Okay, thanks, I don't mean.
I call Senate Resources Committee order to order.
Today is Friday, February, excuse me, January 23rd, 2026, and the time is 3.30 p.m.
So welcome everyone to our first meeting of the year.
Committee members present today, we have Senator Rouscher.
Senator Meyer is here.
Senator Dunbar is excused.
Senator Clayman, Senator Kawasaki.
Vice Chair Senator Wilakowski and myself Senator Geese.
So we have a quorum to conduct business.
Recording secretary today is Heather, and helping us out with the audio today, is Jude.
On the agenda today we are three subjects.
The first one is Senate Bill 75, timber management leases.
Then we'll go into a presentation by Pegasus.
Global holdings and lastly a presentation from Gaffney Klein.
So I'm starting out with Senate Bill 75.
I've gotten several emails in the past 15 or 20 minutes from people who have serious concerns about this piece of legislation.
It is offered by the governor related to timber management leases.
I made a commitment to the Governor.
He urgently requested that this bill be heard and moved.
I can fulfill my commitment 50%.
I will have some testimony on the bill today, one person,
invite a testimony, and then we'll set the Bill aside.
So, I'm inviting Senator Jesse Bjorkman forward.
Welcome, Senator Bjarkman.
Senator Bierkman?
will not have this bill in any of his committees.
He has a lot of state land and state timber resources
on the Kenai Peninsula in his district,
and he had some concerns.
I wanted to give him a venue to express it.
I also want to welcome Senator Stedman,
who's watching the committee today.
Welcome, Senator Steadman.
In the past,
Senator Steinman has been part of this committee,
but in the last few years,
he's been busy on finance.
Welcome, Senator Bierkman, welcome.
Senator Giesel, thank you for this opportunity and for hearing the bill.
As we look at and consider the hearing that you all held back in February of last year on
this bill, I think it's important that as a state, the Department of Natural Resources,
and the legislature, and ultimately the people of Alaska, they understand the vision of what's
happening with our public lands. And they understood that we value public
fishing and hunting, recreation, hiking, camping, all of those things are extremely important to our
way of life as Alaskans. And I think that that vision needs to be retained and clarified as we
talk about what timberland leasing means for the department in state forests as this bill is
a rollout of a state force proposal by DNR on the Kenai Peninsula that I think
could have gone better in a number of ways and I
think largely it could've gone
better because of communication over what the vision of state forests are and
what they are not. Many people thought that a
state forest as as outlined in part of this bill which timber leases would would
of sorts and somehow a state park. That's not what they are. They are an ability for the state
to hold land in the public trust and allow access to continue while also reducing fire fuels
on the landscape while allowing for timber harvest while for allowing access that makes
putting fires out easier. All of those things are part and parcel to what happens on these public
are incorporated into state force or are simply just forested state land so I
would encourage the department and you as a committee to really explore this
vision of what it is that the Department and our Alaska economy needs from our
public land in order to move forward in a functional way what we've seen on the
Public land, mostly federal land but some state land burned by wildfire.
Those wildfires would be a lot easier to put out if we had active forest management,
thinning operations, roads, more access into ground so that we could put fires out before
they become conflagrations that are absolutely unstoppable.
allow those things to happen, and I think as we look at these issues of what our vision is and
what are access issues are, we need to keep those at the forefront. Also, I
think it is important to have, this bill might be an appropriate tool or another,
to really uniform vision and expectation for the public of access and what happens with our public
Right now we have some public lands that are trust lands and those trust
lands those people who are in charge of managing trust
lands are very eager to tell you well those aren't actually public
lands. I think that that idea although technically
correct in the public eye is largely baloney
respectfully madam chair. We have trust plans that
those lands are owned by the government and we the people are our government.
That's who we all are responsible for. So I think there would be a lot to be said and a
lot of public trust to being gained if the public were absolutely guaranteed public access
to trust lands. As we go forward and look at these ideas and think about what it means to have
I think it's important to build in safeguards on public access, as well as making people
aware of the benefits of The Forest Resources and Practices Act, and the Senator behind
me's district on Gravina Island, I believe you can see clear examples of this.
And I thing the department would be very well served if they could look at different
ways that forests are harvested based on whether or not the land user has to follow the forest resources and practices act or
not. On Gravina you have three types of land. You have the federal land, the Tongass forest.
You also have a southeast state forest and you
have little bit of trust land that's owned by the university. How that landscape looks on those three
types land is vastly different because I believe, and I could be wrong, but I think that
they have to follow different rules.
This in itself is a bill that does a few different things.
It allows for active management of the forest
which reduces fire risk and reduces the ability
for bugs like spruce bark beetles to damage the forests.
It also would provide active forest management
additional habitat for wildlife and make our forest healthier.
What it does not do and what it should not
are it should not restrict access, and it
should allow for devastation of the landscape.
Like we see on some landscapes that
are logged in our state, but others, we don't,
because it follows the Forest Resources Practices Act.
So thank you for this time.
I very much appreciate that.
The conjecture around some of this bill to speed it through in less than two weeks is not going to happen
I think it's worth more consideration than that, but I appreciate your your attention as committee. Thank you
Thank You senator Bierkman
He'll be around if committee members have any questions
About his testimony today. So with that I'm gonna set Senate bill 75 aside
So moving on we are going here from Pegasus global
holdings incorporated now.
Pegasus, committee members have in their packet, the report that Pegasus prepared for us,
it is dated 2019, and they were asked actually by Senator Stedman at that time to review
what were the errors that were made, what
were things that the state could have done better,
the project itself was grossly over ran over estimates,
over cost.
So what could we have been better?
And so that's what I've asked Pegasus to present to us today
Another mega project, that being a gas pipeline.
So I would welcome today our two speakers.
We have Jeremy Clark, who is the chief operating officer.
We've Joe Miller,
who was the president and CEO,
and we have Andrew, pardon me,
just those two gentlemen, Jeremy and Joe.
Welcome, gentlemen.
Thank you.
I'll let you go ahead and proceed with your presentation.
Sure.
I see you have it up on the screen there.
Would you like me to control it through teams?
Or do you someone in the room there to navigate the slides?
My staff will control the sides.
Perfect.
Yeah, thank you again for having us today.
My name is Jeremy Clark and I'm joined by Joe Miller,
our president, CEO.
Many of you are likely familiar with us from our presentation last spring or from
our 2019 report, but for those less familiar, I'll provide a brief background on our firm.
Pegasus Global provides expert advice and solutions on the planning and delivery of
complex construction projects throughout the world.
Our experience on mega projects has allowed us to see the good,
bad, and ugly of delivering these extremely large and unique projects.
We leverage this experience to empower our clients with the strategic knowledge and expertise needed to successfully avoid unnecessary issues, increase efficiencies,
manage risk and minimize disputes that are often associated with mega projects.
Today, our presentation reiterates much of our 2019 report content covering common issues associated
Also, review issues encountered in less than seven from the TAPs and strategic reconfiguration projects that remain relevant today before closing out with the discussion on the Alaska LNG project status.
Go ahead and jump to the next slide, please.
In 2019, we issued a report to
the last state legislature that featured a discussion, all the challenges associated with mega project execution, including specific examples from The TAPS Project.
With federal momentum returning to the Alaska LNG project last year,
we are invited last April to present the findings from our 2019 report to
the legislature. As we noted in our presentation last spring,
the challenges and issues raised in
our 2018 report are still very applicable to
the project today, which we'll discuss as we continue this presentation.
Next slide, please.
is a mega project most if not all of you have likely heard the term before in essence it is an
extremely large and unique project with many complexities and interfaces some of the other
characteristics you'll see on the slide here it cost over a billion dollars multi-year construction
With their large size and many complexities, megaprojects naturally face execution challenges
above and beyond typical projects.
An overarching driver to the challenges faced by megabrojics is their long timeline from
initiation through planning to execution and delivery of the projects and consider
the timeline on the Alaska LNG project, which was effectively initiated with the passage
12 years later, and we're now nearing a FID for phase one of the project.
These extended timelines of mega projects lead to additional risks both in the difficulty of planning and estimating future conditions
and through the increased exposure to black swan type events.
Beyond the immediate direct impact of a realized risk,
mega-projects typically have higher exposure
to ripple effects across the projects from these risks, which we'll explain in a bit.
So, here are some examples of LNG project risks with the major risk category there on
the left and then risk factors associated with each underneath, and you'll see the
major categories cover economics, design, procurement, construction and other key functions
that support the delivery of the project.
Often, there's a heightened focus on the Project Execution-related issues like design
particularly as the project advances to the execution phase,
but all risk categories must be considered and addressed.
Next slide, please.
Here, we talked about the ripple effects
that can impact the projects beyond
the immediate effect of the risk itself,
and the slide shows you the realize risk on the left,
the media impact in the center there,
and then the Ripple impacts on
Notably, each of these examples includes a slip to the schedule as a ripple effect.
Schedule slips naturally have an associated cost impact as well.
And additionally, due to that project environment, scheduled delays may have additional impacts
if the work pushes out of a favorable execution window.
There are activities that were planned in the summer that get shifted into the winter
being a prime example with lower productivity and more weather events coming of course in
the Winter.
Could you pause, Mr. Clark, for a moment, just on that point, of course, in Alaska, our
construction season is the winter, typically, right, with our permafrost and so forth.
But pause for just one second.
I want to see if any committee members have questions at this point.
All right.
See.
Yes.
Senator Willakowski.
Well, fundamentally is, I don't know if they're how prepared they are to answer questions
general in nature because a question I have about this particular project is who ultimately one question is
Who ultimately bears the downside risk if costs rise or markets soften?
I don't know how familiar you are with what's going on and maybe that's more appropriate for Gaffney and Klein
Yeah, I'm sorry I had a little difficulties here in the question there the questions who
In this project who ultimately bears the downside risk if costs rise or markets soften
If
Who bears, the down side risk? If the market changes was at the yes question
At this point, I don't think that we have enough information to fully determine that it would ultimately be all stakeholders involved in the project would have some degree of exposure
with the various contracts and agreements kind of defining you ultimately as that exposure.
Follow-up.
Follow up.
Senator Wilkowski.
If so, what we've heard is that the project costs will remain confidential
and I'm curious your perspective on that because we have an obligation to
I'm curious if you have any thoughts or ideas
on how we can protect the state and the rate payers
when the costs are confidential
and we don't even know what they will be.
It's a extremely unique situation.
I can't recall being involved in a project
where the cost were kept confidential.
Joe, I don' t know if he had other experience on that.
No, i've not seen that before.
Any follow-up?
Yeah, certainly very unusual.
Thank you, any follow up, Senator Wieckowski?
All right, other questions?
Seeing none, I'll let you proceed, Mr. Clark.
Thank You.
Here, as a result of those mega project challenges
we've discussed, it's very common
for mega projects to go over budget,
beyond schedule and have variations
in their delivered benefits.
Despite those challenges, completed mega projects generally still provide their
intended benefits, even at a higher cost than planned.
The VOGO nuclear project in Georgia is a prime example.
The project encountered a variety of challenges from COVID-19 to the bankruptcy of a key project
partner. This is the first deployment of advanced nuclear reactor technologies in the U.S.
and involved rebuilding the domestic nuclear industry after decades of inactivity.
Thank the project at around 14 billion with final cost of over 36 billion as well as it taking
seven years longer than initially planned to complete. However, despite all those issues,
it now provides over 2,000 megawatts of reliable electricity and enough to power over two million
homes which will continue to operate for another 60 to 80 years. Next slide please.
So, who pays for the project cost overruns, so we hinted at this earlier.
The highest level of the projects owner, main contractors, and end-users collectively each
have exposure to the Project Cost overrun, between the owner and contractors.
The construction contracts provide the mechanism for which cost over runs are allocated,
and between owner-end-user toy and agreement similarly provide mechanism to which costs
We've had some experience on the trans-mountain expansion project in Canada where they utilized
capped and uncapped segments of the pipeline in their towing agreement.
With the cap sections included in the picks tool, but can't exceed the cost cap,
which limits the exposure of cost overruns to the shippers in these areas while the project owners since the risk.
Well, the uncapspreds involved.
They recognized
and heightened risk and uncertainty in these specific areas that involve construction through
mountainous regions and urban areas with these costs fully recover both from the shippers.
Of course contracts and agreements can vary widely in their quality and ability to
appropriately address project needs and issues, but that is the typical mechanism to
These are contracting approaches under EPC and ETCM arrangements.
The contracting methodology should match the needs of the project
and its environment that considers risks, regulations
and the experience and capabilities of partners.
The increased collaboration under Alliance and collaborative agreements.
is supported through establishing common objectives and clear risk sharing in addition to the owner engineer and contractor working under a one-team approach.
And maximum alignment is achieved through an integrated project delivery methodology that involves early engagement of all key project partners through a multi-party contract.
Integrating the people processes and structures of those parties while also aligning the interests of the partners and includes.
along with all participants collectively sharing
in the outcomes of the project cost
and schedule performance.
Mr. Clark, before you move on,
could you translate the two acronyms
at the heading of this slide?
Oh, sure, yes.
EPC is just engineer procuring constructs
and EBCM is engineer per cur and construction management.
Those are typically the contracts you'll see
vendors that are engaged to deliver mega projects.
Thank you. A question from Senator Wilakowski. So we put that in this particular project.
The lender has the exposure of cost overruns. Is this something that's common in these sort
of agreements? It's not unheard of, but usually there is a balance.
I don't think it's typical for 100% of the costs
to be allocated to a given party.
Usually there's a bit of nuance within those agreements.
Follow up?
All right, thank you.
And I didn't see any other questions.
I'll let you proceed, Mr. Clark.
Sure.
Next slide, please.
So some considerations on the construction contracting.
Ideally, the contracting approach should support the strategic vision of the project
owners while providing alignment amongst the parties and allowing adaptation to the complexities
and uncertainties.
Risk allocation should be clear and consistent with risks assigned to party best in position
to manage or mitigate the risk.
Risk management efforts must also remain robust throughout the planning and execution
with live participation among project partners.
integrated project delivery methodology that we showed on that last slide. Those have been
applied often on large and complex first-of-a-kind type projects as it incentivizes the
parties to work together to minimize risk and streamline decision-making. It also reduces
construction risk primarily through its core principles of early engagement of key stakeholders
shirt financial incentives and a no-blame culture of open communication among key stakeholders
Next slide, please. Mr. Clark, um, Senator Myers. Senator Meyers has a question
And thank you madam chair. So, mr. Clarke, I'm seeing your your statements at risk should be assigned to the party best able to manage it or mitigate it
that
concerns me a little bit that I would think that you should under most circumstances you assign risk
to the party, most likely to cause it.
Otherwise, you start to go up with some perverse incentives
where I can do some things that benefit me
and cause risk for others.
What's your feeling on that?
In our experience, it is common practice
for risks to be allocated to a party that is best
in position to manage it as they would
the risk and the impacts you typically would want to see and that's where you
would like to have more of that collaborative type agreement where the
parties have alignment on their not only on the objectives but on
the views of risks which we've seen on some projects where
the owner and contractor use a shared risk register so everybody has a the
common view and a share understanding of the risks and agrees on
So that might be one approach there where you, you know,
you assign the risk mitigation to the party best responsible
to manage your mitigative, but collectively you're all involved
in that risk management exercise.
Okay.
Senator Clayman has a question.
I need to follow up on the question or the comments you just made.
It seems like the confidentiality of so much of the.
Alaska LNG project makes it very difficult for us as folks representing the public
to understand how those risks are being balanced down. I mean certainly we don't
understand the state's risk, but if there's say three major parties to the
agreement, how can we understand
how the risk is being allocated if it's all confidential?
That is a very rare question, and that was one of our open questions.
You know, there's a lot of information and data that would typically be available.
If not publicly, at least to the key stakeholders that we just haven't seen at this point.
So that is certainly a valid question.
Follow up.
Follow ups and you're claiming.
If I were a lending institution thinking of lending billions of dollars to a project of this size,
the lending institutions would get, because of confidentiality agreements that would be applying
to the Lending Institution, I would have full access to that confidential information and how
those risks were being allocated. I guess partly to me as the lender would
be one of the people in that risk, but I'd have access
You know, I think it's common for certain information to be, you know
not in the public domain, there would be confidential and proprietary and
competitive information in contracts as an example that might be redacted, but
it would unusual for significant amount of information not to
be made available in this kind of situation to the
public or at least the legislature in
this case.
Senator Willakowski follow-up on that question so what one of the things that we have been told that
will be asked to legislate is some sort of reduction in municipal tax rates and
What's sorta and that's going to be a challenge if we don't know the numbers are the are that?
Are the rates are we being asked to give tax concessions to make the project viable or to just
increase investor profits? What sort of information would you advise that we know in order to
make that analysis? You know, ideally it would be nice to have access to the same economic model
that Glenn Farne is using so that the parties are all working off the saying song sheet.
And they see all the same variables, the
same assumptions.
And then you typically do sensitivity analysis
to see how the economics move with various things,
such as property tax, like you mentioned.
And so definitely access to information
is extremely important in this situation
to evaluate this on behalf of Alaskans.
Follow-up, Senator Wilakowski.
And we find ourselves a lot in this position a
lot when dealing with oil and gas issues.
And if we don't get that information,
would you advise that we just trust them
and just make whatever tax cuts they ask for?
That would be difficult to advise you to do that
in that situation.
You know, I'm gonna follow up.
on this line of questioning, and this is somewhat a flag for Mr. Fulford from Gaffney Klein,
who will be coming up shortly. The project right now is 75% owned by Glenfarn,
but 25% of it is owned 8 star. So is 8-star party to these confidential documents,
We've had hearings, but we've not had eight star before us in legislative budget and audit committee hearings.
And I think we need to ask Mr. Falford when he comes forward.
First of all, who are these people and are they getting the confidential information?
And are those supposed to be representing the state?
So we can explore this a bit more, I believe, when Gaffney Klein comes
forward?
Any other questions at this time?
All right, we'll move on.
Thank you, Mr. Clark.
You'd move onto your next slide.
Sure, thank you.
This looks at the common pre-execution phases
of an LNG project.
Typically, oil and gas and other infrastructure projects
advance through multiple planning and development phases
that increase project definition and estimate accuracy
before the final investment decision is made.
with a stage or phase gate milestone for each that allows a thorough review of the project status
and deliverables by senior management and other stakeholders before approval to proceed to the
next stage of development. FEL0 starts things off with the identification of
the business opportunity and high level solutions with rough cost and schedule estimate and an
FEL1 further explores and evaluates the option to realize the opportunity with a preferred solution identified, feasibility confirmed, and more refined cost and schedule estimates, leading to around plus or minus 30% accuracy.
FFL2 further refines the selected option, defining the technical scope and boundaries, developing initial execution strategies, preliminary designs, detailed strategies to develop.
to address identified risks and an updated
cost and schedule estimate with around a plus or minus 20
to 25% accuracy.
Lastly, the FEL3 and feed phase where the project's
development is finalized and prepared for execution.
This includes detailed engineering, fully developed
scopes, contracts for key equipment and material
and a final cost-and-schedule estimate to support the
FID and serve as a baseline for monitoring performance.
With the FEL3 heat phase, it is typically includes the development of what the industry
refers to as a class 3 estimate with an expected accuracy range around plus or minus 10 to
15 percent.
For pipeline projects, the class three estimate is based on project definition deliverables
that include pleated hydraulic studies, completed geotechnical studies.
pipes, coatings, valves, and crossings to find,
long-leaf pipe material quotes received,
all right-of-way title holders identified,
and around 10% to 40% of overall engineering complete.
So, Mr. Clark, a question.
So if we are told that final investment decision
for the public, that's FID, has been reached,
then that level of detail should have been achieved.
by the project manager.
Is that accurate?
Yep, that is a pretty common industry practice to have
your FID around a class three estimate,
and then there's different industry standards that define
what constitutes a classroom estimate.
What sort of inputs you need to
have to find to reach that level of definition?
Thank you, and could you tell me what the acronym FEL stands for?
That is front-end loading. It's an
industry term of art that
basically relates to the
early pre-execution planning and development phases. Thank You
Here's a question from cinder will a koski thank you
What happens if FID occurs before key regulatory or legislative processes are complete? Is that
common? I don't know that I'd say it's common, but it, when you, if you make your F.I.D. with
certain aspects, certain key aspects of the projects unknown, then once those become defined,
a significant influence to a project that could be positive or negative depending on what the
factors ultimately end up being. But at the end of the day, it's just another layer of uncertainty
that would be present when you commence the projects.
Follow-up. Follow up.
Followup, Senator Wilakowski. What project terms would effectively become locked in at final
The project terms, what you have looked to have a fairly developed scope with a lot of engineering and studies done to kind of support your plans and estimate.
We'll sign up contractors and other partners earlier
into the planning phase under a specific contract
for that planning face that is intended
to roll into execution phase.
So there's a lot of different ways
that it could be approached
in a lotta different kind of levels of completeness
that could present at a FID decision.
All right, I see no further questions.
I'll let you proceed, Mr. Clark.
Thank you.
Next slide, please.
So what we talked about the accuracy range of a class three estimate is roughly at a plus or minus 10 to 15 percent.
Specifically for the pipeline industry.
AC which provides these industry standards defines it at minus ten to minus 20 percent on the low end and plus 10 plus 30 on
the high end.
Guidance from AC.
provides that the expected accuracy range uses an 80% confidence level, meaning that based on all
the risk probabilities it's likely to be under that estimate 80 percent of the time. The accuracy
range is also directly influenced by several factors including project-specific characteristics,
robustness of planning and feasibility efforts, stakeholder pressure to maintain
Exposure to the systemic risks also relates to
the extended timeline of mega project development.
Given the multi-year development efforts ahead of execution,
it can be a particular challenge check or the forecast market,
economic, and geopolitical circumstances that are both volatile,
and have high impact on mega projects.
Next slide, please.
We covered several factors that can influence the accuracy of the estimate and related deliverables that support that final investment decision.
These are risks of delaying the FID itself.
Escalating project costs and market opportunity loss both relate to the changes in economic conditions that we have discussed.
Display chain disruptions from a delayed F ID can lead to missed delivery windows for long lead materials.
regular regulatory and permitting issues may arise when such approvals have
expiration or renewal dates tied to them. This may also lead to the need for
regulatory or permitting approvals under different administrations from what
initially approved them investors contractors and communities maybe
hasn't it to engage in the project if it is perceived as unstable or unlikely to
And the longer our project takes to execute,
the more likely there will be turnover
within the project team.
And within mega projects, it's a virtual certainty
there'll be a turnover in these key roles
due to the long duration of the projects.
This can result in a loss of key skills and knowledge,
if not appropriately prepared for,
it can also impact the morale of a team
Next slide, please.
I'm moving on to the TAPS projects.
Well constructed in the mid to late 70s, it's based many of the challenges that exist today for the Alaska project at LNG project.
The project, the taps project was obviously completed and has been operating for nearly 50 years.
It's a double in cost, and that's roughly $40 billion in today's dollars.
As you can see a GAO report on the project identified a number of site-specific challenges
encountered on The TAPS Project, which are also very applicable to the Alaska LNG project,
particularly the varying ground conditions and productivity in cold weather.
required scopes not in the initial estimate and adequate contingency and no
escalation within the estimate while also realizing a four-year delay to the
start of construction. This highlights the importance of having through
estimating processes including third-party reviews to validate the
estimate. It also raises the
importance the having robust risk estimates to inform the amount of
contingency included in those estimates.
Home and practice now is to use quantitative risk analyses to understand risk impacts on cost and schedule
Using a statistical analysis and simulations to forecast potential outcomes and provide competence in the estimate
Next slide, please
The GAO review of the TAPS projects identified several lessons learned that are relevant
to nearly all megaprojects, including the Alaska LNG project.
This includes incorporating as much project-specific data as feasible while also having
awareness of existing uncertainties and other risks.
It also leads to a stage or phase skates in the bullet on government approval,
Stage or phase gating refers to the specific defined points during a project's development,
usually around the completion of those progressive FBL phases.
They require a formal management review of the status around project performance,
business rationale, and project planning before advancing to next phase.
Next slide, please.
examined a FERC perdence review of the 2004 strategic reconfiguration project,
the involved installation of new pumps and upgraded technology to improve operations.
The previous review found an adequate upfront engineering design which contributed to an
inaccurate cost assessment, schedule and execution plan. The initial estimate for this project was
On the next slide, please.
Now, turning our attention to the Alaska LNG project itself.
This slide presents a very high level timeline from the passage of Senate Bill 138 in 2014,
a established the initial framework for North Slope Natural Gas Development
through the Initial Agreements and Changing Status of to Glenfarn's current advancement towards a FID.
We also saw that just yesterday, Glenfarn issued an update on phase one of the project that noted among other things they're targeting pipeline completion in 2028 and conditional words for the pipeline construction and pipes apply are in place as are the gas apply agreements.
Well, Glenn Farn has not yet disclosed updated project cost on this side panel there you can see how the public cost estimates have changed over the years.
Now, the most recent we found was just under $11 billion for phase one of the project.
You can also see the initial estimate had a wide range from $45 to $65 billion and using
a range of probable costs is an increasingly common practice, particularly for early cost
estimates that feature more uncertainty.
of those circumstances and risk events.
So using the range presents more realistic view
of the potential outcomes.
Mr. Clark, before you go on, to be fair,
phase one does not include an LNG export facility.
That's correct, yeah.
So that would account somewhat for the more economic cost.
But just a point.
Yeah, and I mean on that note, you know, the earlier cost estimates I haven't seen a
Well, I don't know that it was envisioned of a phase one and phase two
So we're not really sure, You know how it would have split to do that apples to apples comparison
All right, i don t tell you the questions. Oh, there is another question pardon me. Senator Wilkowski the phase 1 on this project is
as I understand it all
It's for all gas for Alaskans and so if the price estimate was instead of ten point eight billion dollars and say twenty billion
Dollars, I
Assume that they would just simply go and and increase the tariff is that that fair to say and in which case the the cost overruns
Would be born solely by the?
Consumers of Alaska is at your estimation of what would happen or would would Glenfarn and the equity owners of the lenders bear the bear
the costs
I would only have to assume at this point,
but I'd assume that the cost would probably be passed on
through the tariffs, would be my assumption on that.
I think the regulatory commission of Alaska
would have significant input there as well.
Good follow-up.
Do you.
Do you have any legislation that you recommend,
or would you expect that the RCA would just simply allow
a pass-through so that
the consumers would pick it up?
Yeah. That really goes
at having recommended any
legislation goes a bit beyond my personal expertise.
I don't know if you've other than say it.
What I've seen in states is statute language that addresses cost overruns in that case.
I have seen cases where there may be a target price of let's say $10 billion, but if it goes over that,
then the company would need to prove that those costs were incurred in a prudent and reasonable manner.
Very good. Thank you. I see no other questions.
I'll let you proceed to the next slide.
Thank You
And so as the Alaska L&D project continues on its latest phase of development with the project near the final investment decision
We've identified general areas where additional information and oversight could be beneficial to legislature
Most of these points concern the status and readiness of the Project planning efforts to support execution
as well as how phase two is being handled. We also identified additional questions from
Glenfarn's recent update. They noted that phase one may or may not include the 63-mile
point tops and lateral pipeline, suggesting at least some scope uncertainty remains.
The announcement also suggested but did not explicitly state the feed study was completed.
Please, one engineering work was sufficient to sport at ID and it also provided no update on
the final investment decision itself but did indicate the project is advancing from its development
to early execution phase. Next slide, please.
So with that, as the project advances, we've identified high-level recommendations relating
to the general oversight of the projects that would be beneficial to this state, particularly
if it retains the minority ownership position.
The first three bullets are generally one-off specific scopes that are intended to provide
an independent assessment of key project aspects that inform the FID and execution approach.
Well, the fourth bullet on independent monitoring for an advisory committee
Is a recurring effort typically performed throughout the execution of the project to assess and report on the projects status itself
And for which cost are usually paid for directly by the Project
And that concludes our presentation
Can open it up to any other questions or comments
Thank you
Committee members further questions
Senator Myers
Thank you, Madam Chair, so I
Have a question. I'm just not sure if these gentlemen are the correct ones to direct it to but
So maybe it's just a statement at this point, but we're suggesting a detailed review of the feed study and to Senator
Willakowski's point if
The feed studies a confidential document of going far
That's going to make it a little bit difficult for us to review it if possible and so I don't know what the solution is there
It's a very good question
The dilemma we're in absolutely I kind of like that last bullet that talks about an independent project monitor
But again if the information is confidential
Yes
This has been very helpful
Mr. Clark and Mr Miller I don't see any further questions at this time
But I appreciate you being available to us as a consultant as this goes forward
So, thank you very much for your presentation today
We'll be in touch. Thank you for having us.
Thank You. All right
All right, with that, and again, as I said, members of the committee have the Pegasus report in your materials.
And it is online at the website for this committee, which is resources.
The whole study, let me check that email address for the public.
It is senate.resources at AKLEG.
So you'll find those documents there.
So next up we're going to hear from the legislature's consultant, Gaffney Klein.
And here today in person is Nick Fulford.
He is the senior director of gas, LNG, and energy transitions at Gafney-Klein.
Yes, is Andrew Duncan.
He is the Director of Facilities and Costs
at Gaffney Klein Energy.
So welcome, Mr. Fulford, who's here in person.
So I'm speaking directly to you.
Mr Fulford, I don't know quite where you were going to begin
but I'll kind of start it out here.
You had forwarded to me a letter.
From it's actually on the stationary of Gaffney Klein and Baker Hughes members have it at their desks
And if it is not uploaded on website yet, it will be
But it addresses the topic of conflicts of interest and confidentiality
Do you wish to review this prior to your presentation?
Thank you, Jege Zor.
I think with your permission, I'd
like to offer a brief statement to the committee,
particularly in the light of some of the discussions that's
taken place.
So for the record, my name is Nicholas Fulford,
senior director at GAFT decline.
So before starting our presentation today,
I would like offer this brief statements really
about the scope of our studies, and in particular,
the measures that we take to ensure
that our analysis reports and recommendations
remain independent, objective, and reliable.
So as an energy consulting company with nearly 70 years
experience now in the industry, the integrity of our work,
it's a core requirement and obviously a competitive strength.
Since Gaffney-Cline was acquired by Baker Hughes back in 2008,
safeguards have been in place to ensure that client data,
project analysis carried out by Goffney Cline.
are restricted and accessible only to the gaff decline team members directly engaged on supporting
a client. So as the committee is aware, I think it was nine days prior to our first presentation on
the LNG project on November the 19th. Baker Hughes announced that it had entered into an agreement
So I'd like to emphasise that due to the established procedures and separation measures
we have in place, none of the GAFTIC line personnel responsible for preparing our report
or indeed conducting our analysis are involved in or are indeed aware of discussions between
Baker Hughes and Glenn Fahn.
No additional communications have occurred since that announcement.
Gaffney Klein affirms that the preparation of this report
and our presentation today has been conducted independently
and without any input or influence
from other business units or affiliates of Baker Hughes.
Moreover, no information contained in our study has
been shared with or derived from any other entity
within Baker Hues corporate group except
where expressly required under applicable law
or contractual terms.
Obviously, we've been working with the legislature many years now and given the reliance on our advice at this and other committees
Will you believe it's essential to be fully transparent about these circumstances?
And we welcome any questions that you might have
Regarding our work or processes or indeed the safeguards that ensure the independence and objectivity our analysis
So appreciate the opportunity to offer those comments
Thank you, mr. Faufford
Committee members any questions this has been uh they have the committee members have indicated
no questions so I'll proceed um this was a significant question that came forward when
we became aware of the um the ownership Baker Hughes holds over Gavney Klein. Mr. Fulford the
But, you know, when I go to the Baker Hughes website,
you're listed as senior director of gas, LNG,
with Baker Huse, and there's Gaffney Klein,
I'm having difficulty finding the separation here.
It's, I certainly know attorney,
though we have several sitting at the table,
but it's my understanding that there is a
responsibility on your part to make every effort to support the success of the owner
company that being Baker Hughes, who now is affiliated with Glenfarn,
who is 75% owner of our project. And so I'm struggling to
feel comfortable that there's actually a separation and that you are actually advising
us to the benefit of us versus bigger Hughes who owns you.
Thank you for your comments, Jay Geisel.
And it's certainly over the years, occasionally the world of Gaffney Klein and the World of
And, in those circumstances, clients quite rightly seek additional assurances in terms
of how data is being used and separated.
On occasions, we require additional constraints and separations to occur internally in
terms of where data's stored, et cetera.
And certainly, if this is one of those occasions now with the announced relationship between
further measures over and above the ones that were set out in our letter and the
ones I've talked about today I'm sure could be put in place. Ideally our goal
is to satisfy your requirements as a major client and obviously anything we
can do to help with that we will seek to put it in
place for you. I would definitely like to see in writing what those
but let me ask you if we consulted you for advice, perhaps on legislation that we're writing or whatnot,
and that question, you would be at a cross-roads of either advising us to the benefit of the state of Alaska
Where would you fall?
Would you give the advice to the state of Alaska
that would benefit the State of Alaskan?
Or would be supporting Baker Hughes
and the Glenfarn owners?
Where will that fall.
Thank you for those observations.
Chagizal.
I might draw a parallel with expert witness work that we do for international arbitrations
or courts where in those circumstances our clear duty is to provide objective independent
advice to the court or the arbitrator.
So that discipline around independence and objective advice is a thread that kind of
And, you know, there have been, for example,
there've been occasions where that expert witness work
has seen us being working against major clients
and so forth.
But ultimately, it's those guidelines governing
the independence and the objectiveness of our advice,
which is a core company value, if you like.
Gaffney Klein is a wholly owned subsidiary of Baker Hughes.
Since 2008, yes, Chaggyzel.
So, in that structure,
my understanding is that you have a fiduciary responsibility
to Baker Hues as an employee of Gafney Kline.
Correct?
I think the interpretation of my fiduciary duty is a tricky one to comment on in this
context.
Ultimately, the Gaffney-Cline business model and the way in which we are measured in Gafney
-cline is on our independent advisory work that we do with clients around the world.
And the value of that independent advice, because without it,
clearly, Gaffney Klein and ultimately the parent company would suffer.
Well, this is a pretty unique situation.
We have a mega project where the documentation, the fiscals,
the contracts, et cetera, everything is confidential.
And yet, your parent-company...
you are wholly owned subsidiary of, is part of that project and you're supposed to be advising us on
how best to
to
Get the best deal for the state of Alaska. This seems pretty complicated to me
The courts have ruled that a wholly-owned subsidiary has a unity of interest
with that entity, in other words, bigger hues and Gaffney Klein.
So I'm trying to feel confident that
faced with all this confidentiality and yet knowing that your parent company is
part of the documentation that's confidential from us,
that I am not quite sure how confident we can be in your advice.
Can you help me with it?
I really appreciate your concerns and your willingness
to open up the discussion today.
I think the nature of the dialogue is perhaps getting a little beyond my own sort
of area of expertise to be able to comment on.
My legal colleagues helped me with the basis of opinion
and the expressions of comments today, and I
think I should probably refer to them for any additional advice.
Very good. Well, I appreciate the fact that Gaffney Klein opened the conversation today by sending me the letter
You heard the concerns at the late
Legislative budget not a committee a month ago, and I
Appreciate that you acknowledged not you personally, but Gafney Kline and Baker Hughes acknowledged that this is a concern and
Apparently acknowledged, that it's a valid concern
Since I received the letter. So I'm gonna have you continue with your presentation today
But understand that this question is still lingering and I would like to see more legal
Clarity here, so please proceed with
Your presentation just one question a question from senator Wilkowski. We've used gaffney Klein. I
remember using you in
2007 back in aces and and found your
I don't know if it was yours, but found the analysis of
Gaffney-Korn to be very, very helpful there,
and I know you're representing all companies at the time as well.
Are there other sovereigns that you represent where there's
potential and adverse or different interests with Baker Hughes?
Thank you, Senator Wielikowski.
I suppose one comment I would offer is that I believe
There is Baker Hughes equipment in about 80 or 90 percent of the LNG plants around the world
so in that sense any time that we're advising an investor or a lender or
a sovereign state
Potentially there's always that
slight overlap
clearly in this case
You know it's been brought to the fore because of
the very active dialogue between you know Glenn Fahn and yourselves
But certainly, from an LNG perspective, you know, the division of Baker Hughes that entered
into the agreement with Land Farm that focuses on equipment, providing plant and so forth.
And as I say, that same dialogue happens with probably almost every L&G project in the world.
Obviously, it's particularly obvious here, because of the commentary that we've seen in
the press.
Follow-ups and your World Cup share your concerns, Madam Chair, I wish we had it, and
I feel more comfortable if we have someone completely not affiliated with Baker Hughes.
I don't know that that's possible and I know you've been working with the state of Alaska
for at least 20 years probably.
So I'm interested to hear your testimony and but I'd share your concerns.
Thank you, Senator Wilkowski.
I'll let you proceed, Mr. Fulford.
Okay.
Thank very much, Jackie Zoll.
And really following the direction that we've given in terms of today's hearing, there's
really three broad areas that would like to cover and, I will just advance the slides.
So, first of all, obviously there's been a lot of discussion about property tax and
the request to mitigate that or offer concessions.
So part of today's presentation talks about how that's being handled in Texas and Louisiana,
and also Maryland, which is, I think, a relevant and interesting example.
The other area of interest I think which is quite relevant to today's hearing and indeed the project is
Activity just south of us here on the Canadian coast not just with LNG Canada
But some of the other projects that are evolving there
You know with the with announcements yesterday and with continuing
Sort of development of The project that being led by Glenn Fahn
The other thing, which I think is useful to spend some time on, is to look back to Senate Bill 138 and some of the measures which we've followed through from that.
And then, finally, I'd like to ask my colleague, Andrew Duncan, who's online today.
He's from Gaffney Klein Office in Singapore.
He has a lot of experience on FID readiness and that side of equation,
which will speak to him.
So before we get into the slides if if that order of materials is okay, we'll just press on that would be great
Thank you. Okay
So I wanted to start with Louisiana as I'm sure many of you here know
Louisiana's is probably one of the major hubs for Gulf Coast LNG projects and
The issue of property tax has been addressed not only for LNG plant but you know all sorts
of other hydrocarbon and manufacturing facilities. So there's a generic statute in Louisiana which
provides for property-tax relief for major industrial projects. There's technically an influence
So, you know, sometimes people look at the sort of property tax concession per job being
created and certainly LNG typically does not have a high number of jobs attached to it.
So as I say, the statute in Louisiana provides for up to 80 percent property-tax relief for
So, it's worth pointing out that the way in which taxable value is determined in Louisiana
property tax is different to here in Alaska.
In the sense that it is an ongoing valuation which obviously takes into account a number
of factors.
So certainly the plan is that after the property-tax concession, the regular property
And for Louisiana, that's about 100 mills of property tax
rate on the planted equipment.
One of the questions, which is arisen in Louisiana
is the same one that I think is under discussion here,
which really is really the value of those tax concessions
and the impact on state's residents,
obviously in exchange for these very large economic benefits.
So, on the table here, we have some typical property tax rebates and their value over
the 10-year rebate.
Sabine Pass is perhaps the largest.
One of the reasons for that is that it's a major LNG facility, which is, I think, pushing
past 30 million tons per annum now.
property tax benefit. Then the next two projects are owned by Venture Global. Calculus UPass has
been in operation for a couple of years. Placmin has just started in Operation. So also on this
list is Magnolia LNG, which is owned in Glenfarn. And the estimated property
tax benefits for that project is about $500 million.
So certainly for Louisiana, property tax concessions have been a central theme of the
LNG development. And as I say, the statute which allows this to happen was put in place
some time ago and applies across the board to any major investment in the state. So that
provides one example of how property taxes are dealt with. Actually the last point on
The 80% reduction in property tax for 10 years, there are other mechanisms for further tax
concessions and I think one or two projects have more or less negotiated that property
tax down to zero, at least for ten years. Before you go, questions? Members of the committee?
Senator Kawasaki, you had a question?
Yeah, thanks.
I'm just trying to think of this apples to apples.
So right now we've got a 20 mill rate
on oil and gas property taxed across the state.
What is that here for Louisiana?
What are you saying that that is?
Or without the incentives?
One way of looking at it is a 100 mils
that has a much slower decline rate.
than you do here in Alaska, compared to 200 mills that declines based on depreciation.
So in that sense, the major effect would be one of discount rate and time value of money.
As I've mentioned in previous discussions about LNG,
disproportionately high because of the way in which particularly private investors would
look at time value of money and the discount rates. So that there's two factors at play.
One is the mill rate, but perhaps the more important one is
the profile associated with the property tax.
I'm pretty sure this is the way like if you have a home the property taxes aren't a hundred percent at the first
You know it it also grades up as the construction begins and as it ends
Then it peaks at some point and then it goes back down. So does that I guess I've tried to track it to
apples-to-apples again with
Of a property taxpayer what happens in that case?
Through the chairs an excellent question senator Kawasaki
So, as it happens, I think it was HB4 back in 2014, maybe, which has already ameliorated
the property tax burden on the project by delaying it until first gas.
So in this instance, under the current property-tax arrangement, it would become payable once
Thanks. Senator Wilkowski. Thank you. I want a gas line just as much as
anybody in this committee, but I have a hard time giving a say, well saying I
guess to communities, you have to reduce your property taxes without seeing the
books. Is this investing, is this padding investor profits? Is
this required to get a hurdle rate?
I guess that's my fundamental question,
is how do we make this decision
without knowing what the numbers are?
Thank you, Senator Wollicowski, through the chair.
We've touched on this topic already,
once or twice in this hearing,
and there are probably legislative
and regulatory processes at play here,
which in an ideal world would rely
on quite significant disclosures.
about cost and profiles, and so forth.
Although it's not a topic for today,
for example, the determination of a tariff
for the pipeline through the RCA.
I believe the RCAA regulatory framework
would typically require quite significant disclosures.
I don't know from a confidentiality point of view,
I do not know how far those disclosures have to go,
you know, in terms of making a disclosure or making
a determination which is clearly in the public interest
to the last citizens, some level of that disclosure
might be appropriate.
A point I've made before, and I think the previous speakers
sort of intimated at this, it's quite common for a project
to create what's called an open book economic model,
It allows stakeholders to come at a project like this from a standard perspective.
But you can put your own assumptions in in terms of oil price, discount rate, cost of
capital, or all those things which are proprietary.
You keep outside the open book model.
But nonetheless, it does provide a common basis for dialogue, particularly when very
sums of money are being discussed.
So would that be your recommendation that we require or perhaps begin by requesting an open
book economic model from Glenfern? I believe it would be an appropriate request to be made.
the previous incarnation of the project and it was used by the state and the other companies
involved to arrive at determinations around things like property tax.
Thank you.
The other interesting thing on your slide here is the third bullet.
The reduction you're portraying here, is limited to 10 years.
property tax reduction in our state would go in perpetuity last the whole time.
So that's interesting. Is the 10 years pretty typical? I thought you had said that but I wasn't
sure. The 10 year's check is baked into the legislation, the Louisiana Statute that applies
coming back to my earlier point
for a project developer
relief in the first ten years of the project is
very much more significant than in subsequent periods of time and
So, you know to some extent
you, know many of these
LNG projects exist around a kind of a balance between
mitigating near-term costs which heavily impact the economics of the project and
then longer- term benefits where you know a government or a sovereign stakeholder
might have more opportunity to look for ways to develop value. Thank you. Further
questions? Seeing none I'll let you go to the next slide.
Thank You Cheggis. So the
And you'll see a summary at the top there in terms of how property taxes allocated across different local authorities.
So you've got the county city port authority of applicable in the school district.
So, you will note there that the School District, mill rate, is the largest contribution.
mechanism existed to that in Louisiana, but following a reform and a kind of a
sunsetting of some of those property tax concessions, the subsequent regulatory
arrangements excluded school district taxation. So effectively it more or less
halved the property taxes available. You'll see on this chart a number of
property tax relief, and you can see there some very significant numbers.
Corpus Christi LNG, one and a quarter billion dollars,
and again just to put that into context, Corpus
Christia will be expanding to about 50 million tons per annum, so two and
a half times bigger than Alaska Lng,
and that's one of the reasons for that very large number.
In terms of doing the math on this, a good rule of thumb is to say that Gulf Coast liquefaction
costs about $1,000 or $1200 a ton of annual capacity.
So from that you can essentially derive an approximate capital cost of some of these
facilities and get some sense of the significance of this property tax relief numbers.
Glenn Fahn were successful in achieving property tax concessions from the, essentially the local
government. And the number is relatively low for a couple of reasons. First of all, because it
uses the new property-tax concession approach. Secondly, it's worth remembering that the Texas
So again, if you compare that to Corpus Christi with its 50,
you can see why some of these numbers are disproportionate like that.
Very good. I'll let you go to the next slide.
Thank you. So it's perhaps not an obvious example, but Maryland is quite a good example I think
relates to the Cove Point LNG facility.
As some of you may know, Cove point was built
back in the 80s as an L&G regas terminal.
But in end, was mothballed for decades,
because there was no L and G coming into the US.
So for a long time, and perhaps this comes back
to our question about disclosure,
for long-time, the cove point facility was regulated.
under the PUC. So, in the same way that a distribution company would be regulated on
its assets, so was CovePoint. It then switched to being an LNG export terminal. And so in
the early days of that, 2013, a decision was made to move to a built type arrangement.
The main reasons for that were that the the local county
Were concerned about volatility and their taxing income
Equally, it was felt that
Encouraging a capital asset of that scale. What was a positive thing to do?
so that built ended in
2018 and
It reverted back to conventional property tax appraisals with a 40% discount
Interestingly, what they found was that there were then a set of differing expectations
around valuation of the asset.
There was some volatility around county income, which affected schools, and in fact it came
to a head in 2023 when there was a very significant shortage in school budget, simply because
that the county relied on that one facility.
So in 2024, they decided to go back to a PILT
and in fact, it was retroactive as well
to address some of these budgetary issues
that they'd encountered.
So, you know, a very interesting example.
You know communities that were relying
on one big asset for the taxable income
and certainly the conclusion that
they came to was that
a PILT was better than having to deal with the uncertainties around property tax.
Interestingly, depending on which analysis you use, if you used the state valuation of
the asset, the PELT is actually higher than the property
tax would be.
But if use the county's evaluation is slower.
in the interest of all parties.
Any questions on that slide? Senator Clayman.
On a theme, how much information did Maryland have with respect to the economics and the
balance sheets and everything else of that project when they were making these decisions?
I don't have that information, but I think, you know, if we were to dig into this a little
more closely, it would be easier to establish.
It's not strictly relevant to these circumstances, perhaps for the benefit of the Committee
and people watching at home.
is that the pipeline built by TransCanada for the LNG Canada terminal was
privately funded. There were direct negotiations between the
pipeline builder and operator and Lng Canada. And as we've heard from our
previous speakers actually from Pegasus, you know, there were private
arrangements arrived at in terms of the tariff and how cost
The difference between that and the phase one gas line here is that for the first few
years at least of the pipeline project, the beneficiaries of that pipeline are regular
gas and rate pairs in South Central and potentially Fairbanks and elsewhere.
More important because a public interest determination has to be made
So so it's just helpful to think that you know this this pipeline has a very different purpose
For example to others that. You might see elsewhere
That's helpful that's very helpful. Yes for us to keep in mind
Senator Myers. Thank you manager. So
Sure fall for it. I guess what's what going through my mind is
You know, we're talking about a long-term change in the property tax.
You're suggesting, you know you're looking at Louisiana saying 10 years.
The chair has already mentioned there's been one suggestion out there
that we make it in perpetuity, whatever the reduction is.
I guess what I'm concerned with is,
you Know, the pilt sounds like an interesting way to try to get around it.
We still come back to our constitutional prohibition
on we can't contract away our taxing authority.
So even if we as a current legislature
and the current administration come to an agreement,
five years down the road, 10 years
down road you know, whatever may be applicable,
we still can not stop a future legislature,
a Future Administration from attempting to change that
and from the everything that we are getting
Effectively, what they're asking for is we need certainty as much as possible.
We want this set in stone and even though it pilts, I think probably heads in that
direction with our current constitutional language, it sounds to me like it's
impossible in the long run.
Thank you for the question, Senator Myers.
Through the chair, it's a question which also came up during SB 138.
Given that the framework around SB 38, one of the purposes of that framework was to provide
a fiscal framework and fiscal stability going forward.
You've highlighted the constitutional constraints around the way in which taxes get set in the
I believe some work was done by the Department of Law at the time to make an assessment in
terms of how fiscal stability for a project of this scale and magnitude would be reconciled
with some of these other constitutional constraints.
And I'm sure the same questions would arise this time.
you know the role of lenders for example, having in a project like this and you
know one of the things that lenders would be you
know top of their list list to look at would
be
you now fiscal framework and stability
and
you part of that would
be
just an appraisal around the jurisdiction the the regulatory and legislative
framework that applies there because certainly
a well-defined and well governed framework compared to
many places around the world that host LNG.
But, you know, conceivably they could be looking further than that at some kind of
degree of assurance or certainty.
Other questions? Senator Clayman. Just a little bit of a return to it,
earlier question. It's, I'm working on that.
I believe that Glenfarn has a fairly detailed model that they're working with to piece all these things together.
In the world of what's confidential and not, is it in the realm that we could be saying to GlenFarn?
You can't give us all the data that's in your model, but give the model you have and
we can put our own numbers in and actually see, I mean, we might not actually be putting in
put the model together is that in the realm of what something we could potentially request
from Glenfarn to try to get a better understanding of how they've structured this package.
Thank you, Senator Clinton, through the chair. With any global project development like this,
the way in which the dialogue is handled between the project developers and the
that there are different ways of approaching it and you know a lot depends on the way in
which the project developer wishes to lead that through. Clearly as I think you've contained
in your comments today there's certain decisions by the state which would be quite difficult to make
broad economics of the project, because thinking of other jurisdictions where we are involved
in a similar kind of discussion, there usually has to be some degree of exchange.
And I can think of examples that we're looking at today on other continents where the Open
Book Economic Model is a vital tool to frame the dialogue between government and project
Mr. Fulford, thank you.
We are at slide seven.
The next slide begins the subject
of Canadian Pacific Coast Projects.
We're at five o'clock.
So thank for agreeing to be joining us again on Monday.
I had perceived that we probably wouldn't make it through
and I'm thankful that you are available
though you will be online.
That's correct, Jackie.
Yes.
So, thank you very much for being here today in person, and so we will stop the presentation at this point.
Just additional information for committee members, you do have
In your packet, a report by an entity called Wood Mackenzie.
It was prepared, presented in November of 2024, so two years ago,
on the Economic Viability Assessment and Economic Value of Alaska ONG Project Phase 1.
So that is in your materials and for the people online, for
the public, it is also at the Resources Committee website.
dot resources at aka leg.gov is our email address.
You can shoot us an email.
We'll send you directly to the website.
So with that, we're going to conclude today
and we will continue with Gaffney Klein on Monday, 3.30,
same place.
At this time we are adjourned.
Let the record reflect.
The time is 5.02 p.m.