AK LNG Moving Ahead, But Slowly

May 24, 2017

The AK LNG Project continues forward, but not with the pace and fervor we saw when the project was first getting off the ground. The state of Alaska controls a bigger share of the project now, but doesn’t have a ton of extra money to put into it. And the economics are more difficult to make work with steady supplies of natural gas in the Lower 48 that are also a lot easier to get to. Larry Persily is chief of staff for borough Mayor Mike Navarre and this stuff is his specialty. Here’s a bit of context for anyone wondering what a timeline for a complete natural gas line might be:

“There’s an LNG plant under construction in Chesapeake Bay and it was an existing LNG import terminal. The owner decided, since there’s no one importing LNG into the U.S., they wanted to add an export terminal to the site. So you look at that little project in Maryland — no pipeline, small footprint, existing terminal — that EIS took a year and a half. This thing in Alaska ... is going to take a lot longer for the EIS process.”

The EIS is the environmental impact statement. Recently, a number of conservation organizations submitted letters to the Federal Energy Regulatory Commission opposing the project or parts of it. More groups will weigh in as the state finalizes the EIS statement.

“Once the state fills in the gap, then the clock will start, if you will, on the EIS preparation. Realistically, if the state really wants to proceed through the EIS and if the state appropriates the money that it will take to go through the EIS process, I think easily it could be two to three years for that environmental impact statement."

Persily says that Gov. Bill Walker has already lobbied the Trump administration to apply waivers and find other ways to speed up the process, as the economic case for an 800-mile natural gas pipeline doesn’t look to get any stronger in the near future. And Persily says that the project isn’t exactly a popular wagon for state lawmakers facing a budget mess to be hitched to. He says the Alaska Gasline Development Corporation has about $100 million left to put toward the project, which could pay for work now that won’t have to be done later.

“Do work that will have value should the time come when this project goes ahead, but don’t come back and ask us for any more money. I don’t think there’s any appetite in the Legislature to write more checks than they’ve already written, but advance it as far as you can with the $100 million, do your permitting work so we’re in a better position to move ahead should the market change.”

Persily made his comments on the Kenai Conversation.