The natural gas pipeline is one of the most important issues facing Alaska. You might not know it, because Gov. Sean Parnell and his people seem to want to keep most things to themselves, but Parnell oversaw a huge advancement in the gas line. Nothing’s for sure, but never before in the history of the state have all interests converged. Independent candidate Bill Walker has made building the line a hallmark of his campaign. Yet what’s happening now and what Walker’s plans are for the line, if he were elected, is one of the most under-reported stories of the campaign. As of now, the state and Trans-Canada have partnered to have a 25 percent interest in the line. Walker says that he wants the state to own at least 51 percent. What that really means is anybody’s guess. How much more will that cost? Where is the money going to come from? The contract that the state is working from now will certainly have to be re-written and re-negotiated, and passed through the Legislature. How long will that take? To what end? Given Parnell’s bungles, does the public even care? I haven’t had the time and the manpower to dig into too much of this since Walker announced, but I gave it a shot in a column on Sunday. And I got lots of responses, most of which I think deserve a wider audience.
Below are excerpts from a few of responses, some lightly edited:
Faithful reader “Jon K” responds to another comment about the $65 billion price-tag being over-inflated and about whether or not the producers are actually serious about building a line:
The producers aren’t screwing around this time. They are spending $4 billion at Point Thomson, which is a gas field, in order to prime the field for a gas pipeline. They have spent hundreds of millions on design work and permitting. They have put their top talent on this project and have hired hundreds to work on it. They have submitted FERC and DOE applications. And they are purchasing land in Kenai – hundreds of acres. Companies that are serious about protecting shareholder value don’t waste billions of dollars, a ton of resources, and their top talent’s time on projects they don’t believe in. They value money, their reputations, and their employees’ time too much.
What makes this project unbelievably expensive is combining the world’s largest gas treatment plants with one of the longest artic gas pipelines with one of the world’s largest LNG facilities. The Gorgon LNG project is well over $50 billion. Given the complexity and size of this project, there is no reason to believe that the costs are way off. After all, under AGIA the state estimated that the costs for gas treatment and a pipeline to Valdez was $25 billion in 2008 dollars. This estimate, however, did not include the LNG facility, which is about 60 percent of the cost of the project.
Faithful reader Lynn Willis comes back at him Jon K:
I am not basing my vote for Governor on any pipeline prospect because the future is too clouded to decide. Yes we have made progress, perhaps more than ever; however, we have been nearly that far before as was the case with AGIA and the other projects now dead. We also have some motion with land being purchased and studies being made; however, I would not confuse that motion with actual progress at this point. We are just starting “pre-feed” which, according to the State DNR, will take 12-18 months. Next if possible we will proceed to “feed” for another 2-3 years. Only then is the final investment decision (FID) made and construction begins…
Ms. M takes issues with Parnell’s tendency towards secrecy, to put it politely:
We need Walker to assure someone is looking out for the shareholders of our carbon resources which is not the administration we have now, who would rather promote losing revenue from already economic areas of the North Slope. With the secrecy surrounding the Pt. Thomson agreement, Alaskans need Bill Walker to put transparency back in the process and advocacy to ensure Alaskans have a seat on the bus rather than under the bus on $65 billion dollar projects.
And I believe Bill Walker would have dealt with the National Guard sex abuse scandal in a more methodical, decisive, ethical, and transparent manner rather than the inept 4 year stonewalled delay playing out now. Every horrific act that happened subsequent to notification to Parnell is on this administration’s shoulders.
Derp is torn:
I had a similar thought yesterday that has me leaning Parnell. it was mostly centered around Walker’s insistence on 51% in my mind, that’s simply too much money for our state government to be risking at once… on anything, including a gasline. Twenty percent is plenty, with the private sector leading. Everything else about Parnell as governor disgusts me, and I really really like Bill Walker & his overall message too. Voting is going to be a tough decision, all based on Walker’s gas line mavericking
RogerP… I’m guessing Mr.Forecast has been living in Fairbanks area for a longtime..
Maybe he’s been not getting enough sleep and is a little grouchy.
I moved out of Fairbanks longtime ago, but I still like the place.
Many people who live in Anchorage are kinda clueless about the harsh realities of living in Fairbanks and out in the bush. Since the late 1960’s living in A-rage is kinda like living in North Seattle, you don’t have to cut 12 cords of firewood every summer prepping for next winter, then choke on the smoke all winter, and die at age 55 from emphysema.
The air-pollution in China is more tolerable than the air in Fairbanks.
since 1970’s A-rage people have insulted the rest of Alaskans by mistakenly interchanging Anchorage as all of Alaska…
this Anchorage-centric viewpoint still rankles many of us.
“Gas for Alaskans” translates to: Gas for Anchorage at any expense and forget the rest of Alaska.
…this actually has rippling repercussions extending to a critical National Security issue involving territorial infrastructure resilience.
When I lived in Fairbanks our nickname for Anchorage was “Lower Slobovia”
Lynn… I’m guessing Mr.Forecast has been living in Fairbanks area for a longtime..
Maybe he’s been not getting enough sleep and is a little grouchy.
I moved out of Fairbanks longtime ago, but I still like the place.
Many people who live in Anchorage are kinda clueless about the harsh realities of living in Fairbanks and out in the bush. Since the late 1960’s living in A-rage is kinda like living in North Seattle, you don’t have to cut 12 cords of firewood every summer prepping for next winter, then choke on the smoke all winter, and die at age 55 from emphysema.
The air-pollution in China is more tolerable than the air in Fairbanks.
since 1970’s A-rage people have insulted the rest of Alaskans by mistakenly interchanging Anchorage as all of Alaska…
this Anchorage-centric viewpoint still rankles many of us.
When I lived in Fairbanks our nickname for Anchorage was “Lower Slobovia”
For those of you interested in learning about how to make LNG with much higher efficiency than a repeat of the old Nikiski plant…
click on my nickname above
Dr. John Barclay has developed the technology of Superconducting Magnetic Cryogenic Refrigeration.
This technology is amazingly efficient and scalable
Jon K… You want FERC permits ?? .. no problem,
if you have a project that fits into the REAL WORLD.
Alaskans need to learn how to satisfy the federal agendas,
it’s not always about money, people need to feel important too.
IMHO; this gasline project is overblown and oversold.
Alaska needs to grow up and diversify away from having a fat titty to suck on.
TAPS created a cargo-cult of top-heavy Alaskans, and now we find ourselves defined by that bumpersticker.
…The best market for Alaska’s gas is ALASKA.
The Federal Govt is scared spitless of Fukushima and the failed WIPP,Carlsbad…
they have their minds focused on other stuff besides a tiny band of Alaskans wanting to become billionaires.
If we have an appetite for megaprojects, we should go fix Fukushima first…
…don’t believe the official story about “radiation is good for you”.
Fukushima would make a great spot to establish an Alaskan Gas Hub in Japan.
Chernobyl had 180tons of fuel rods in it when it blew, and only 3tons of that burned and traveled offsite to contaminate 77,000sqmi of Europe.
Compare that to Fukushima which had 2200tons of fuel rods on site, and over 400 tons of that burned and exploded and traveled offsite, leaving the remainder to sink and sizzle in the surf.. none of this has been removed from the site, all the remaining fuelrods are still onsite in peril of further decay & destruction… plus there’s several other reactors in Japan which are teetering on the edge of meltdown too.
I have friends who were on the crew of the Ronald Reagan when it was 100 miles downwind of the reactor#3 explosion, they are now sick & dying…
if you think Alaska is untouched by this calamity, think again.
I think the best way for Alaskans to make best use of our gas is to begin plowing lots of flexpipe/fiberoptic all over the state.
Since 1974 I have been advocating Alaska to have it’s own flexpipe manufacturing industry, and over the years flexpipe has gotten better & better, now it’s the preferred choice for midstream & mainstream pipelines worldwide.
We don’t need a platinum plated fatpipe stuffed thru Atigun Pass, this is bad for National Security anyways.
click my nickname above for a link to think about..
..I could dump a thousand links here but Amanda would hate me.
Roger,
The guy would probably be more at home on facebook. He remains anonymous and who knows whose side he really represents other than his own and that is a very minority position.
Well I read the other comments, lol. Guess you have something to say, but still.. why so aggressive? Most all news outlets advertise. This blog is no different
@forecast Oh please. Amandas posts on Parnell are filled with opinion. There’s plenty to object to. If you disagree with her, say why. Suggesting she’s been bought out in the form of digital ads just says you have nothing to say
Amanda, please do your readers a service and block the moron who calls himself Forecast from posting comments. I was actually planning on voting for Walker/Mallott; however, after reading Forecast’s comment posts and realizing what a rabid Walker supporter he is, I’ve decided against Bill Walker. I understand different and opposing view points but have little tolerance for unbridled stupidity. The imbecile acuses you of supporting Parnell because of advertising placement. Is he too stupid to realize that Wlker advertises on your site too? Obviously he is.
Forecast I meant to say you haven’t explained how we build the project without a credible cost estimate. I would genuinely like to know how it is that you think cost estimates are developed for projects of this magnitude, how much it costs to get an estimate, who will do it for us, and how long it will take.
Forecast, unfortunately EISs get stale over time. If we tried to resurrect that EIS, which doesn’t even follow the same route and has a different terminus, and also did not include a gas treatment plant – look it up – we would get sued and lose. There are dozens of additions reasons why we cannot rely on the previously issued EIS, we can get into if you want. My hunch is like a lot of liberals you will try to impugn my motives and then change the subject.
You also have explained how we sell a commodity without understanding the costs of the project. Are we supposed to spit ball the cost estimates and then go to Japan? What price do we ask for?
Walker is selling Alaskans a bill of goods with reckless talking points. He is clueless or lying to Alaskans and we have a press corps that is unwilling to engage or call him on his BS.
Forecast,
I suspect you just want to argue to no end. The project is known as the AKLNG project and part of that is the pipeline is it not? I know you don’t transport liquid LNG in the line but is that fact that important to you? I also know we are parsing the factions of the project but again, how is that relevant to our costs or more importantly our reveues from the project.? You might have wanted to read what else I wrote.
Jon,
You are ignorant. You come on this silly blog pretending you know a few things. But you are ignorant.
A FEIS was issued for a project in 1989. Go look it up.
The export licence issue is connected to the same problem Alaska has had for decades- the oligoply is illegally warehousing Alaska’s gas. This hurts not only Alaskans, but America.
Stop sucking up to the corporate interests. Why do you hate America so much?
Lynn,
I stopped reading your response after the first para. First, there is no LNG line. It is a gas line. It does not become LNG until processed at the end of the line.
And Lynn, we are not taking an interest in the gasline. Only in the LNG facility, if we have the money in about 4-5 years after Parnell has bankrupted Alaska and we have NO money to invest.
Good point, Jon K. Hadn’t seen that one yet, and you have to wonder why they didn’t put that info out like that a long time ago.
I appreciate not having a shameless self promoter in office for a change, though I can see the point that some more communication might be desired. However, without being able to put the deal together, publicity is worthless. I would argue that you don’t get 52-8 in the Legislature without “selling it” to some degree.
Forecast,
We are taking an equity interest in the AKLNG pipeline. I oppose the state doing that for reasons I have explained. That said, we are now obligated to participate in “pre-feed” for a cost $35 to $43 million and if we don’t continue to “Feed” we will pay Tran Canada’s (TC) “pre-feed” costs of $53 to 4$67 million plus a 7.1% penalty known as an AFUDC (Allowance for Funds Used During Construction); a payment which looks like interest to me. Then it only gets more expensive as we enter “Feed” and even larger payments to TC if we don’t continue past there. This is real money we simply no longer have because Parnell busted us.
I don’t see how we could afford the equity position Walker favors let alone Parnell’s; however, I appreciate that as a minority partner all we will provide is money. As I stated, this project is so improbable now that it doesn’t influence my choice for Walker. I have, in my judgment, other valid reasons to fire Parnell now.
P.S. Regarding payment to Amanda, don’t I see a Walker add immediately above the Parnell add?
Amanda,
Many of these issues facing us, such as the gas line issue, are complex and require a vigorous and challenging debate; therefore, the Alaska government could greatly benefit from a forum on topics such as this forum to collect citizen input. I had asked the Lt. Governor to establish such a forum prior to the vote on holding the Constitutional Convention and was ignored.
Those in legislative power allow us a fifty word Public Opinion Message (POM) but only when the legislature is in session; they support an obsolete speaker phone technology and restrict citizen testimony to a few minutes from those not wealthy enough to travel to remote Juneau, or they only allow testimony on issues “by invitation only” from those pre-judged as “worthy” of contributing. Sometimes written testimony is arbitrarily divided into “for” or “against” files allowing the legislators to confidently support their individual positions in mental comfort while able to ignore the possibility of a neutral position on an issue.
Ignorance can only be compensated for by secrecy, exclusion of opposing ideas, and deflection to the irrelevant. Ignorance is not going to solve our future problems and no single political party or individual has all the necessary knowledge we are going to need. Thanks for your efforts.
Stories like this certainly suggest they have communication problems – why didn’t Nizich give this interview a week ago? http://www.alaskapublic.org/2014/11/03/questions-remain-as-details-emerge-from-national-guard-documents/
Forecast – I don’t work for AGDC. I used to work for DNR. I have no professional or pecuniary interest in AK LNG. I do however have a keen interest in our future and this project offers the state the best hope of generating billions in revenue and in providing low cost energy to displace diesel.
In any event, since you know so much about how projects get built, please explain to us how we get permits for this project. In particular, what do we need to do to get through the FERC process? How do we get FERC to issue an EIS? Why wasn’t Bill Walker able to get DOE to give him an export license?
Can you also explain to me how we can start building this project without little things like air permits or 404 permits? How will we know where and how to build the project without permits or what mitigation measures need to be adopted to minimize impacts on things like fish habitat or subsistence values?
And how do we know if the project is economic without having credible cost estimates? How exactly does one get cost estimates? What potential customers
will offer to purchase Alaska’s gas if we don’t even no how much it will cost to
build the project? Are we just going to trust Bill Walker’s former clients to give us a good deal or should we complete the necessary engineering and design work to figure out the real costs of this project?
People like you scare the hell out of me and reinforce my belief that the Walkerites are full of hubris and clueless. Heaven help us.
Second. Amanda, you’ve done a fine job. I hope you can find a way to make this financially viable because, God knows, there is a huge void for you to fill.
@Straight. You’re right about all the press releases and the speeches, but they just weren’t penetrating, and that’s the fault of the administration, I’d argue. It was there job to sell it, and they didn’t.
@Jon. I don’t spend tons of time looking at that stuff, but when I do, I’m surprised how many readers I have. It’s really nice. Although, I think a lot of them are also coming to see what you and others have to say.
Thanks AH HA. I’m sticking around as long as you will continue reading.
That Parnell is advertising- paying Amanda money- ensures she is not meeting the basic standards that real journalist meet.
Amanda does not understand the project well enough to even report the basic details correctly. Alaska is not taking an ownership interest in the pipeline.
Alaska is not closer than ever to getting a project built. That is pure nonsense. The markets wanted a project going by 2019. That would be five years from now. Parnell is saying maybe 2025. Even bloggers should be able to do basic math. 2025 is 11 years away.
There is no agreement to do anything but study a project down a route the was previously rejected in a EIS alternatives analysis.
We can look forward to the day that Jon K and all the overpaid twits at AGDC are fired. That will be soon.
Amen, Sam.
Echo sentiments of those expressing appreciation for good “new journalism” as opposed to what we are seeing at the once-upon-a-newspaper. You have reinvented professionalism in the art and craft of news writing. Thank you.
As for those remarking on Dermot Cole, I am going to save my thoughts for another day, and just let this be a happy tip of the hat to you, Amanda.
I couldn’t agree more….Amanda have you seen a big uptick in page views, or whatever it is that bloggers use to see if people are reading the site, over the past several months? I would hope so.
I would also add that when you have people like Dermot Cole writing about this project, Alaskans are not going to read anything from his pen that gives Parnell credit. About six weeks ago the legislature held a 4 hour hearing where the AK LNG team and DNR testified about all of the work that had been completed, the remarkable team that has been assembled to lead this project, the project’s challenges and opportunities, and the work that wil be completed over the next year. Dermott wrote two articles on the hearing – the first dealt with how a tiny sliver of the information disclosed to the state needs to be held confidential. The second story was how the state may have to use its eminent domain power for the LNG facility. These issues certainly need to be written about, but Dermott is not serving the public by only writing about inflammatory stories designed to illicit opposition.
Amanda, I know it’s not a Pulitzer or anything but I’d like to take a chance to publicly thank you for an excellent job in the build up to Alaska’s election to end all elections.
I’ve found your reporting excellent and your willingness to investigate and show both sides of an issue a breath of truly fresh air. Your commitment to excellence is reflected in the quality of your readers and commenters and I have vastly enjoyed reading many of the comments posted on your blog…There are many walks of life represented here and I suspect political affiliations range from the far left to the far right and include most points between. For the most part, the posts are well thought out ideas from people who have actually taken the time to try to learn about an issue as opposed to a regurgitation of ‘party line’.
Journalists are a dying breed…. please try to stick around!
@Amanda: appreciate your perspective on this, but I call BS on the part about Parnell and his people not talking about it. Leading up to, during, and for months after the session, that’s about all he talked about. And laying put the benchmarks and plan have been a prominent feature of his speeches for the last couple of years. He doesn’t get a lot or trumpeting the the press on general, but the info on the progress was there for anyone who wanted to see it.