that we're running out of gas. 2009, 2010, That's 16 years ago, 17 years ago. Uh, 2011, the, uh, the Kenai LNG export plant that was sending gas to Japan since the late '60s announced that it was going to close. 2000, Uh, in 2015, that was the end of LNG exports.

So all these warning bells, all these reports, everyone talking about the shortages, uh, this goes back some time. 2018, Uh, Alaska, there was a supply forecast. Alaska's projected Cook Inlet, uh, could meet demand only until roughly around 2030 was a report that came on at that point. 2022, Hilcorp, uh, announced that it could not renew long-term utility contracts beyond existing commitments. 2024-25, Uh, we had legislative briefings that had shown that the demand had fallen dramatically.

Uh, after fertilizer plant LNG exports ended, and those discussions continue today. So we have a long timeline of being warned that we were going to have issues with our gas supply at Cook Inlet. I also want to go and talk and just take a moment and talk about the momentum that this project has. What people don't realize is really this project really took off in 2020 because that's when we got our permits. In 2021, Alaska LNG received the FERC authorization and 35 other major permits.

So starting in 2021, going until today, this is when the momentum really takes off once again. We get a private concern, Glenfarm, that's willing to take on the project. We have discussions with our utilities going out as to how they will interact with, uh, with Glenfarm once we get gas going. We have Baker Hughes and POSCO joined as strategic partners. There are a series of not just letter of intents, but I believe, uh, I believe soon there's going to be HOAs signed that are hard agreements with some off-takers.

Um, you have the President of the United States that gets on board to get behind this project because he knows the strategic location of Alaska can deliver gas to Asian allies, helping to underwrite gas and energy in those Asian countries for our bases that are located there. You know, most importantly, gas for Alaskans, gas for our bases, gas for our hospitals, gas for our schools, and really gas for our residents. We also had momentum because of the Russian war with Ukraine that really disrupted the gas and oil world. And then, of course, the Straits of Hormuz, which is the center for all intents and purposes of gas and oil historically worldwide. So a lot of momentum behind us.

Now, some have also asked, why don't we just import gas? Just import gas from Texas. It's $2.20 or whatever it is on Henry Hub. Well, the reality is we can't, because for all intents and purposes, again, we don't have America does not really have LNG, LNG tankers that are flagged as American tankers. So that gas would have to go on foreign carriers, which the Jones Act does not allow us to do and bring energy to Alaska out of Texas or any other state.

So that leads us to get gas off of the Japan-Korean market, which is the international market. And I think as some of the panelists mentioned, that's at $20, $22 a unit.. And the chances are if the Straits of Hormuz continue to smolder for some time, that price may not come down.

And so where we are today is we do have a real gas crisis in Alaska. Unlike other states, we cannot wield in power. It'd be one thing if this was Iowa and they ran out of gas. This wouldn't even be a discussion because they'd be bringing in power from several other states. We're not connected to the grid with Canada or the rest of the United States.

So we're on— we're on our own. We have the gas on the slope. We know we have trillions of cubic feet of gas. It's been proven. Again, we have all the right-of-ways for this project.

We have investors lining up to be part of this project. We have the need in-state for this project. Our Asian allies have the need for gas worldwide for the reasons I laid out. Our bases have the need for this gas. So we have a shortage, but we have an answer.

Again, I want to emphasize, and I want to thank the businesses doing work in Cook Inlet extracting more and more gas. Again, we mentioned Tilcorp, we mentioned Hex and John Henderson's there. We all know John. And there's other outfits there trying to get gas out. And they will be able to produce gas for some time.

But with the pipeline, you get enormous amounts of gas, which will lower the cost of gas for Alaskans over time. With the pipeline, you get export of gas, which brings revenue to the state of Alaska. With the gas line, you open up business opportunities that Alaska really has not seen like other states. You know, we don't have interstates running through our state. We're not connected to the lower 48, which, you know, removes us from some distance to those markets.

So things are expensive here. We have enormous resources, but population-wise, small scale. So it makes these mega projects challenging.

And then finally, like I mentioned earlier, we have a private concern, Glenfarm, that is, that is more than interested in making this happen. And so this is where we're at today. We are working with the legislature, and I want to thank the legislature, and I want to thank legislative leadership that worked on this bill. They worked months and months on this bill. We believe the gas side of this bill is in pretty good shape.

There will always be discussions about tweaks going forward, going forward, so forth and so on. This gas line will not be built tomorrow if the bill was passed today. We know that. But what it does is it keeps that momentum going. It keeps the project moving forward.

It allows Glenfarm and other partners and our off-takers to really see that Alaska is behind this project. And I think we're really, really close, and I, I'm being sincere. I know people have said, well, you've said that before. I do. I, I think we're really close to coming to an agreement.

I think there's a tweak or two, uh, that, uh, we're having, uh, uh, quiet discussions with legislative leadership, uh, over the last several days. They— building upon, I think, the great work they did on the gas side, the property tax side of this Bill. And so I would just, I would just encourage everyone to understand where we are with gas. It's real. The shortage is real.

Why don't we just put together a dam or renewables? Even on a great day, that is going to be years and years and years off. Why don't we wield in power? We can't. We're not connected to the grid.

We have to produce our own power. You know, you have to also give thought to what are the— what are our adversaries thinking? The Chinese, the Russians, the North Koreans, they read the newspapers too. They know that we have a gas shortage, and they know that I have had to talk to the base a couple years ago when we had a very cold winter to literally unplug your coffee makers, unplug your copiers so we could get through that cold spell. And then we had last year, which we had record cold, under 32 degrees in Fairbanks, Alaska, consecutive days.

I forget exactly how many there were, but it was a long period of cold. We had cold snaps in December. We had a very cold January in South Central. We have had a cool spring. And so I don't think utilities and I don't think the customers are crying wolf because this has gone back many decades.

We've been having this discussion. So I would say that I think we're in positive discussions with the executive, my office and myself, positive discussions with the legislature, key players in the legislature, and I'm optimistic that we can come to an agreement that gets enough votes to get around a bill and put this behind us so that we can continue with this momentum, get on to other work, and continue to build Alaska out. So I want to thank all of you for being part of this Gas Line Caucus meeting. I think it highlights the work that's been done, the issues that we have, but also the solutions that lie before us. And again, I think we're very close to an agreement.

So I want to thank you once again, Chairman Rauscher and Chairman Costello, for having this, having this hearing. And I want to thank all the panelists that came. And in my opinion spoke the truth as to where we're at. We have a problem, but we have a solution.

And again, I want to thank everyone, and let's just keep pushing this ahead. Thank you very much. Thank you, Governor. We really appreciate both the video and you calling in with your, your personal comments. We also want to thank all of the panelists, appreciate you taking time to be here today to share with the public.

The status and your position and views on this very critical project that's before us. I want to also thank the legislators that were here in attendance and participated online. Also the folks at the LIO and our staff that helped make this Gas Line Caucus listening session possible today. Senator Rauscher, do you have any final comments? I just appreciate everybody that attended today.

I know you have busy schedules. I know that this was a bit of an out of the way for some of you, but I appreciate the fact that you were here. A lot of questions have been answered that people have asked us over the summer, and we appreciate the fact that you were able to answer them. Thank you all again for coming, and thank you for my colleagues behind us. Thank you.

Thank you. And with that, we are adjourned.