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Concerned: Dear Japan, we Alaskans still love you -- even as our No. 2 partner

  • Author: Scott Woodham
  • Updated: September 27, 2016
  • Published May 11, 2012
TO: Japan
SUBJECT: Export ranking consolation

Dear international trade partners,

As you may have recently read, it became official. You're now second on the list of countries which import Alaska's goods. At the end of 2011, there was some reasoned belief from state officials that after all the numbers were in, they would find that China supplanted you at the top of the list. And sure enough, it did. Last year, the total value of Alaska goods exported to China was $1.44 billion, up a dramatic 56 percent over the year before, and exports to you were down 10 percent, settling at $1.08 billion total.

We The Concerned are concerned, as is our habit, that you might be feeling a little down about Alaska lately. We just wanted to let you know you're still a very valuable trade partner, and that the decline may actually end up being auspicious.

State officials say China became Alaska's No. 1 export market in 2011 mainly on the strength of increased fisheries trade, plus some changes in petroleum shipping. Overall since 2009, they say, Alaska exports to China have tripled.

Fisheries exports to China increased 52 percent between the first 10 months of 2010 and 2011. And by the end of 2011, China displaced you as the top importer of Alaska seafood products. China soaked up $836 million of Alaska's top export product, and you only purchased $589 million. It might sting to hear, but that's the first time in a very long time you haven't been the No. 1 export market for Alaska's fish.

Another reason you're not No. 1 anymore is that Alaska's exports of liquefied natural gas took a bit of a hit. A long-term LNG contract between Japanese utilities and ConocoPhillips, which operates an export terminal at Nikiski in Cook Inlet, ended in early 2011 and wasn't renewed. The plant was idled in November, but it still made some spot deliveries to Japan, and shipped LNG to other Asian countries, including at least two known tanker loads to China last year. The Nikiski LNG closure was a big reason the state's export of LNG dropped 42 percent in 2011.

Which brings us to why we think your dropping to No. 2 might not be such a bad thing. Contrary to popular opinion, Alaska can be a little cautious, coy even, especially when it comes to selling natural gas. Despite controlling access to trillions of feet, the state has only had one long-term export contract for LNG export in its history, the one for the Nikiski plant. Even though there's not much LNG going out of the state right now, we The Concerned think a trend is developing: Alaska prefers to have its fish products pave the way for a new export market, then LNG.

That's how it worked for you way back when -- first fish, then gas. Maybe it feels more comfortable leading with our strongest, most revered export product, which by far is fish. But whatever the reason, that's how things have worked out so far in an extremely limited sample.

It's almost like flooding a country with fish, roe and shellfish is Alaska's way of testing the water, laying the groundwork for more capital-intensive things like petroleum products and concentrated ores. There's nothing to be worried or self-conscious about with fish. For that matter, there's very little true competition. But one molecule of methane is basically the same as any other, and committing to major infrastructure and forecasting market fluctuations at least a decade out takes a great deal of confidence.

Until recently, the state and its main producers seemed to have little confidence in Alaska LNG. Now, all of a sudden, within the last several months actually, the state, AGIA licensee, producers (and probably the stars) say they're aligned toward Alaska LNG shipments to Asia. And for you, the possibility of Alaska gas shipments probably couldn't come at a better time. You've shut down basically all of your nuclear reactors and are in the process of switching to natural gas for your electricity needs. Several people from the highest levels of your government were in Washington, D.C., recently, and we know they heard about how advantageous Alaska's LNG would be for you, especially in geographical comparison to any sort of LNG terminal planned for the U.S. East Coast.

We The Concerned don't know how the state feels about it, but we see the recent dramatic increase in seafood shipments to China as just the beginning of a long-term plan to eventually ship LNG there. China can have whatever's left over after Alaska 's LNG exports gradually take the place of its seafood exports to Japan. Assuming of course, you have needs left unmet by North American, Asian, Siberian, Australian, Scandinavian, or Russian LNG projects currently under development.

Have faith, even though you fell to No. 2 on Alaska's export list, the tide may be turning. And you're still No. 1 in our hearts.


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