Environmental regulators to give AK LNG another look

Jul 8, 2021

A 2015 rendering of what the plant in Nikiski might look like.
Credit Courtesy of Alaska LNG project

The Alaska LNG project would take natural gas from the North Slope of Alaska down to a proposed plant on the Kenai Peninsula, in Nikiski, where it would be liquified, shipped out and sold. 

The gas is already pumped out of the ground on the North Slope. But it isn’t currently sent to market. 

To get it there, the state wants to construct an 800-mile pipeline. And last year, it got the go-ahead from environmental regulators, under then-President Donald Trump, to build the massive project.

But now the Biden administration wants to take another look.

The federal Department of Energy announced last week that it’s ordering a supplemental environmental review of the Alaska LNG project. It’s part of the Biden administration’s focus on fighting climate change and it’s also in response to a legal challenge from the Sierra Club, a national environmental organization. 

Under the review, regulators will take a new look at the environmental impacts of natural gas production on Alaska’s North Slope. Plus, they’ll analyze the project’s greenhouse gas emission potential — from the extraction of natural gas to its export, to its use overseas. 

The federal government could then decide whether to keep, change or overturn it’s approvals for the project. 

The Alaska Gasline Development Corporation, a public corporation under the state, doesn’t see the order as an obstacle, said to Tim Fitzpatrick, AGDC spokesman. 

“The project has been thoroughly scrutinized over a period of about six years or so, taking a look at over 150,000 pages of data," Fitzpatrick said. "So we’re confident that the project is going to continue to stand up to any environmental scrutiny.”

AGDC still needs funders for the project. It’s requested money from the federal government and is looking for private investors.

The project is estimated to cost $38.7 billion dollars.

“The new environmental review is not really going to slow down or impact the project’s time table," Fitzpatrick said. "At this point, we do have the authorization that we need to construct the project, and we’re continuing to talk to investors to secure the funding so that work can begin.”

Fitzpatrick declined to name those investors, saying negotiations are ongoing.

Supplemental environmental review or not, Larry Persily just doesn’t see the gas line project happening. He was a coordinator for gas transportation projects under President Barack Obama.

“I looked at it and thought, ‘Well, OK, that’s good. You can do a supplemental EIS on a project that’s probably never ever going to go ahead. But hey, if you got the time, go for it,'" he said.

Three large oil and gas companies were once signed onto the project and filed a permit to ship the resulting natural gas overseas. But they later pulled their support, due to high project costs and Alaska’s declining market for liquified natural gas.

A completed environmental impact statement does not necessarily mean a project will happen. But it’s a necessary step before something can be built.

Regulators said they plan to take a full-scope approach to their new environmental analysis. 

Persily said that’s easier said than done.

“One flaw in this is the assumption that you know who will burn the gas over the next 20 or 30 years," Persily said. "How efficient their equipment will be. What kind of emissions they’ll give off. So it’s a bit of a flying leap to try to really project that in 2021.”

A spokesperson from the Department of Energy said the department will foot the bill for the supplemental environmental assessment.

The department also said it will issue a notice when the draft supplemental statement is released. It will take comments and hold hearings on the draft.

Once the assessment is finalized, the agency could decide to reaffirm, modify or retract the federal authorization for the project, according to an April rehearing on the project.