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Breaking News(?) From Alaska’s Governor Now In Korea Following A Purchased Speech Forum In Singapore

Bill Walker 11-10-09 NGP file photo by Dave Harbour

Governor Bill Walker, NGP file photo by Dave Harbour

Asia may be “looking for new sources” of LNG by 2023.  But that is no guarantee that the Republic of Korea or any other Asian nation will find Alaska’s 800 mile pipeline/gas treatment plant/LNG facility capable of providing a COMPETITIVELY PRICED source of gas.  

There are scores of newly completed and pending LNG export gas projects around the world — all anxious to supply a limited  — but thankfully growing — market with seemingly unlimited new sources of gas.

For that reason, our readers are wisely wary about relying on Prudhoe Bay gas to solve the state’s CURRENT fiscal crisis with what Alaska’s peripatetic governor cheerfully calls, “…our number one get well card”.  

The private sector and not government politicians and bureaucrats are best equipped to know when the time is right for an Alaska gas commercialization project…and how to go about profitably creating it. 

That said, we’re left wondering why Alaska’s governor should be spending his valuable time and tapping his state’s diminishing treasury in Asia right now.   After all, is recruiting LNG partners/investors in an unproven gas project (when prices are low and competition abounds) really timely now?  Isn’t that initiative really inappropriate considering the dark specter of an economic calamity that is descending on Alaska while thousands of PRIVATE SECTOR jobs are being lost?

Consider this, an LNG project’s net revenue – under the best of conditions — could not save the state from its current fiscal crisis that is approaching climax more than five years before an LNG project could be completed if everything went perfectly.

Consider this as well: The governor of Alaska had three of the strongest, most reliable, most committed multi-national oil and gas companies in the world supporting the project.  They still do want the project but are not with him on this trip because they do not believe the time is right for actively progressing an Alaska North Slope gas commercialization project.  The governor, whom we’ve accused of having Quixotic attributes — is not willing to wait.  Instead, he is radiating to the world, including the Asian world, an “I don’t give a darn whether the three producers are involved or not; I’m going to move this project forward come heck or high water regardless of world energy economics…and I want you Asian markets to entrust me with your money and be my partner.”

We’d be very surprised if the ever courteous, host country leaders didn’t treat the Alaska delegation with courtesy.  We’d also not be surprised were they to have some fun between diplomatic courtesies, at the governor’s expense.  

Imagine during a meeting when a potential gas buyer says, “Well, Governor, you’ve been traveling to our various Asian countries for many years promoting a municipal-owned gas project and now you are here as governor.  While it is a pleasure to see you, before going further we must ask if you are now serious about selling Alaskan gas.  You know what the price trends are now.  You know what prices we and Japan are negotiating from our Middle Eastern, Indonesian and Australian suppliers.  Do you now know what does your gas cost and when can we rely on it to be available?”

(Awkward Silence)

Your author lived in the Republic of Korea (ROK) for a year and participated in finalizing a Status of Forces Agreement between the United Nations forces (…that were defending the Demilitarized Zone (DMZ) against northern aggression) and the ROK government.  

We came away from that experience appreciating — not only Koreans’ social graces and hospitality —  but also the intelligence, competence, determination, and strategic skills of Korea’s business and governmental leaders.  They are top drawer.  

For Alaska’s sake, we hope these forays into international business and diplomatic arenas went well for the governor.  But we fear that what may have been a hasty foreign mission, plagued with poor business relationships and a fiscal crisis at home could have made the whole affair somewhat embarrassing for the governor, his entourage and the citizens he is charged to represent — including his corporate citizens.  

It would not be good to be thought of as “amateurs trying to develop their remote, but world class natural resources” (i.e. “losing face”).

Does he think the Koreans and other Asian leaders will think better of him for buying a “keynote” speech slot at the recent Singapore forum?  

Does this Administration not know that his treatment of his own producers over the years, his support for a predatory reserves tax and his judgement leading to this ‘go it alone’ style reflects his character and his reliability as a “business partner?”  

This is why the news release appears more to be a traveler’s “letter to the folks back home”, than a substantive report of some major business accomplishment for the people of Alaska.   -dh

(P.S.  We have never referred to the Republic of Korea, that beautiful Land Of The Morning Calm, as “South Korea” as if it were equal but opposite to the savage government of “North Korea”.)

 Delegation Engages Top LNG Consumers in South Korea

September 27, 2016 SEOUL—Governor Bill Walker and members of his oil and gas team met in South Korea with the U. S. Ambassador and key government and company officials about potential offtake, investment and partnership opportunities in Alaska’s liquefied natural gas (LNG) project.

“Korea spends at least $10 billion on LNG every year,” Governor Bill Walker said. “Alaska reinjects twice the amount of natural gas that the entire country of South Korea uses every day. That gives us an indication of the significant potential annual revenue for the state. Given Alaska’s deficit, it is imperative that we monetize our gas; it’s our number-one get-well card.”

Korea currently imports liquefied natural gas from the Gulf of Mexico and the Middle East, where shipments can take up to 25 days to arrive. Importing from Alaska would significantly shorten the delivery time—to about eight days.

“Alaska’s location makes our project strategically advantageous to Korea, one of the world’s top LNG consumers,” Governor Walker said. “We were able to confirm during our meetings that the Asian market will be looking for new sources to begin supplying LNG no later than 2023—which matches the Alaska LNG market delivery window.”

Alaska has a long established trade partnership with Korea, which is a top importer of fish, timber and coal from the Last Frontier.

The gasline would lead to thousands of jobs and the development of other industries.

“The mineral resources in Alaska are second to none,” said Department of Natural Resources Commissioner Andy Mack. “A gasline will open up opportunities for explosive growth in the mining industry so we can unlock our mineral potential by making lower cost energy to those mines.”

Link to a two minute video of Governor Walker speaking about Korea: https://vimeo.com/184499452