Ramras calls for clarification of AGIA damages clause

Rep. Jay Ramras, R-Fairbanks, wants greater accountability for the state's risk in a $500 million pipeline deal.

On Tuesday he announced a resolution that will be taken up by lawmakers when the Legislature reconvenes in January. The resolution -- which expresses the Legislature's intent without the weight of a bill -- calls on the state to be clear with Alaskans about the chances that state government could trigger a treble damages clause in its Alaska Gasline Inducement Act partnership with TransCanada.

Specifically, it requests that the state and TransCanada craft a Memorandum of Understanding on exactly what would trigger AGIA's treble damages clause.

Ramras said he's concerned that the state's support of an independent instate gas pipeline carrying more than 500 million cubic feet of gas could be construed as a competing project. He's also looking ahead to the point at which the state and producers negotiate fiscal terms for gas development, and whether any concessions by the state that could benefit producers outside of the AGIA partnership would be seen as supporting another project.

BP and ConocoPhillips are pursuing a competing pipeline project.

Under AGIA, the state agreed to reimburse TransCanada up to $500 million for work on the pipeline project. If the state backs out or takes an action that benefits a competing project, Alaska could face treble damages, or three times the amount of reimbursements paid to TransCanada at that point.

"The administration states again and again that the path forward is through the AGIA model, but there are significant unanswered questions and Alaskans deserve concrete answers," Ramras said in a press release announcing the resolution. "I believe that we must be diligent when dealing with multi-national corporations when it comes to spending money chasing the elusive large diameter pipeline, and that it is in the state's best interests to keep us in the loop with the facts moving forward. The decision's moving forward could potentially have a billion-dollar impact to the state treasury and our ability to provide natural gas to our own residents."