The Alaska gas line agency in charge of the proposed natural gas pipeline megaproject is spending about $3 million a month and is not planning to ask the Legislature for more money in the next fiscal year, project officials said Monday in a tense meeting with skeptical lawmakers.
Lawmakers said they weren't happy with the limited financial information the Alaska Gasline Development Corp. had provided for the joint House and Senate Resources committee meeting, part of a regular update to lawmakers about the $43 billion Alaska LNG project.
Legislators and citizens need detailed expenditure breakdowns of the sort lawmakers have received in the past, said Sens. Cathy Giessel and Natasha von Imhof, Republicans from Anchorage.
"We are no longer getting those kinds of reports," Giessel said.
Von Imhof met with AGDC employees on Friday. She said "there was a little bit of dancing" around her request for information on how the agency's financial position will affect its ability to carry out its mission for the next 12 to 24 months.
She said she looked around for more information over the weekend and learned the agency has about $70 million in its budget. Agencies have a responsibility to publicly report their financial information, von Imhof said.
Frank Richards, AGDC senior vice president, said by the time the agency met with von Imhof it had already finished creating documents for the presentation Monday and wasn't able to add those details.
But he said he brought the figures with him to present to lawmakers, and added that they are provided monthly to the AGDC board. He said they will be provided again at AGDC's next board meeting on Monday and are available at agdc.us.
Richards said the agency had spent about $22 million from January through August. The agency's roughly $3 million monthly spending rate is about half what the AGDC board has authorized. He said the agency is trying to operate frugally because of limited funding.
The corporation reported spending $120 million on the project in the fiscal year that ended June 30, 2016, on average about $10 million a month. That year included costly fieldwork, and a large, one-time expense when the agency completed the buyout of TransCanada's interest in the project in late 2015 at $65 million.
Dave Cruz, AGDC chair, said the agency is not planning to request more money from the Legislature for the next fiscal year's budget, which starts July 1.
Over the last year, the state project has lost its one-time pipeline partners — Exxon Mobil Corp., ConocoPhillips and BP — amid low gas prices and a global glut of liquefied natural gas projects. The state and those ex-partners have spent more than $500 million on the project since 2012.
Now the sole owner, the state proposes moving the North Slope's giant gas reserves in an 800-mile pipeline, superchilling the gas into a liquid in Southcentral Alaska, and shipping it in tankers to Asian markets. Gas is not expected to flow until 2024.
The state has been looking for customers to buy the gas, such as Asian utilities, and investors willing to help fund the massive costs.
Giessel said people are concerned that the state may be throwing good money away to keep the project alive, just because so much money has already been sunk into it.
"I hope we're doing a careful job, and we're not budgeting for a project that can really sink the state financially," she said.
In September, Gov. Bill Walker said he would keep the project alive after initially setting a yearlong deadline to decide whether it should continue. He said the project had received an "unprecedented" level of interest from potential gas buyers, investors and top Asian leaders, and cited strong support from the Trump administration in Washington, D.C.
But with the state facing a $2.5 billion budget deficit, Alaskans are wary.
Cruz told lawmakers the project is crucial to future growth in Alaska and could provide gas for several decades.
A demand window is expected to open in 2025, giving the state an opportunity to meet gas needs in Asia as long-term contracts end, Cruz said.
If the state waits, it may not get another shot until 2037, he said.