Gov. Mike Dunleavy says once more it would be great to have a 42-inch gas pipeline from the North Slope to Southcentral, but he offers no details on how to make it happen.
In a memo to legislators under the subject line, “Alaska’s Energy Crisis,” Dunleavy said he hopes that private industry will lead the way.
He said, “I look forward to collaborating with you to expeditiously evaluate and act on ways we can move Alaska LNG forward and transition Alaska LNG to an industry-led project that benefits all Alaskans.”
This is as noncommittal as you can get.
The Alaska Gasline Development Corporation, which is in danger of being eliminated by the Legislature, is hyping the Dunleavy memo as something significant.
It’s significant only in the sense that it shows Dunleavy is refusing to lead, follow or get out of the way, his trademark approach to governing.
Dunleavy failed to mention in his memo or say anything about whether he will support the AGDC request for $50 million in state funds to complete front end engineering and design.
AGDC president Frank Richards told a Fairbanks group Tuesday if the corporation can get the $50 million early in 2025, an unnamed North American pipeline company would complete the so-called FEED in early 2026, with four years of construction starting in 2027.
The company would use its own $50 million for the FEED costs. But would have a promise from the state of getting $50 million back from the state if the pipeline company opted to drop the project after finishing the front-end engineering, Richards said.
The natural gas users in Alaska—Enstar, Chugach, GVEA and other utilities—would be asked to sign long-term gas supply contracts in 2025 as a basis for getting financing. That means the utilities would promise to pay for a certain amount of gas, perhaps for decades.
As for the promises for cheap natural gas for Fairbanks, the AGDC model does not include the cost of the spur gasline that would be built to connect Fairbanks to the gas pipeline. This inexplicable omission means that the consulting report listing the envisioned cheap gas price in Fairbanks is erroneous.
Dunleavy said in his memo that the “looming Cook Inlet crisis is the most critical energy issue facing Alaska policymakers,” but he
The Dunleavy do-nothing memo is attached to a new state-funded study by the consulting company Wood Mackenzie that plugs the pipeline plan. It says the pipeline could be operating by 2031.
No one is saying who will put up the money.
The enterprise would start with an $11 billion to $15 billion pipeline to Southcentral carrying natural gas that doesn’t have to be processed.
The gas would not be from Prudhoe Bay, but is in a prospect under development by Pantheon that the company has promised to provide at a cut-rate price.
But the Pantheon plan to nearly give the gas away is still not assured, so AGDC would need backup contracts for Prudhoe Bay gas.
Hilcorp, ExxonMobil and ConocoPhillips have not promised to provide gas at a cut-rate price. The Prudhoe Bay gas would need a costly treatment plant to get it ready for pipeline shipment.
Tens of billions in additional costs would occur if the pipeline were to be upgraded to allow for the processing and export of large amounts of gas from Prudhoe Bay.
The thrust of the study is that an $11 billion pipeline would be better in the long run than importing natural gas for consumers, though the costs of getting imports started would be in the range of $600 million to $1.4 billion.
Here is the Wood Mackenzie study.
Here is a link to a legislative hearing Tuesday.
This is what Dunleavy writes about its findings, neglecting to mention the AGDC wants $50 million from the Legislature immediately:
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
