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Community Perspective

No movement on the Alaska natural gas line

The Alaska LNG Project is now at a dormant state. The Alaska Gas-line Development Corp. now is down to nine employees, and they are only concerned with the review process by the Federal Energy Regulatory Commission of the environmental impact statement for the pipeline project. FERC has delivered the draft EIS, and, according to FERC’s schedule, the final EIS will be made as an order in June 2020. There is no indication from FERC that the EIS will be approved, but the AGDC has stated it remains positive that the EIS will be approved.

According to AGDC, the joint development agreement made with China has not been extended. The agreement expired at the end of 2018. China is no longer a potential funding source.

AGDC in conjunction with Alaska’s governor has decided that Alaska will no longer act as the sole venturer in the pipeline project. In fact, Alaska has completely removed itself as an active player in the project. AGDC hopes to receive a positive EIS from FERC in 2020 and then convince investors and companies to take on the $35 billion to $40 billion project with the EIS order as an incentive There are no companies or investors lined up at this date.

The Alaska Stand Alone Pipeline Project, the in-state pipeline plan, has been completely shelved and made totally inactive by AGDC. The math is wrong with this project. There is no way the project could become profitable or even break even, so the state of Alaska would have to subsidize the system forever.

The Community Advisory Council, of which I am a member, has decided to schedule quarterly meetings instead of continuing with monthly meetings. The next scheduled meeting is in November.

The systems in the pipeline project are the processing plant at Prudhoe Bay, the pipeline from Prudhoe Bay to Nikiski on the Kenai Peninsula and the LNG plant at Nikiski. The natural gas in the Prudhoe Bay oil field is of poor quality because the methane content is only 76% and there is 12% CO2 content. It is the methane content in natural gas that determines the value of the gas. The Prudhoe Bay natural gas must undergo expensive processing just to drive the methane content up

This is a brief chronological history of AGDC:

2009: AGDC is created by the Legislature to advance the plans for the Alaska Stand Alone Pipeline Project.

2012: CAC is created by AGDC as a means to communicate with the public.

2013: AGDC is made an independent agency in the state government.

2015: The state buys out TransCanada for $100 million and adds the Alaska LNG Project to AGDC’s responsibilities.

2017: Alaska and China sign a joint development agreement. China would produce $32.55 billion, and Alaska would produce $10.85 billion.

2018: The agreement with China expired on Dec. 31, 2018.

2010: The agreement with China is abandoned. China is no longer involved in the Alaska LNG Project.

Herb Butler of Fairbanks is a member of the Alaska Stand Alone Pipeline Community Advisory Council. The council is an independent organization and is not a part of the Alaska Gasline Development Corp. It serves as a link between the AGDC and the public.

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