By Dan Fiorucci
6:58 PM AKDT, April 16, 2012
Gov. Sean Parnell's call for a special session has stopped Legislature staffers who were packing boxes inside the State Capitol Monday. Instead, they're now settling in for what could be a long, contentious 30 days.
After watching three important pieces of legislation fail to pass in the Legislature's final hours, Parnell made a 1 a.m. phone call to House and Senate leaders to inform them he was calling a special session.
A special session gives lawmakers up to 30 additional days to try to find common ground on issues that have divided them -- but why should a special session solve what the regular session has not?
Rep. Craig Johnson (R-Anchorage) probably summed it up best. He said it "narrows the focus" to just a few, important issues. When that happens, there can be less horse-trading -- and more productive discussions on the topics brought up by the governor.
Parnell has told lawmakers he wants them to reach agreement on three important issues: human trafficking, a small-diameter natural gas pipeline and oil-tax reform.
Of the three, it looked as though human trafficking would be the easiest one for lawmakers to resolve, as there seems to be general agreement inside the Capitol on how to deal with it. Among those solutions: tougher laws for the pimps who pressure young women into prostitution.
It's not clear just how pervasive human trafficking is in Alaska. Parnell has said he's seen evidence of women being sent out from Anchorage to remote rural villages, where they tantalize young women with dreams of an exotic life in a big city, offering gifts like makeup and free transportation. It's all aimed at luring innocent girls with few prospects into a place where they no longer have control of their lives -- and can then be forced into prostitution.
The other two issues dividing Alaska lawmakers, however, have fewer clear-cut solutions.
One of those problems is whether to build a small-diameter natural gas pipeline from the North Slope. Such a pipeline seems attractive to House Republicans in part because there are 35 trillion cubic feet of "stranded" natural gas on the North Slope -- one of the richest deposits in all of North America.
Although Alaska sits on this embarrassment of riches, towns like Fairbanks struggle with home heating prices that have nearly doubled over the past few years. If an abundant source of natural gas could be delivered to those homes and to other remote areas of the state, it could make living in the Interior much more affordable.
The problem is this. If you build a small-diameter gas pipeline from the North Slope, the pipeline has little economy of scale. The natural gas it would deliver could cost $14 per 1,000 cubic feet, versus the going rate in the Lower 48 of $2 per 1,000 cubic feet -- one seventh the price.
Many lawmakers argue in favor of building a natural gas pipeline the other way -- from Cook Inlet, northward to Fairbanks. That would deliver cheaper natural gas to Fairbanks, largely because infrastructure is already in place to deliver gas from Cook Inlet versus the North Slope.
The only question is whether Cook Inlet has enough natural gas for that plan to work. The U.S. Geological Survey has estimated that the inlet has an astonishing 19 trillion cubic feet of undiscovered natural gas. If that's so, it could supply both Anchorage and Fairbanks with all the gas the cities need (at current rates of production) for 200 years.
No one knows, however, if the USGS estimates are accurate. Exploratory drilling to begin confirming those estimates is scheduled to start this summer.
Then there is the issue of oil tax reform.
Many lawmakers are concerned because the North Slope, like any "elephant field" in the world, has experienced decline over the decades, from pumping 2 million barrels of oil a day down to Valdez to only about 585,000 barrels a day today.
While there's consensus that tax stimulus can help refill the pipeline, lawmakers have differed all session on what shape that stimulus should take.
Almost everyone is willing to boost exploration by cutting taxes on oil from new discoveries on the North Slope, outside of existing fields, by 30 percent.
The disagreement comes over what should be done with existing fields: Parnell, along with the state House majority, would like to extend the same tax break to all oil fields. Many Democrats, as well as the bipartisan Senate majority, call extending the 30-percent tax break to existing fields a giveaway and argue for a smaller reduction to stimulate production -- not a larger break meant to reward new finds.
With three tough topics in the air, one thing is certain: the clock is ticking. On Wednesday, lawmakers will get down to the serious business of trying to determine the energy future of Alaska, and how to crack down on a crime that is ruining the lives of young people.
By this time next month, we'll know whether they've met with success.
Email Dan Fiorucci
Copyright © 2013, KTUU-TV