Alaska LNG: The time is now

Alaska now has the necessary alignment for the Alaska gasline LNG project. Mid-June 1970: one of the most important days in my life. It rained, as I waited in line outside a trailer in Johnson’s Trailer Court in Valdez to receive my first dispatch. That day, I received my first dispatch ticket from Laborer’s 341 business agent Jim Robinson to begin work on the trans-Alaska Pipeline System (TAPS).

 

At 19, I knew that beginning that day my life would never be the same. That dispatch, and others as a Teamster and a Journeyman Carpenter in Local 1281, to work on the oil pipeline opened educational opportunities I never would have dreamed of, and later brought into my world, the woman of my dreams.

At that time, I had just finished my first year at community college in Oregon, made possible by a $400 basketball scholarship and housing with the family of a former elementary school teacher. However, after that first summer working on TAPS, with my oil pipeline paychecks in hand, I transferred to a full four-year college. That pipeline construction also drew a young woman named Donna Pyle to Alaska, (now Alaska’s first lady).

I now have another important date to remember: Nov. 9, 2017. The day that all the entities needed to build the Alaska LNG Project signed the Joint Development Agreement (JDA). The U.S. and Chinese governments, at the highest level, vetted and deemed qualified the JDA. All five signers of the JDA have formally committed to work to monetize Alaska’s stranded natural gas.

This unique agreement differs from the past attempts to monetize Alaska’s vast resources of stranded North Slope gas. Let me be clear, this is a non-binding agreement, as are all such agreements for projects of this size at this stage of its development and there is more work to be done to get to binding agreements by the end of 2018. However, for the first time we have the state (as owner and builder), as well as the buyer, the investor and lender signing the Agreement. President Donald Trump and President Xi Jinping — heads of the world’s two most powerful economies — witnessed and approved the signing of the JDA.

Never in the prior efforts to build an Alaska gasline have the interests been aligned like this:

• We have a federal administration focused on infrastructure and resource development; an administration that views Alaska as playing a crucial role in securing the nation’s energy dominance and in offsetting the trade deficit.

• For the first time, Alaska has a customer: China — which will be the largest consumer of liquefied natural gas (LNG) in the world. Cleaner air is a top priority for the Chinese government, as for Alaskans, and Alaska’s natural gas will play an important role in that effort by reducing the emissions by 80 million tons per year.

The buyer, the investor and the lender who have signed on to the Joint Development Agreement are big players.

• Sinopec, the buyer, world’s largest integrated oil and gas company and ranked the third-highest revenue-generating company by Fortune Global, which ranked Apple ninth and ExxonMobil tenth.

• China Investment Corporation, the investor, ranks as the largest sovereign wealth fund at $813 billion behind Norway and Abu Dhabi respectively.

• Bank of China, the lender, as the fourth largest bank in the world it has financed many LNG projects worldwide.

Once construction begins, the Alaska gasline will be one of the largest infrastructure projects on the continent, and it will be the biggest economic boost to the state since construction of the oil pipeline, TAPS. It will generate between 10,000-12,000 construction jobs for Alaskans and up to 70,000 total jobs. It will bring $2 billion into the state economy each year over the life of the project (40 plus years). Payment for the project will come from the long-term sales of the gas.

But, more than just another boom in Alaska’s economy, it will open the door to Alaska for many underdeveloped opportunities between Alaska and Asia: direct flights to bring thousands of tourists from Asia; increased agriculture, mineral, and timber export markets as well as continued growth in seafood exports to Asia.

Finally, Alaska can go from having the highest cost of energy in the nation to the lowest. It will help other industries become economical, like mining, because it will help to lower the cost to do business. The gasline will bring clean burning affordable energy to Alaskan homes and businesses. This gasline will mean cleaner air in the Interior. It will mean families will not have to choose between heating their homes or paying for groceries. The gasline means thousands of jobs within 10 years; jobs that bring purpose, change lives, provide for a healthy future and fuel generations. Under the state law, 20 percent of the revenue to the state will be directed to alternative, affordable energy projects for rural Alaska.

While this is Alaska’s gasline, it has become a Project of National and International significance. A big project with big players and big benefits to Alaskans. The time is now.

 


 

• Bill Walker, an independent, is the governor of Alaska.

 


 

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