Q&A: Federal regulators push for more information on Alaska’s gasline project

The Federal Energy Regulatory Commission has directed the Alaska Gasline Development Corporation to study the City of Valdez, shown here from the sky, as an optional route for the state’s $45 billion gasline export project. (Photo by Total Heliski)

Last week, the state’s gasline corporation got a letter from the federal agency leading the permitting process for the AlaskaLNG project.

The Federal Energy Regulatory Commission says the state agency isn’t answering a lot of its questions. Regulators wrote that the state hasn’t sent information that is crucial for analyzing the $43 billion project.

Rashah McChesney from Alaska’s Energy Desk covers the state’s gasline project, Alaska Public Media’s Lori Townsend spoke with her to find out more.

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Can you tell me more about this letter? What was in it?

Right, so the Alaska Gasline Development Corporation has been waiting for a response from the Federal Energy Regulatory Commission since January. That’s when the state corporation announced that it had finished responding to hundreds of questions that the federal agency had asked.

In fact, I spoke to gasline corporation head Keith Meyer last month and he described the 6-foot high stacks of documents. They’re just shy of 100,000 pages that they’ve turned over to the feds about this project.

He was hoping that they’d get a response with a schedule in it – something that would lay out how long it would take for the federal agency to do an environmental review of the project and issue a draft of the permit.

But, that is not what happened.  Instead, the federal commission just came back to the state with more questions.

And, it didn’t just come back with more questions.  Federal regulators wrote that the state has answered some questions by saying that it wouldn’t provide the information because the studies aren’t required by the state or other agencies at this point. If the state keeps responding this way, regulators says it will delay the timeline for getting that environmental review.

To that end, the regulatory commission sent along a 170-page letter with all of these questions that they say need more adequate responses. They’ve given the state 20 days to respond.

It seems like a lot of information to compile and get sent off in 20 days, what can you tell us about the list of this requirement?

Well, I checked in with the gasline development corporation and what they’ve told me is that they plan on getting ahold of federal regulators in early March, or at least by early March and sending them a schedule of how long it’s going to take them to answer all of these questions.

A lot of them are going to require, really detailed analysis and more field work and things that either haven’t been done yet or are going to take a lot of man-hours to complete.

Ok so what kind of questions is the regulatory commission asking?  

These are really specific data requests — Everything from plans the state project has to avoid wildlife and monitor the health of marine mammals to what kind of grass the project will use to revegetate certain areas.

The federal agency wants to see a plan for monitoring permafrost and erosion along the pipeline. It wants to know the exact location of ice roads and bridges that will be built during construction.

They want to see details on how roads will be moved and which private wells that are located near the project will be monitored for contamination – they want a lot of this information that people who are going to be affected by the project need have a chance to weigh-in on the permit.

The federal schedule for getting through an environmental review is packed with public comment periods and other federal agencies weighing-in on certain aspects of design and construction.

Ok, aren’t there also though, some bigger questions too? The Matanuska-Susitna Borough and Valdez have weighed in on the state’s project as well, and they’re not happy

Right!  So, beyond these hyper-specific details about how and where and what impacts construction are going to have in Alaska. The Federal agency says the state hasn’t done enough studying of alternate routes for the pipeline and port at the end of it.

The Matanuska-Susitna Borough contacted the federal agency in January, and it argued that it its Port Mackenzie site hadn’t been adequately vetted. In fact, the borough argued that its port was eliminated because the Alaska LNG project had mistakenly studied the wrong site.

Borough officials say that ending the pipeline at their port could save billions because the pipeline would be about 50 miles shorter.

And Valdez is fighting to get the project moved too – a group there has been arguing that the pipeline should be rerouted and that Valdez should be the terminal and port. They weighed in with the federal agency least year. They said moving the pipeline could provide natural gas along the Richardson Highway and save hundreds of millions of dollars.

Now, federal regulators are specifically directing the state to study these two sites as alternatives.  And this could be a big problem for the state’s timeline.  Keith Meyer told me last month that the state inherited this route when it took over the project in 2016. But, it could take years of additional studying to figuring out if these routes are feasible. He says the current route is the one that has to happen in order for the project to get built in time.

What does he mean by that? In time for what?

So there’s this window when global natural gas demand is projected to skyrocket.  The idea is to bring the state’s gasline project online in time to export to Asia to meet that demand.

So, right now, the state is on a tight schedule to get these federal permits – Meyer says he wants it done by the end of this year. 10 months. The state wants to start construction in 2019.

They’re trying to build a facility on the North Slope, an 800-mile long pipeline, a massive plant in Southcentral Alaska.  And these data requests mean that the state has to spend more time and money doing fieldwork and analysis and it could affect the project timeline.

And there’s also this ripple effect right? Because, at the same time they’ve got to get all commercial agreements in place – negotiate with the North Slope producers to sell the gas, negotiate with equity partners to help pay for building the $45 billion project, negotiate with potential buyers of the gas. There are just a lot of moving pieces that have to fit together for this project to make it to the finish line.

Absolutely a lot of moving pieces. Have you heard from the state corporation in response to this letter? What are they saying?

Well, like I mentioned earlier, I spoke with them today. And their message is largely hopeful. I spoke with Jesse Carlstrom, he’s a communications manager at the corporation.  He says they’re confident that the federal commission will have the information it needs to prepare that environmental impact statement this year.

And like I said, they will respond by earlier March but even if they get that draft permit issued by the end of the year, there’s still at least a 45 day public comment period that has to happen at the end of issuing that draft permit and sometimes it’s even longer for large-scale projects.

So, there’s definitely not a lot of room for error and a lot of potential delays that are popping up this year.