OPINION: Building a gas pipeline for energy and economic security

The Anchorage Daily News editorial board clearly read the recent analysis of the financial viability and economic benefits of the Alaska LNG gas line, but must have spilled coffee on the pages that outline the substantial reasons for working together to bring this project across the finish line — namely, the $16 billion in benefits the state will receive from utilizing our own natural gas.

Chief among the benefits detailed by Wood Mackenzie, the independent energy experts who conducted the analysis for the Legislature, are jobs. Jobs we won’t create if we import energy for the foreseeable future. Wood Mackenzie determined that the Alaska LNG pipeline is economically viable based on demand from Enstar and the Railbelt utilities without the need for an additional industrial anchor customer. For the first time, we have an in-state pipeline, using our own North Slope gas, that makes economic sense.

Building the Alaska LNG pipeline would solve challenges we face today and would build a stronger Alaska for tomorrow. As the ADN has repeatedly reported, thousands of Alaskans move away every year with no intention of ever returning. Our state offers diminishing opportunities for our workers. Building the pipeline will create thousands of new jobs, both construction and permanent operations jobs, that will be among the best paying in the state. Other benefits include increased economic development created by the pipeline’s affordable energy and cleaner air in Interior Alaska.

The ADN editorial stated concern for the “many other state services that find themselves short on funding,” but it did not mention how Alaska actually pays for these items — the gas pipeline’s $16 billion boost for our economy will feed, not starve, these services.

Alaska LNG will deliver dependable energy for Alaskans and a valuable product for export, providing hundreds of millions of dollars to state coffers each year through production taxes, royalties, corporate income taxes, and property taxes. Alaska LNG will provide another stream into the Permanent Fund and the Power Cost Equalization fund, established to offset astronomically high rural energy costs and the transition to renewable energy.

As both the governor and AGDC officials have repeatedly made clear, Alaska LNG will only move forward if the private sector pays for it. That’s why I take exception to the misconception that the state is being asked to pay for the pipeline. It is not. Construction of the $10.8 billion Alaska LNG pipeline and other project components is predicated on securing private funding. The backstop commitment that the Alaska Industrial Development and Export Authority recently authorized is a state incentive that unlocks the $50 million in private investment needed to complete the final design before investors, not the state, decide whether to build and pay for the pipeline.

The ADN seems burdened by previous iterations of North Slope natural gas projects — which it acknowledged in writing, “decades have passed since those promises began.” The editorial board overlooked two critical developments that separate Alaska LNG from past efforts: First, after Alaska LNG started, the Alaska Oil and Gas Commission expanded the amount of North Slope natural gas available for offtake because less gas was needed for oil production. There is now enough gas available to support Alaska LNG. Second, Alaska LNG received its final federal permit just two years ago after five years of rigorous environmental scrutiny and legal challenges from Lower 48 environmental groups.

Both developments were needed for AGDC to enter credible negotiations with investors. Notably, Alaska LNG’s investment negotiations have progressed through two global energy market disruptions — the COVID-19 pandemic and Russia’s invasion of Ukraine.

This past spring, the AGDC board took the responsible step of setting a deadline for demonstrating progress on this project. That deadline has not passed. AGDC leaders have until the end of the fiscal year to identify the path forward for privately led development of Alaska LNG’s pipeline. Pre-judging the outcome of that work is reckless editorial policy.

Now don’t get me wrong, we will need to import energy for a short time, less than five years. But the pipeline gives us control over our own energy destiny with all the benefits that will be missed with permanent imports. Alaska LNG has permitted designs and the land for a terminal that can speed short-term imports while pipeline construction is completed. We do not face a choice between imports and a pipeline — we need both. Alaska LNG provides an elegant, efficient hybrid way to keep the heat and lights on uninterrupted for decades to come.

Alaskans have pursued different versions of natural gas projects for a long time because the prize is too big to give up. The North Slope has hundreds of years of energy that can benefit us all. That’s why it is so disappointing that the ADN editorial board threw in the towel and quit while the clock is still running.

Doug Tansy is the business manager of IBEW Local 1547.

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