Recently, both KUAC and the New-Miner have run pieces on the latest twist in the trans-Alaska natural gas pipeline saga. The stories featured Frank Richards, current president of the Alaska Gasline Development Corporation, and Larry Persily, former federal coordinator for Alaska natural gas transportation projects, with Mr. Richards speaking quite optimistically about the project’s prospects and Mr. Persily sounding utterly fatalistic. Reflecting on the debate, it occurred to me they may each be both right and wrong by turns — and that a middle path (a smaller, more domestically oriented and strategically focused project) might be an achievable one.
For decades, Alaskans have been dreaming of a way to replicate TAPS — the trans-Alaska pipeline system — with Alaska’s North Slope natural gas. This “TAPS Two” would be, like the oil-filled original TAPS, a very large, export-oriented project primarily focused on bring maximized monetary returns to private and public investors and the state of Alaska. Successive governors have tried get that massive, hugely expensive project off the ground but, to date, none have been successful.
Today, Mr. Richards, is looking to “jump start” that project (requesting “only” $6-8 billion in federal grant dollars to construct only half the pipeline, limited gas processing and no Cook Inlet LNG production facility — 25% of the total money to construct 25% of the total project to go, from a national perspective, absolutely nowhere) but, really, the underlying project is the same it’s always been.
For his part, Mr. Persily thinks the chances of this happening are pretty well nonexistent, and it’s not hard to see why: Alaska is essentially asking the federal government to subsidize profit seeking by the “big oil” North Slope producers (companies whom the administration and the congressional majorities see as simultaneously existential environmental threats and woefully under-taxed) and a hostile-power foreign investor (China — whom all, both Democrats and Republicans, recognize as a strategic treat).
But what if we moderated our expectations and asked for a differently configured and focused project?
Despite the Air Force and Army’s new “Take Back Dominance in the Arctic” strategies, the reality is that America needs to “take it back” because, compared to Russian, which has been building up its Arctic assets and capabilities for over a decade, we’re well behind the curve. To catch up, America will need to keep and build on what it has — starting, in the Interior, with a fort and base that have already been looking to upgrade their heat & power systems.
Compound this with China’s recent muscle flexing regarding availability of strategically/industrially critical and rare earth minerals (over which they have overwhelming market control) and a second uncomfortable reality sets in: Even in the best of times, America’s supply lines for these indispensable commodities is long, tenuous and highly vulnerable to inadvertent and purposeful disruption.
But Alaska’s huge endowment of mineral resources, if developed in tandem with its energy ones, can appreciably improve this strategic profile: Fairbanks Economic Development’s Energy for All Alaska Task Force recently received a presentation from Steve Masterman, state geologist and head of Alaska’s Division of Geological and Geophysical Surveys. In it, Masterman highlighted the division’s work relative to Alaska’s critical rare earth minerals. Not just what we have and where they are, but what they’re used for, their potential for economical development in our state, and what it would take to move those resources into production and through at least preliminary refinement. You can watch a recording at www.investfairbanks.com/energy.
So what if, instead of asking the feds to sink $8 (heading toward $40-plus) billion into subsidizing to non-completion a massive project focused on satisfying parochial, private and foreign interests, we offer them this: The chance to have a medium-diameter gas line linking Alaska’s two gas producing provinces — the North Slope and Cook Inlet — that ensures fuel optionality and two-way security of supply to all its major Arctic military installations. The chance to have, using its own soil — on its own soil, facilities providing preliminary processing (and maybe even advanced separation and refinement) of critical and rare earth minerals. And the chance to have an Alaska-to-Alberta rail-link moving those mission-critical commodities securely and cost effectively through an ally to the continental U.S., all for the same or less money than the historic Alaska pipe-dream.
A manageably-scaled gas line project, enhancing critical defense assets and facilitating needed strategic/industrial development, and primarily focused on advancing America’s immediate and long-term national security interests ...
I don’t know if the Biden administration and Congress would be interested in such a pitch and project, but I do think it’s a concept worth pursuing. Certainly, it appears a gas line dream more likely to be achieved than “TAPS Two,” and a value proposition more beneficial to the nation and Alaska if it is.
Jomo Stewart is the energy project manager for the Fairbanks Economic Development Corporation.