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Consider sea routes for gas: Ocean shipping could be better alternative

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Posted: Sunday, November 18, 2012 12:00 am | Updated: 12:10 pm, Mon Jan 21, 2013.

Community perspective

The elections are over. It’s time for Alaska’s future, and the North Sea shipping routes for natural gas deserve equal consideration.

In 1992, I helped organize a delegation to Finland for the International North Sea Routes Conference, hosted by the Finnish Foreign Trade Association and Finnish-American Chamber of Commerce.

Our delegation included a Native corporation with coal resources, a University of Alaska Fairbanks ice expert, a major northwest transportation corporation, a remote sensing engineer, someone studying military implications and three business people. My interests were infrastructure funding and a trans-shipment port at Dutch Harbor at the eastern end of the Aleutian Islands.

Preparing, I gathered National Oceanic and Atmospheric Association charts and many polar maps, read every North Sea routes report available, including Pierre Berton’s “The Arctic Grail: The Quest for the Northwest Passage and The North Pole, 1818-1909.” We identified Alaska products exportable via the North Sea routes. We also identified products shipped from the Pacific Ocean to the Atlantic and vice versa via the Panama and Suez canals or around the capes that could be shipped via the North Sea routes.

Clearly the North Sea routes had exciting global dynamics: Vastly shorter shipping distances and transit times equaling hundreds of billions of dollars in reduced costs. We soon discovered other Arctic countries had more Arctic focus than America and, that Alaska, notwithstanding Gov. Walter Hickel’s beliefs, had no authority over creating the route. Finland’s interest was in building the world’s icebreakers and assisting Russia in developing the Shtokmanovskoye Gas Field in the Barents Sea.

Studying that project, it became clear the commercial volumes of gas and high-BTU, low-emission clean coal on the North Slope supported creating North Sea route ports in Alaska, but what was needed?

We toured Finnish icebreakers, reviewed remote sensing technologies and were briefed at Helsinki’s University of Science and Technology. We became convinced technical ability existed to construct ships and loading facilities suited to transiting the North Sea routes safely and cost effectively.

With more knowledge, we began speculating on a mirror development of the Shtokmanovskoye Gas Field. Instead of bringing gas onshore for distribution, Alaska’s gas and coal could be sent offshore 3 to 5 miles via a sub-surface tunnel pipelines to loading facilities. Super ice-classed liquefied natural gas and coal ships would be needed to export to both Pacific and Atlantic spot or long-term markets. Finnish shipbuilders we met assured us of their experience, ability and desire to build the ships.

Even though rights of way and community impacts would be arguably less, interest in the North Sea routes waned as Hickel left office and an anti-development administration took over Alaska.

Now, two decades later, technology has improved with Submerged Turret Loading (STL™) buoys and icebreaking offshore facilities. Tunnel boring machines can easily tunnel three to five miles to offshore facilities at a considerably lower cost than a $40 billion large-diameter natural gas line across Alaska to Valdez, plus ships and facilities. It’s also less costly than the plan four companies provided Gov. Parnell in an Oct. 1 LNG export update. Their concept envisions spending $45 billion to $65 billion for a gas treatment plant, an 800-mile pipeline, a liquefaction plant in Southcentral and an LNG storage and tanker terminal to export 15 million to 18 million metric tons of LNG annually.

What about construction jobs? Or, gas heating for Alaskans or, industrial uses? Good questions. The North Sea routes will create hundreds of long-term skilled jobs, not just short-term pipeline jobs, and will do so in less time. Gas treatment facilities already exist on the North Slope but will need enhancing and enlarging to meet requirements of both export needs and in-state use.

Most importantly, the differential capital costs between proposed gas lines south (plus facilities/ships) and North Sea routes development (private sector built/operated facilities/ships) would be significant, leaving ample capital availability to fund both in-state domestic heating distribution systems and a full spectrum of industrial developments as they become practical and profitable.

So, does a North Sea gas route benefit Alaskans more than other routes? Our leaders say Alaska’s resources belong to “us,” the people. However, Alaska’s resources on state lands actually belong to the state, which is obligated to manage them for the highest benefit of the people. If that’s correct, then it can be argued that producing greater resource revenues for the least cost brings the highest benefit.

As we are examining all possibilities for getting Alaska’s gas to market, the North Sea routes option must be in the mix.

Meanwhile, the gas-trucking project looks like the initial right step for Fairbanks.

Joe Fields of Fairbanks represents Alaska International Development Corp., is former chairman of the Greater Fairbanks Chamber of Commerce Transportation Committee, a member of the State Job Training Coordinating Council and former chairman of the Governor’s Vocational Educational Council.

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