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Here we go again: Another pre-election gas line study

Bill Walker
OPINION: Alaska should ask at least 10 questions about the new bill to spend millions on a study a natural gas project. For starters: Where is the data TransCanada was paid to prepare?
Aaron Jansen illustration

Here we go again. With another gubernatorial election we get another gas line study (SB 138) designed to fool voters into thinking there's progress on gas line development.

During Governor Parnell's six years, Alaska has spent $280 million with TransCanada and Exxon under the Alaska Gasline Inducement Act. AGIA specifically provided for a large-volume gas pipeline to tidewater for an LNG project. TransCanada did preliminary engineering to hold a binding open season for a large volume gas line to tidewater in 2010. Rather than use that valuable and expensive data, Parnell is starting over with yet another study with ExxonMobil, BP and ConocoPhillips. With such reckless expenditures, it's no wonder Parnell has started creating multi-billion-dollar deficits.

Here are my top ten questions about SB 138.

One of AGIA's selling points in 2007 was that it provided for both a gas line to Canada and a large-volume gas line to tidewater for LNG export. Where is the engineering and cost estimate data TransCanada was paid to prepare?

TransCanada/Exxon Mobil held a second Solicitation of Interest for an LNG tidewater project as required under AGIA in September 2012. The markets responded with a 200-percent demand of the gas volume needed for a large-volume line. But TransCanada and Exxon chose not to respond to the market. Why was TransCanada not fired?

Why has Parnell now given TransCanada Alaska’s seat at the table, further entangling Alaska’s future with TransCanada potentially well beyond the normal expiration of AGIA?

TransCanada's sister entity and half-owner of the AGIA contract, Foothills Pipeline, fought Alaska fiercely to block the granting of an LNG export license. Why is Parnell transferring our authority to this known competitor that demonstrably does NOT want an Alaska LNG project?

Why does Parnell continue to put gas line decision-making control in the hands of Alaska’s competitors? These trans-national corporations are actively developing competing LNG projects around the world, in countries where they are not allowed to warehouse the gas, in direct competition with Alaska.

Why is it that every time there is an oil tax question on the ballot (e.g. the gas reserves tax in 2006), we see a sudden flurry of activity in the gas line study business and millions expended in producer media campaigns?

Why does Parnell continue to mislead Alaskans by saying the gas line is a go, when in fact it is another expensive 18-month gas line study that we will fund but which will not control the decision-making?

Why does Parnell continue to say AGIA is over when, by the terms of the Memorandum of Understanding between Parnell and TransCanada, AGIA is clearly not over? We will continue to pay TransCanada under AGIA until there is a “trigger event” which will never happen under the terms of SB 138.

Why are fiscal concessions sought by the producers now in exchange for just another study when there has been absolutely nothing presented justifying that any concessions are needed at all?

Why is the Legislature not soliciting expert testimony from companies such as Wood MacKenzie, one of the world’s preeminent experts on oil and gas? In 2011 Wood MacKenzie released an analysis on Alaska’s LNG project showing that LNG from Alaska, delivered to the Asian markets, is more profitable than competing projects in Australia, British Columbia and the U.S. Gulf Coast, and could generate up to $419 billion in revenues for Alaska over the first 30 years of the project.

When Parnell claims he has alignment with the producers, be wary. Parnell has failed to deliver on a gas line after six years in office. He needs this newest study to pretend Alaska is making gas line progress as part of his re-election strategy. The producers need it to influence voters on the SB 21 oil tax referendum in the August primary. Legislators need to hold this administration accountable for its six years of failure and they must hear from experts on the many unanswered questions.

Bill Walker is a lifelong Alaskan who as an oil and gas attorney and as Alaska Gasline Port Authority Project Manager has worked to develop Alaska's vast resources for decades. He is an independent candidate for governor.

The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch, which welcomes a broad range of viewpoints. To submit a piece for consideration, e-mail commentary(at)alaskadispatch.com.