Energy

Federal agency wants state to consider Valdez and Mat-Su for gas line port

  • Author: Alex DeMarban
  • Updated: February 17
  • Published February 16

A federal agency has told the state gas line corporation it has not answered questions about the $43 billion natural gas project and must further analyze Valdez and Port MacKenzie as alternatives to the chosen export site, Nikiski.

The Matanuska-Susitna Borough, in a January filing with the Federal Energy Regulatory Commission, had argued that the Port MacKenzie site in northern Cook Inlet had not been properly vetted.

"The Mat-Su Borough fully supports this worthy effort" and simply requests that its deep draft port be considered, said the borough's mayor, Vern Halter, in a statement Friday.

The Alaska Gasline Port Authority, a municipal group that includes the city of Valdez in Prince William Sound, had argued Valdez should be the terminal and port.

Valdez Mayor Ruth Knight said the city will press for a Valdez selection.

"We are very happy," she said.

FERC is the lead permitting agency for the project.

FERC, in a letter to the Alaska Gasline Development Corp. dated Feb. 15, asks nearly 300 questions about the project's impacts to the environment, economy and cultural resources. Requests from other federal agencies, such as the U.S. Fish and Wildlife Service, also need to be answered, the letter says.

AGDC will work collaboratively with the federal agency to address its concerns, said Jesse Carlstrom, communications manager for AGDC.

The letter is signed by James Martin, a branch chief for FERC. It's addressed to Frank Richards, the gas line corporation's senior vice president for program management.

The letter extends 170 pages, with attachments.

Martin says the agency has made "several requests for information" that have not received adequate responses.

Incomplete answers and repeated efforts to acquire data will affect the project schedule, Martin says.

The state gas line agency took over the project in late 2016, after major oil company partners BP, ExxonMobil and ConocoPhillips backed out, citing concerns about its global competitiveness.

The four partners had spent about $500 million studying the project, which includes an 800-mile gas pipeline from the North Slope. In 2013, the project — led by ExxonMobil then — selected Nikiski to host the port and facility to super-chill natural gas into a liquid so it can be shipped to Asian utilities.

Activity at the terminal and port could sharply boost employment and provide the winning city with revenue for decades — if the project is ever built.

Martin says FERC wants to see an environmental and engineering analysis of Port MacKenzie and a pipeline route heading there.

It also wants an environmental and engineering analysis of a pipeline route to Valdez.

The state gas line corporation has pursued an ambitious schedule to advance the project in the hope of quickly receiving an environmental impact statement from FERC, a key document federal agencies use for permitting decisions.

In January, the gas line corporation announced it had completed its response to 801 FERC questions. Keith Meyer, AGDC president, said then that his organization's "thorough and quick response" was a clear signal that the project was on track to begin delivering gas as early as 2024.

Larry Persily, a former Alaska gas line coordinator under President Barack Obama, said the agency's letter indicates that plan may be delayed.

The FERC letter points out there's still a lot of work to be done before that happens, said Persily.

"It doesn't kill the project," but it could change the development schedule, he said.