Alaska Has a Winning Pipeline Plan, But Fumbling Legislators Could Make Us Energy Losers – Inside Sources

For years, the odds of building an Alaskan natural gas pipeline have been on par with obtaining a hunting license in San Francisco, but that could change very soon.

That is, if Alaska legislators don’t let this opportunity slip through their fingers.

The Alaska LNG project and its 800-mile pipeline are on the one-yard line, a project that Secretary of Energy Chris Wright recently testified was his “number- one priority” for U.S. energy infrastructure.

To emphasize what a huge victory this would be for U.S. energy production and security, Wright went all in with his political capital, adding that he “won’t rest” until the project is completed.

Certainly, this is huge news, as energy costs across the board continue to sting American consumers’ wallets and global energy needs rise rapidly. For the Alaska project, a developer has committed capital. The Federal Energy Regulatory Commission authorized the project after years of engineering studies, environmental reviews and public input. Buyers have even signed preliminary purchase agreements.

Fifty years of waiting for a much-needed Alaskan gas pipeline could end with a simple swipe of the governor’s pen, yet in a maddening display of political horse-trading, misguided amendments have been introduced that would scuttle this sound and realistic plan in exchange for an alternative plan that has more in common with magic beans than energy abundance.

Problems began with disputes between the state House and Senate over the tax structure for the pipeline project, with the Alaska Senate pushing several amendments that could kill the pipeline by undermining its financial viability. Critics of Alaska LNG and the tax provisions approved by the House claim the project is too expensive and poses too great a risk to the state. Yet while they turn their noses up at a proposal resulting from years of study and market review, they embrace a plan that, comparatively, hasn’t progressed beyond a series of sticky notes.

Pipeline opponents are pushing an LNG-by-tanker concept that would scrap the proposed pipeline and require building liquefaction and loading facilities on the unforgiving Arctic coast, and then moving LNG via ice-class tankers to global markets.

This idea is an ambitious concept potentially worth studying, but it’s a concept, not yet a viable project with committed capital, with permits, with buyers, or the backing of the federal government. Abandoning Alaska LNG and the pipeline approach would effectively mean going back to square one.

It’s also important to recognize Arctic tanker proposals have circulated for years. They have produced no serious developer nor financing commitment because the idea doesn’t pencil out. While the challenges for Alaska LNG and its proposed 800-mile pipeline have been addressed in the current plan, the challenges of liquefying natural gas on the North Shore and moving it via icebreaker have drawn no takers, given the risks and the enormity of those cumulative challenges. This lack of stakeholder interest in tankers should speak very loudly to skeptics of the pipeline plan.

Further, the tanker concept leaves Alaskans high and dry for a new gas supply, while the first phase of Alaska LNG delivers pipeline gas to south-central Alaska before exports even begin. With Cook Inlet gas supply declining, this in-state solution is absolutely essential to providing decades of affordable and reliable energy to Alaskans.

Alaska is not choosing between two finished plans. The choice is between a permitted, financed project with the full support of the governor, the House and the federal government, and an idea that, by equivalency, is no more fleshed out than a crude map sketched on a napkin.

The Alaska House has delivered a bill to the Senate that will allow the many benefits of Alaska LNG to become a reality for Alaskans, for the nation and for key trading partners who urgently need American energy.

The Senate has a big decision to make; let’s hope they realize it’s an easy one. After decades of delay, it’s past time for Alaska to turn the promise of a gas pipeline into the reality of secure and reliable energy production for America.