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Federal agency issues key report before Alaska LNG project can be built

  • Author: Alex DeMarban
  • Updated: June 28, 2019
  • Published June 28, 2019

The Federal Energy Regulatory Commission on Friday released a draft review of the $43 billion Alaska LNG project, an important step in the state’s effort to build a gas pipeline.

The three-volume report reviews the environmental impacts of the giant project that, if built, would tap vast amounts of North Slope natural gas for sales overseas. It would require construction of an 800-mile natural gas pipeline, and a plant in Southcentral Alaska to convert the gas into a liquid for shipment in tankers to Asia.

The publication of the draft report marks a key step in the state’s effort to secure a permit leading to construction, an official said. It launches a public comment period through Oct. 3, before a final report and permit can be issued.

Joe Dubler, president of the Alaska Gasline Development Corp., said the report represents “substantial progress.”

“Alaska LNG holds the potential for significant environmental, energy, economic, and employment benefits for Alaskans," Dubler said.

The state applied for the FERC permit in 2017.

“We will now begin to thoroughly examine this comprehensive document to understand the commission’s recommendations," Dubler said. "The ongoing permitting process incorporates 150,000 pages of data and should give Alaskans confidence that the project’s merits and impacts are being rigorously scrutinized.”

The project was launched nine years ago. Gas would not flow until 2025, if ever.

As a candidate last year, Gov. Mike Dunleavy questioned the economics of the project. But project officials and former Gov. Sean Parnell, who launched the project, have stressed the importance of the federal permit, saying it could boost the project’s value for potential investors. Alaska oil producers BP and ExxonMobil recently agreed to provide $10 million each to support the state’s effort to win the permit.

FERC said in the draft report that the project would have significant environmental impacts if it is built. It added most impacts could be minimized.

“However, some of the adverse impacts would be significant even after the implementation of mitigation measures,” the agency said.

The pipeline would have a daily capacity of 3.9 billion cubic feet of natural gas. The Center for Biological Diversity issued a statement Friday saying that could lead to the release of vast amounts of planet-warming, carbon-dioxide emissions.

"Building a gas pipeline across Alaska’s thawing permafrost endangers people and wildlife,” said Kristen Monsell, a senior attorney with the center. “This reckless project would hurt polar bears, whales and coastal communities and escalate the climate crisis.”

Several North Slope gas line projects have failed over the decades, often when gas prices fall. Today, oil companies use the gas to squeeze more oil to the surface by pressurizing reservoirs.

Only one of the failed projects, the Trans-Alaska Gas System, headed by Yukon Pacific Corp., ever received a FERC permit.