Home Forums Hunting & Shooting Alaska State Taking Over Gas Pipeline Project

The State putzes have screwed up everything they have ever touched... and now they want to take over a huge project the oil companies do not believe is worthwhile... and somehow the nuts in charge of the asylum think they can make it work?

Time to make Walker go away.


https://www.adn.com/business-econom...project-state-is-taking-over-the-effort/

New milestone in the gas line project: The state is taking over
Author: Alex DeMarban Updated: 2 hours ago Published 13 hours ago
The state gas line corporation on Wednesday reached a milestone in its effort to take over the Alaska LNG project, authorizing two agreements with Exxon Mobil, BP and ConocoPhillips, including one giving the state the rights to about $600 million worth of accumulated project data.

The second agreement allows the state to notify the lead permitting agency, the Federal Energy Regulatory Commission, that the three oil companies will withdraw from the gas pipeline application they have before the agency, leaving the state-owned Alaska Gasline Development Corp. as the lone applicant.

Neither agreement can be disclosed because of the state's confidentiality agreements with the oil companies. The Legislature has given the project a broad exemption to state public records law.

Two other transition agreements must still be completed, with plans calling for signing those early next year, said Keith Meyer, AGDC president. Those agreements would give the state the project's federal export license and control of land near Nikiski to build a plant to liquefy North Slope gas, key assets currently owned by the oil companies.

"Big day," said Meyer, shortly before the seven-member board, with board member and state Labor Commissioner Heidi Drygas excused for an absence, approved the signing of the agreements with no dissenting votes.

The oil companies have pursued the project since 2012. The state later became an equity partner, spending about $140 million of the roughly $600 million spent on studies and other costs.

The changes to the joint venture agreement providing information to the state also includes historical data from past gas line studies in Alaska, said Meyer.


"It includes 33,700 pages of resource reports filed with FERC," he said. "A lot of effort went into those reports. So it's all that information in those reports, but also all the data used to generate those reports."

The oil companies grew wary of spending more money on the $55 billion project following the release of a report in August by energy consulting firm Wood MacKenzie. The study viewed the project in its current form as uncompetitive, due to its high costs and a glut of LNG projects competing around the world.

But the study also said a state-led project could achieve advantages that lower costs and improve its outlook, including possible federal tax exemptions. The oil companies have said they will provide gas to a state project at commercially reasonable terms.

Gaining state control of the export license and the land could cost AGDC, said Dave Cruz, board chair.

Meyer said the agency currently has about $100 million to work with, including about $70 million that has been part of a smaller gas line project under AGDC's control known as the Alaska Standalone Pipeline Project, designed to provide in-state gas if a large-diameter pipeline isn't built.

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Alex DeMarban

Only a politician would think that a project that business won't take on because it isn't profitable could be made profitable if the government takes it over.

Sad to say I have better prospects of working on a Canadian pipeline project than an Alaskan one.

You moving to Kitimat?

Fortunately if we get the project I'll be staying in Anchorage. But likely spending some time in our Edmonton office and eventually be traveling to the pump stations and terminal for commissioning. We're also looking at a fair bit of work in Fort McMurray in the tar sands processing facilities and the refinery in Edmonton.

Walker is toast because of the PFD confiscation but his fascination with the pipeline is just crazy.

Probably related to last week's surgery... wants to maintain the flow... there probably are a few more connections to be made there as well.

Worse than the PFD take was cancelling the tax credits to the oil industry as it halted oil fields that were being engineered and most likely would be adding oil to Taps in the next few years.

If Walker wasn't such a phuquetard he'd realize that state could invest millions in the oil industry which would be returned many times over on oil tariffs in an existing pipeline vs. blowing billions on a project that won't be able to collect a penny in tariffs due to the economics of the project.

Unfortunately our state seems to have plenty of people that somehow think oil companies are just greedy entities out to get the state and the mythical gas pipeline is the answer to our economic woes. Some how ignoring the 100 billion or so the oil industry has brought to the state through projects they deemed profitable and maybe thinking if they can't make a profit at it, we should follow their lead.

The only "investment" I can back the state doing is extending the Dalton 200 miles to the West to reach the new discoveries. A "roads to resources" type of thing. The state knows how to build and maintains roads - something they can't fook up too bad.

Silly chit and good luck to them...

Client? If OK to release.

I cannot fathom what the State is doing here. There just has to be more to this story...

The driving forces behind the gas line has more to do with the Fairbanks social justice warrior scumbags and anti-woodstove nazis ginning up the war against ice fog, and highway residents wanting a cheaper source of energy than it has to do with any world demands.

Those alone can't support the initial costs of building it.

Lord save us from the folks trying to save us. Amen

Between mishandling pot sales and running up the budget ridiculously over the last decade or so it only makes sense for the State to aim for the Idiots' Trifecta!

Neither agreement can be disclosed because of the state's confidentiality agreements with the oil companies. The Legislature has given the project a broad exemption to state public records law.

This kind of secrecy crap should be illegal. They're using the extorted tax dollars to fund their project but refuse to let the people (their "bosses") know the details.

Barley

Dairy

Gasline


I see a pattern.

"This kind of secrecy crap should be illegal."

You're damn right it should. How did this ever pass?

Noticed this article on the cover of a freebie left-of-center mag called High Country News, which was in the lobby of a building where I had lunch. I've read several of their articles over the years, and usually find them fairly factual with the predictable spin. Anyway, it was called "The Alaska Pipeline that Wasn't" or something like that.

I'll yield the point that buying low to support selling high is a good idea. Also, LNG markets will come and go. Aside from that, it could be a yuge boondoggle. Maybe you AK guys can fact-check it for me.

High Country News – Alaska’s Gas Pipeline Dreams
In the summer of 1970, Bill Walker was hanging around the Johnson Trailer Court in Valdez when he was offered a job building the Trans-Alaska Pipeline. Walker had completed a year of community college but was out of money and couldn’t afford to keep taking classes. The pipeline felt like his ticket to a better-future.
Engineered to carry crude from the roadless North Slope to ports on the southern coast, the Trans-Alaska Pipeline brought jobs and revenue to the 49th state, transforming it from roughshod frontier to global energy powerhouse and lifting Walker and others from poverty along the way. Walker used his earnings to put himself through college, then law school. At 27, he became the youngest mayor of Valdez. He founded a law firm specializing in oil and gas issues. And in 2014, the lifelong Republican ran as an Independent to become Alaska’s 11th -governor.
Yet Walker’s tenure coincided with a financial crisis. Oil prices have plummeted, thousands of Alaskans have lost their jobs and the state faces a $3 billion budget deficit. Meanwhile, many North Slope oil wells are slowly drying up. The pipeline now carries just a quarter of the crude it once did, and the U.S. Energy Information Administration predicts that if production continues to drop, it could be decommissioned as early as 2026.
That’s a devastating prospect for Alaskans, who depend on oil pumping through the pipeline for nearly 90 percent of state revenue. Even if oil prices bounce back, the state’s financial future remains hitched to a declining, volatile commodity. But Bill Walker believes there’s an obvious path to prosperity: Build another pipeline, this time to transport the 34 trillion cubic feet of natural gas stranded -beneath the -frozen North Slope.
The proposed gasline and accompanying liquified natural gas (LNG) plant could bring 15,000 jobs and a flood of revenue, which Walker hopes could be used to develop other industries, such as mining, reducing the state’s dependence on oil. But given the current fiscal emergency, a growing number of skeptics wonder if the new pipeline will be a boost — or a -blunder.
he idea of moving natural gas from the North Slope to a plant where it can be liquified and shipped overseas was first proposed in the 1970s. But because re-injecting gas into oil wells to bring up greater quantities of crude proved more profitable than shipping it to market, the gasline never materialized. Instead, the project hovered like a mirage — tantalizing, but just beyond reach.
For years, Walker worked behind the scenes to convince oil producers of the plan’s merits. “I watched all these other LNG projects be developed around the world,” he says. “But ours was like milk with no expiration date — it never got to the front of the shelf.” Finally, he became convinced that the best way to get the pipeline built was for the state to take over, and the best way for that to happen was to spearhead it himself. So in 2014, he ran for the governor’s office on a pro-pipeline platform — and won.
By this point, Alaska already had a state-owned gasline corporation partnering with several oil companies. Walker’s administration kicked it into high gear. Shortly after his election, the state paid $65 million for TransCanada’s 25 percent stake in the project. The corporation hired a new CEO with a $550,000 salary, and a state agency estimated that extracting North Slope natural gas could soon be more profitable than injecting it to stimulate oil wells. Things looked promising.
That changed in August. Cheap natural gas had flooded the global market, and the energy research firm Wood Mackenzie concluded that the Alaska LNG Project’s $45 billion price tag made it one of the least competitive proposals of its kind worldwide. ExxonMobil, ConocoPhillips and BP abruptly backed out.
Industry analysts predicted that without the oil companies’ backing, the project was dead. But Walker saw this as an opportunity for the state to assume full control of it. Walker believes that by the mid-2020s, as the global oversupply diminishes, Asian countries will be again hungry for gas. He’s hoping to find outside investors, such as Asian utility companies, to fund the gasline.
Yet many Alaskans and analysts remain skeptical. “I think investors will be very reluctant,” says Larry Persily, who has worked on Alaska oil and gas policy for 20 years. He points out that the state has barely begun the regulatory process, creating uncertainties that may dissuade investors. “You don’t know how much the project is going to cost or when they’d make first deliveries,” he says.
Plus, lawmakers are concerned about the cost of state involvement: Every dollar spent on the pipeline is a dollar that doesn’t go toward schools, law enforcement or other services. “The budget is strapped,” says state Sen. Cathy Geissel. “Alaskans are very concerned about going this alone.” If three major oil companies consider the project a financial gamble, she adds, why would it be any different for the state?
Still, Persily and Geissel believe that though the timing isn’t yet right, the gasline will one day be built, and they’re prepared to be patient. But as a mid-term governor forced to make unpopular cuts to education, transportation and social services, Walker doesn’t have time to wait for a market shift. “Politically,” Persily notes, “I’m not surprised that the governor has said this is the right time.”

It seems that the key word is "Valdez".

Spending that kind of money right now to transport dirty gas is beyond ludicrous. There is a lot of gas there, but it is over 11% CO2 and H2S is high and climbing... getting it ready to market will cost more than it is worth. Getting it to market is completely out of line.

The 65 million spent just to buy a quarter of the project is unreal...