"It allows certainty that these corporations know what their royalty gas share costs are whenever they sign a contract,"
- Rep. Chenault
(JUNEAU) - House Resources co-Chair Representative Mike Chenault (R-Nikiski/Ninilchik/Sterling) introduced legislation to the House Oil and Gas Committee today that would secure state royalties on value-added natural gas-based products to protect state income and jobs in the industry.
"It allows certainty that these corporations know what their royalty gas share costs are whenever they sign a contract," Chenault said. "What this does is it allows them to figure out what their costs are, and average them out so they know what their product is costing them to sell."
House Bill 57 calls for the commissioner of Natural Resources, natural gas producers and natural gas manufacturers to agree on state royalty rates at the time of a natural gas lease. The bill adds to current legislation that establishes state royalties from lessees who provide natural gas for public utilities. HB 57 also authorizes the state to consider employment opportunities for state residents as part of state royalties. Chenault said such provisions would benefit value-added natural gas manufacturers throughout the state.
"With these companies competing on the world market and with gas prices varying widely in other areas of the world, they have to be competitive," Chenault said. "And in order to be competitive, they have to know what their costs are."
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02-04-03: House Resources Co-Chair, Representative Mike Chenault (R-Nikiski/Ninilchik/Sterling),
explains why the state needs to secure royalty rates with natural gas producers and value-added natural gas manufacturers at the time of a natural gas lease.