“The Kenai is ready.”
That’s what Kenai Peninsula Borough Mayor Peter Micciche said Thursday of the Alaska LNG Project.
Speaking to the Alaska Gasline Development Corporation at a Thursday meeting held in Kenai, Micciche underscored his support for the project — a proposed 800-mile pipeline that would move gas from the North Slope to Nikiski for shipment overseas — and said the peninsula is gearing up to meet the needs of such an investment.
“We’re working with our partners on workforce and housing issues and hoping to work together as things move forward on making sure that our community is ready and that we have Alaskans ready to go to work,” Micciche said.
The Alaska LNG Project has been tossed around for years, but stakeholders say there’s a unique opportunity to get the project done now. The project has three components: a gas treatment on the North Slope, an 800-mile pipeline and a liquefaction facility in Nikiski.
The treatment plant would condition gas taken from the Prudhoe Bay and Point Thomson fields before sending it through a pipeline to a liquefaction facility in Nikiski. From Nikiski, the gas would be liquefied and then exported to Asia. Project leads have previously said the liquefaction plant could export 20 million tonnes of LNG per year.
The planned Alaska LNG pipeline route generally follows that of the trans-Alaska pipeline until about Livengood, which is north of Fairbanks. From there, it would veer west through the Denali Borough, into the Matanuska-Susitna Borough, under Cook Inlet and into Nikiski.
Project proponents have said that there is currently a unique window of opportunity to make the pipeline happen. Since Russia’s invasion of Ukraine in spring 2022, AGDC President Frank Richards said Thursday, there has been a new demand from countries in Asia and Europe for energy that comes from a “friendly country.” Favorable court rulings and a thumbs up from President Joe Biden’s administration in Washington, D.C., have also helped, he said.
There’s also demand in Southcentral Alaska for a new source of gas, he said, as customers face a looming shortage of gas from Cook Inlet. The Alaska Department of Natural Resource’s 2022 Cook Inlet Gas Forecast, which was released earlier this year, found that demand for gas from Cook Inlet could outpace supply as soon as 2027 without new development in the basin’s active fields.
That conundrum is nothing new for the Alaska Gasline Development Corporation, which was established in 2009 when Southcentral energy customers faced a similar decline in supply.
For the current project push, Richards said, AGDC has enlisted Goldman Sachs Group Inc. to help secure financial investments for the project. Any money Goldman Sachs makes from its contract with the Alaska Gasline Development Corporation, he said, will only come about once the capital is raised.
“It’s a service that (Goldman Sachs) will receive compensation for when the money comes in from private investors and paid by private investors,” Richards said.
The Alaska LNG Project is expected to make gas available at lower prices than other sources, at about $6.55 per million British thermal units. That’s almost a full dollar less than the rate for Gulf Coast LNG and includes costs associated with purchasing gas from producers on the North Slope, treating the gas and sequestering the carbon dioxide, sending it down the pipeline, liquefying it and shipping it to Asia.
Public response
The pipeline received a mixed response from attendees at Thursday’s meeting. Of the people who spoke, a little more than half said they support the Alaska LNG Project.
Those who spoke against the project cited environmental concerns, said resources being put toward the project should go to other things like education and said new investment in oil and gas is a step in the wrong direction as renewables are on the rise.
In contrast, those in support said the project would bring new economic opportunities to the region, meet growing demand for natural gas and offer a cleaner energy alternative to foreign coal plants.
Wenda Kennedy, a property owner in Nikiski, said she supports the Alaska LNG Project because it would allow Alaska to profit off of what she said is an underutilized resource.
“Right now, the gas is on the North Slope and it’s basically stranded there,” she said. “What we need to do is get it someplace where we can process it and sell it, because a lot of it’s just being burned off.”
Jim Duffield, a small business owner who represents Kenai on the Homer Electric Association Board of Directors, said he and his clients have long supported the Alaska LNG Project.
“All of us want to see this big economic opportunity come to our doorstep down here on the Kenai,” Duffield said. “You have lots and lots of support. I talk to people every day, all over the community, and we want to see this thing come in. We’ve been waiting for a long time.”
Many of the comments opposing the project came from people affiliated with Cook InletKeeper, a peninsula-based advocacy nonprofit that aims to protect the Cook Inlet watershed by opposing new oil and gas leasing in Cook Inlet until Alaska adopts a plan to address climate change.
Ben Boettger, the energy organizer for Cook Inletkeeper, said part of the reason the organization opposes the project is because of its carbon impact. Assuming the project comes online in 2030, Boettger said, the 30-year export license would run until 2060 — 10 years after global emissions must reach net zero to prevent a temperature increase of 1.5 degrees Celsius.
“If we were to make a decision as a society to put even half the resources towards that deployment that AGDC has received for the past 10 years, we could make very significant steps towards reducing our natural gas demand by the year 2030, the year when your project is supposed to come online and save us,” Boettger said.
In response, Alaska Department of Environmental Conservation Commissioner Jason Brune reiterated a familiar tenet of Alaska LNG proponents — that construction of a pipeline in Alaska would displace foreign coal operations that have a higher carbon output.
“I think one of the exciting things about this project is that we will be displacing higher carbon output coal projects in Asia,” Brune said. “That’s something that I would urge Cook InletKeeper to consider.”
Brune further challenged a claim by Nikiski resident Hannah Smith that Alaskans’ tax dollars would be used to fund the Alaska LNG Project, saying that Alaskan don’t pay state sales or income taxes.
“Alaska’s actually very fortunate in that we’re the only state in the union that doesn’t pay an income or sales tax and, indeed, we all get an Alaska Permanent Fund (dividend),” Brune said. “ … There is no tax dollars … from Alaska residents that have gone to support this project.
Cook InletKeeper Executive Director Sue Mauger pushed back, saying that even if state residents don’t pay taxes, they are still paying for the project in other ways.
“Some of the comments Mr. Brune made, suggesting that Alaskans have not paid for this project in any way so far, I think is really false in that we have wasted a lot of state resources that could be paying for our children’s education, that could be funding the Department of Environmental Conservation,” Mauger said. “Alaskans are paying for this project.”
More information about the Alaska LNG Project can be found at alaska-lng.com.
Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.
