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Borough beginning to plan for LNG funds

Alaska Gasline Development Corporation


With plans moving ahead for the AK LNG project, so too are discussions about the federal money that may come along with it.



The Borough’s Chief of Staff, John Quick says city managers, service area directors and others around the borough whose budgets would be effected will begin meeting soon to put a plan together for that level of investment.

Close to half of the money spent to build the AK LNG line will be spent here on the Kenai. That’s had people wondering about the financial windfall of such a large investment for years. And as the path forward for the project begins to clear just a little heading into 2019, the early work in figuring out what to do with close to half a billion dollars is beginning as well. That’s about how much project planners have estimated the borough might receive as a federal payment in lieu of taxes.

The Borough’s Chief of Staff, John Quick, says that’s only for the anticipated five year construction phase.

“Operational PILT is $15.7 billion over 25 years. That’s a lot of money, that’s $600-something million a year for 25 years, divided by 50 percent, obviously, so the borough would have up to $300-something million a year for 25 years.”

Even if you have no faith the AK LNG project will ever actually be completed, the fact that those kinds of numbers are being talked about demands at least a little attention, and planning. Quick says those conversations will begin soon, so the the borough and all the cities within it can go to the state’s Municipal Advisory Gas Project Review Board with a single proposal.

“We’re very shortly going to have a meeting with the city managers and the mayors to say ‘hey, let’s get on the same page with PILT.’ So we make one request as one unified body to the MAG board. The MAG board has got a lot of influence in this. They don’t have authority, but they have a lot of influence. The MAG board will take our proposal, look at it and propose to the legislature what they think. The legislature, at the end of the day, can do whatever they want. But they take into consideration the MAG board’s proposal.”

It’s a lot of effort toward a project that’s far from certain. But Quick says work now will help avoid  a lot of the problems that have popped up in other parts of the country, like North Dakota. When the oil and gas boom hit there, housing shortages were an issue, as was crime and infrastructure that wasn’t up to the task of handling all that development.

“As we’re meeting with city managers and councils, they’re going to have an opportunity to say we need a new police station or we need some hospital services in Nikiski or whatever it might be. So we’re going to be in conversation with some city managers from North Dakota, legislators from North Dakota to say ‘hey, what is it you learned from this that you wish you would have known?’ I think that’s going to be very helpful because I don’t want to have people sleeping on the streets in the borough and rents at $5,000 a month. That’s the kind of stuff I want to have some forward planning with.”

An unofficial timeline derived from filings with the Federal Energy Regulatory Commission show a final environmental impact statement coming in the second half of 2019. Authorization from FERC to begin construction could be issued in 2020.


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