Alaska LNG Export Project Hits A Couple of Bumps in D.C.

Download Audio

Gov. Bill Walker on Tuesday  announced an agreement that could help sell Alaska liquefied natural gas in Japan, but the effort to build a trans-Alaska gas pipeline  is meeting some resistance in Washington, D.C. Lack of political support there is forcing the federal coordinator for the Alaska gas pipeline to close up shop. Also, opponents of gas exports are raising their voice, and their targets include the pipeline Walker and many Alaskans pin their economic hopes on.

Larry Persily, the federal coordinator for the Alaska gas line, figures they’ll close the doors on their offices in Washington and Anchorage at the end of February. Until then, Persily says, they’ll be organizing files and archiving material.

“We have some leftover funds from previous appropriations that we haven’t spent, and we will be using those savings for an orderly shutdown,” he said.

Persily says the 2004 law creating the federal coordinator’s office was intended to expedite permitting for a different pipeline, one that would take North Slope gas through Canada and into the Midwest.

“Back in 2004 the idea was if you don’t get Alaska North Slope gas into the North American grid, if you don’t get Alaska gas to the Lower 48, the Lower 48 could go cold, you could run out of gas for generating plants for electricity,” he said.

Then came the fracking boom and suddenly the Lower 48 has more gas than anyone could’ve imagined. So proponents of the Alaska project revised the plan. Now, the state of Alaska and the producers intend to build an 800-pipeline to Nikiski and export LNG by ship. Officially, though, the Office of the Federal Coordinator is still supposed to be working on a pipeline to the Lower 48, and Persily says only Congress can change that.

“The House and Senate when they passed the 2015 budget did not include any funding in there for the gas line office. The law wasn’t changed. So the combination is, we close down,” he said.

A spokesman for Sen. Lisa Murkowski says she’s committed to ensuring someone is responsible for coordination. Robert Dillon says Murkowski tried last year to update the authorizing law for the coordinator’s office but then learned the producers don’t find the office necessary. He says the senator wasn’t able to get the appropriation this year. Dillon points out the budget request President Obama sent to Congress had no money for the office, either.

Under Persily, a former journalist, the coordinator’s office has primarily been an information agency.

His staff has produced white papers and maintained a website with news about permitting, the LNG market and competing efforts. Persily acknowledges the loss of his office doesn’t derail the pipeline.

“Certainly other pipelines, refineries have been built. Oil and gas production facilities. There are a couple of LNG export projects under construction. They were all done without such a coordinating office,” he said.  “But they were much smaller projects than this.”

The main barrier for the pipeline remains that no one has committed enough capital. Altogether, it’s expected to cost as much as $65 billion.

Meanwhile, though, the Alaska project is being swept up in the national opposition to LNG exports. More than 100 advocacy groups sent a letter this week to Energy Secretary Ernest Moniz urging him to withhold support from bills that would expedite federal permits for gas exports around the country. Groups ranging from the Sierra Club and United Methodist Women to the National Nurses Union signed the letter.

“Responsible climate and energy policy is to keep natural gas underground and refuse to export it to other countries,” the letter says in part. “Otherwise, we will sink hundreds of billions of dollars in decades-lasting infrastructure, diverting investment from renewable technologies, such as wind and solar.”

One of the groups that signed the letter was the Center for Biological Diversity. Its Alaska director, Rebecca Noblin, says that, though the letter mentions gas from fracking, their opposition extends to North Slope LNG exports, too.

“The Alaska project, like any other LNG export project, just poses too great a risk to the climate to go through a fast track permitting process,” she said. “When you look at the state of the climate right now, we really should be putting the brakes on fossil fuel development, not greasing the wheels.”

Natural gas has a mixed reputation in environmental circles. One the one hand, when burned to create electricity, it emits far less carbon dioxide than coal. But when natural gas leaks into the atmosphere unburned, scientists say it becomes an especially powerful greenhouse gas. Opponents say liquefying the fuel also adds to the impact. The industry says it’s drastically reduced natural gas leaks from its operations.