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AGDC chief explains drawdown



By this time next year, the Alaska Gasline Development Corporation may itself have run out of gas. With no additional funding from the legislature, the group it put together a decade ago to try and get a gas line built from the North Slope is quickly shedding workers and preparing to back away from that effort.



AGDC has about 10 months of runway left. Its interim president, Joe Dubler, updated the House Resources Committee on how it intends to spend that time last week. A draft environmental impact statement was released earlier this year by the Federal Energy Regulatory Commission. That represented a big step, but by no means the biggest. Dubler says they’re narrowing their mission, and workforce, to try and get the next step complete, which is securing a license to construct the gas line from the North Slope to Nikiski.

“We have been, during the last two to three years, been doing a lot of things that didn’t relate specifically to that, so we’d built up a large infrastructure at the corporation that the board, after having discussions, we don’t believe we need that much infrastructure to do what it is we’re working on in the next year and that’s working strictly on FERC.”

By infrastructure, Dubler means employees, whose ranks will be cut by more than half, to fewer than ten. At the direction of the board of directors, who are appointed by the governor, they’ll be getting rid of entire departments in the coming months, as loose ends are tied up on the current phase of what’s been and what will continue to be a long permitting process. That is, if the project gets picked up by private companies. AGDC had been in partnership with the state’s big three oil companies, who all backed out in 2016 as the project’s feasibility came under serious doubt.

“The idea is the state, through AGDC, doesn’t want to be the only party working on this project. We need to have some private sector IOC’s or other large companies that have done this before. When you take on something like this, you don’t want it to be the first one you’ve ever done, so we’re looking for someone who’s done this all around the world to take it over.”

Even with private investors on board, the economics don’t pencil out. Natural gas is selling for a little more than two bucks per million BTU. At a cost of more than $40 billion, the selling price would need to be closer to double digits for AK LNG to work, and more natural gas supply is coming online all the time, in places that have far lower operating and construction costs than Alaska. Another step AGDC took back from the project was in not renewing the tentative agreements that it had developed for potential buyers, like China.

Despite all that, though, Dubler says none of this means the project is dead.


“I have to really take exception to that. I disagree 100 percent. I think we’re closer now than we’ve ever been. And I know that sounds horribly optimistic, but we’ve never been this close to getting an environmental impact statement, the producers are back looking at it, at least. I think the fact that they realized, if you look at the North Slope, they’re hitting a lot of gas up there right now and they want to be able to monetize that and the state wants to be able to monetize it and I think this project helps with that.”

The public comment periood on the federal draft envirionmental impact statement is open until October.


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