A group of Japanese officials have been in Anchorage to discuss sending liquefied natural gas from Alaska's North Slope to Japan.
Some accounts say that the Japanese are interested in building part, or even the entire, big pipeline that would take gas from the the Arctic oil fields to tidewater, but that couldn't be confirmed.
It was unclear whether the officials were representing the government of Japan or one or more private Japanese companies.
Alaska Department of Natural Resources Commissioner Dan Sullivan met with at least two members of the group on Monday and Wednesday. He said the meetings were more of an "introduction" than groundbreaking, DNR spokesperson Elizabeth Bluemink said.
Sullivan characterized the meetings as a "constructive discussion of Japan's potential LNG needs," and he made a pitch for Alaska's gas, Bluemink said. Sullivan regularly meets with countries and potential private investors interested in Alaska's natural gas, Bluemink said.
Lieutenant Gov. Mead Treadwell also met informally with the delegation for dinner.
Japan is already the world's biggest importer of liquefied natural gas, and it is looking to import more gas after the Fukushima nuclear disaster last year, which led to the shutdown of all but two of the country's 54 power plants. There's a possibility that all of the plants will be closing in the spring.
Bloomberg News is reporting that Japan has been actively scouting for more LNG from the U.S. and other countries. It's trying to buy U.S. gas to be shipped from Louisiana, Maryland and Texas. Japanese companies also have agreements with the Russian energy company Gazprom to build an LNG plant in Eastern Russia. Those agreements are expected to be finalized in coming months.
Japan is no stranger to Alaska's LNG. It had a long-standing contract to buy LNG from the ConocoPhillips Kenai facility. That contract expired last year, however, and the plant is currently in "winterization" mode, said ConocoPhillips spokesperson Natalie Lowman. The company plans on resuming exports to Asia in mid-year.
Alaska's North Slope and offshore are estimated to have 236 trillion cubic feet of conventional gas, not including shale and other unconventional sources of gas. To put that in perspective, Qatar, one of the leaders in natural gas production, produced 1.8 trillion cubic feet of gas in 2009. In 2010, the United States consumed about 24 trillion cubic feet total.
The Prudhoe Bay field alone re-injects enough gas every day to power all of Canada for a day.
With those kinds of numbers, it would seem that someone would want Alaska's natural gas.
However, Alaskans have been struggling to persuade oil and gas producers to invest in a multibillion-dollar pipeline to tap those natural gas reserves since the 1970s, when the state's Arctic oil fields were first developed.
Under former Gov. Sarah Palin, the state offered up to $500 million in subsidies to TransCanada Corp. -- the same Canadian company spearheading the controversial Keystone XL Pipeline project in the Lower 48 -- to design and begin construction on an Alaska natural gas pipeline. Exxon Mobil Corp. then got involved in a partnership in the Alaska project. The plan originally was to build the line from Alaska's Arctic to Alberta, Canada.
Because the companies failed to secure shipping agreements, Gov. Sean Parnell recently started laying the groundwork for a shift on marketing Alaska's natural gas. Instead of a pipeline to Canada, Parnell is pushing for an LNG project. The idea would be for an 800- to 1,000-mile-long pipeline from North Slope oil fields to Valdez or Cook Inlet, where the gas would be liquefied and shipped on refrigerated tankers, most likely to Asian countries.
At a Dec. 15 press conference, Parnell said there was a "six-week window" in which he expected to see "new alignment" between the producers that hold leases to Alaska's stranded natural gas reserves. Those six weeks have come and gone.
In early January, Exxon chief executive Rex Tillerson, ConocoPhillips CEO Jim Mulva and BP chief Bob Dudley held a reception in Anchorage and had a private meeting with Parnell. It was rare enough for the CEOs of those companies to visit Alaska, but the fact that they came together convinced many Alaskans that an announcement of the promised "alignment" was imminent.
No such announcement followed.
What they did do was pitch state business leaders to lobby legislators to reduce taxes on the oil industry. And that debate rages today.
Contact Amanda Coyne at Amanda(at)alaskadispatch.com