4-30-17 Alaska's Government Owned LNG Scheme Determined To Begin Construction, Early 2019

4-30-17 Alaska’s Government Owned LNG Scheme Determined To Begin Construction, Early 2019

Alaska LNG Project Update

by

Ben Boettger, Peninsula Clarion

AGDC, a state-owned corporation, was a 25 percent partner in the previous plans to build an approximately 800-mile pipeline to move liquified natural gas (LNG) from the North Slope to an export terminal in Nikiski. After the project’s other partners — oil companies BP, Exxon Mobile, and ConnocoPhillips — decided not to invest in it after an unfavorable economic analysis in September 2016, the state became the sole participant in Dec. 2016. On April 17, AGDC filed an application for the project with the permitters of the Federal Energy Regulatory Commission.

AGDC Vice President for Communications Rosetta Alcantra said AGDC plans to be finished permitting by Dec. 2018.

“Once we get the authorization, we are going to be moving forward with construction,” Alcantra said. “Where does that leave your community and other communites? That has still to be defined. The goal is we’re going to have an eight year construction period.”

Fritz Krusen, Vice President of AGDC’s Alaska LNG project, said the project aspires to start construction by Jan. 21, 2019.

More….

LEFT COLUMN STORY: Alaska’s Government Owned LNG Scheme Determined To Begin Construction, Early 2019

OUR COMMENTARY

Venezuela President Nicolás Maduro

Bill Walker, Governor of Alaska. NGP file photo by Dave Harbour.

It’s pretty simple really. Alaska’s government-owned energy project says it “aspires” to BEGIN CONSTRUCTION in less than two years.

Some might say, “Wow, that’s gutsy!”

However, we say a ‘gutsy’ moniker doesn’t really apply when you enjoy a very high government salary in a depressed economy while risking other people’s money — not your own — on an economically infeasible project.

We would say it seems a little impertinent for a bureaucrat-run project to proclaim a plan to begin construction, when 1) the state operating budget is underwater, and 2) the legislature has not funded the project’s construction, and 3) required federal permits are not in hand, and 4) the project is in an early study phase, and 5) there is no viable financing plan visible, and 6) when consolidation of necessary pipeline terminus lands is incomplete, and 7) the Asian gas market seems fully supplied with low cost LNG, and 8) when Alaska’s major producers say the project is untimely, and 9) when, according to all present indications, the project is not viable.

We have earlier noted how the Governor says the project will be a “get well card” for Alaska’s ailing economy.

Ludicrous.

Alaska’s revenue continues declining in a low-oil-price environment. The state’s operating budget continues to grow while the Alaska State House of Representatives refuses to entertain scores to hundreds of valid public spending reforms. The result: Alaska is in fiscal crisis and any 8-year gas pipeline construction schedule — even if it were feasible — could not come to the rescue in time to alleviate the spending/revenue mismatch. And the 8-year time clock would not likely begin until early 2019 — assuming that all permits were in place and all feasibility, financing and marketing issues resolved by then.

The problem with a bureaucracy trying to take control of such a world class project is that it cannot turn on a dime nor move nearly as efficiently as a private enterprise-controlled project. Furthermore, it is subject to if not highly susceptible to legislative second-guessing, political manipulation, corruption, blackmail, bribery, intimidation, nepotism, electoral changes in leadership, public meeting law constraints and a woeful lack of private market incentives. It is socialism pure and simple and we find it unlikely that the legislature will fund or guarantee funding of the project’s construction.

For more insight into the matter of government ownership of the energy industry, consult Venezuela President Nicolas Maduro.

The state needs to stop wasting money on its socialist LNG project and focus on solving its real world fiscal crisis.

-dh

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-dh

About the Author: wpnorthern

Dave Harbour, publisher of Northern Gas Pipelines, is a former Chairman of the Regulatory Commission of Alaska, a Commissioner Emeritus of NARUC, NARUC's Official Representative to IOGCC and Vice Chairman of NARUC's Gas Committee. He served as Gas Committee Chairman of the Western Conference of Public Service Commissioners. He also served as commissioner of the Anchorage Bicentennial Commission and the Anchorage Heritage Land Bank Commission. He earned a Bachelor of Arts Degree: English, at Colorado State University, a Master of Science Degree: Communications-Journalism at Murray State University and graduated from Utility Regulatory School for Commissioners at Michigan State University. He served as a Vice President for Communications and Public Affairs at Alaska Pacific University, taught bank marketing classes at the University of Alaska and was an English teacher at Los Alamos High School. Harbour served in ranks of Private - Captain during a 4-year assignment with the Army in Korea, Idaho, Georgia and Fort Meade and received the Meritorious Service Medal among other commendations. Harbour is also a past Chairman of the Alaska Council on Economic Education, the Alaska Oil & Gas Association Government Affairs Committee, the Anchorage Chamber of Commerce, the Export Council of Alaska and the Department of Commerce's District Export Council. He is a past President of the Alaska Press Club, American Bald Eagle Foundation, Consumer Energy Alliance-Alaska and Common Sense for Alaska. Harbour was instrumental in founding the American Bald Eagle Research Institute (UAS), the Alaska Support Industry Alliance, the Downtown Anchorage Business Partnership, and Arctic Power. He also served as CEO of several small Alaska organizations, including the Anchorage Parking Authority and Action Security, Inc. Harbour is also Chairman Emeritus of the Alaska Oil & Gas Congress. Harbour's wife, Nancy, is a professional, performing arts administrator and his three boys, Todd, Benjamin and William work in the fields of environmental management, energy marketing and medicine.