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Thar she flows! It's the Alaska gas line ... can you see it? Can you?

  • Author: Paul Jenkins
  • Updated: June 29, 2016
  • Published September 19, 2015

Count me among the legions of suckers hungry for happy endings; the hapless mopes actually surprised when Lassie runs to summon help for Timmy in the well; whose eyes still get misty at the end of "It's a Wonderful Life"; the dupes who thought, "Hey, everybody finally is on the same page -- Alaska really might get a gas line this time."

We should have known better. It appears Alaska's lengthy, painful pipeline hopes -- up and down more often than Bill Clinton's pants -- again are scraping across a rough patch rubbed raw by the natural friction between business and government.

Because of competing interests and responsibilities -- that shareholders v. politics thingy -- government and business cannot function alike. Stir in a few inflated egos, a roller-coaster gas market, a megaproject with a company-breaking price tag upwards of $65 billion and the fireworks potential is off the charts.

While Gov. Bill Walker was off doing whatever he was doing last week in Japan -- ostensibly trying to peddle Alaska liquefied natural gas he does not own -- he left a fuse smoldering here.

The state, ExxonMobil, ConocoPhillips, BP and TransCanada are partners in the massive Alaska LNG Project. The idea is to build a 42-inch-diameter pipe to move perhaps 3.5 billion cubic feet of natural gas daily from Prudhoe Bay and Point Thomson to an LNG plant and export terminal in Nikiski.

Negotiations are underway to set the project's whozits and whatzits, and nail down details and fiscal certainty for the North Slope producers, who are taking the lion's share of the financial risks. From all accounts, the talks are not going swimmingly, and Walker's administration told lawmakers an anticipated fall special pipeline session is off. Reason? Differences among the partners.

That is no surprise. Walker has a penchant for tossing monkey wrenches. He wanted to expand the $10 billion Alaska Stand Alone Pipeline to compete with the larger project -- touching off a war with the Legislature and triggering corporate night sweats. He wants to buy out TransCanada, expanding Alaska's ownership to 25 percent of the entire project, not just 25 percent of the LNG plant. He wants to expand the pipeline's diameter to 48 inches, further balling up the wax. You can almost hear Alaska's partners choking. What he really wants is to be Wally Hickel, a do-it-my-way-or-else iron man ruling the Owner State with an iron fist. Walker channels him regularly.

All that prompted ExxonMobil Chairman Rex Tillerson, in Natural Gas Week, a trade publication, to take a shot or two, saying Alaska is its own worst enemy.

"I have a long history with this, and I always tell every governor of Alaska, 'You are not waiting on us. You are waiting on you,' " he told the publication. "And every governor that comes in decides they've got a different way of doing this, which is why it never happens. You can't take a project that is going to take five-six-seven years to execute and require $50 billion-$60 billion of capital and decide every two years you've got a different way to do it."

While Tillerson is quick to blame Alaska, he conveniently leaves out the economics of the story: Since the battles over building a major gas pipeline in Alaska started in the 1970s, development of Alaska gas never has been commercially viable. Arguably, even with an administration completely gung ho to build a line, it would not have been built.

For his part, Walker told the Alaska Dispatch News some companies are uncomfortable with his administration's more aggressive stance. Then, unable to leave well enough alone, he went after ExxonMobil, hinting -- despite observers' contentions the company is more than pulling its weight -- that the negotiating process was hobbled by the "slowest moving" partner in the project; that he was pleased with the "pace of BP and ConocoPhillips."

It is just more of the same. Alaskans' gas line dreams started in the 1950s, with the discovery of gas north of Fairbanks. The dreams faded. In 1967, huge gas reserves were discovered at Prudhoe Bay, and Alaskans waited. As the trans-Alaska oil pipeline was built in the 1970s, Alaskans waited. Decades passed; Alaskans waited.

Gov. Sarah Palin in 2007 rammed through the Alaska Gasline Inducement Act, seemingly designed to keep North Slope producers from building a line. Alaskans waited while BP and ConocoPhillips formed the Denali pipeline project. That dream faded, too, a victim of AGIA and fracking that killed North America's market for Alaska gas.

Yet, here we suckers are, waiting yet again as the latest wobbly partnership edges toward the seemingly impossible.

Waiting for that happy ending.

Paul Jenkins is editor of the AnchorageDailyPlanet.com, a division of Porcaro Communications.

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

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