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