 Governor Bill Walker (NGP Photo) wrapped up his final day of meetings to discuss Alaska’s liquefied natural gas potential to prospective customers in Japan. More from Office of the Governor. |
ADN Op-Ed by Paul Jenkins. … 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. … 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. (See our weekend commentary) He wants to expand the pipeline’s diameter to 48 inches, further balling up the wax. You can almost hear Alaska’s partners choking. More….
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Palmer Frontiersman. Cruz re-appointed to AGDC board Palmer’s Dave Cruz has been re-appointed by Gov. Bill Walker to serve on the Alaska Gasline Development Corportation Board of Directors. Cruz is the president of Cruz Companies, which specializes in oil field services, heavy civil construction, remote camp construction, tug and barge operations and a variety of other construction support activities. AGDC is governed by a seven-member board of directors, which includes five public members and two commissioners. |
Petroleum News by Alan Bailey
(NGP Photo).
Commenting that Point Thomson, when it goes into production, will be the first field on Alaska’s North Slope to be operated by ExxonMobil, Cory Quarles, ExxonMobil Alaska production manager, told a Sept. 10 meeting of the Alaska Support Industry Alliance that this is an exciting time in the state for his company. The Point Thomson development is at an advanced stage.
ExxonMobil is also a partner in the Alaska LNG project, or AKLNG, a project to export natural gas from…. More…
ADN Gasline Op-Ed by Paul Jenkins.
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-mailcommentary(at)alaskadispatch.com
Aileen Cole, Deputy Press Secretary – (907) 269-7458
Governor Walker & Team Conclude Week of Successful LNG Meetings in Japan
September 18, 2015 KYOTO—Governor Bill Walker wrapped up his final day of meetings to discuss Alaska’s liquefied natural gas potential to prospective customers in Japan. He met with top executives of the LNG trading department of Osaka Gas, and toured the company’s Senboku LNG terminal, which is among the largest in the country.
“It was so exciting to see how Osaka’s LNG terminal works,” Governor Walker said. “We have been shipping LNG to Japan since 1969. I look forward to sending more shipments of Alaska LNG to Japan’s shores.”
Governor Walker and his team met with the executive managing director and general manager of Kansai Electric Power Company (KEPCO), which currently buys Cook Inlet LNG from Alaska’s Nikiski terminal.
Governor Walker and his team also met with Hyogo Prefecture Governor Toshizo Ido, who thanked him for the memorandum of understanding signed with Kyoto, a neighboring prefecture.
“The populous Hyogo prefecture, which includes the city of Kobe, will benefit from the MOU you signed with our neighbors in Kyoto,” Governor Ido told Governor Walker. “We all look forward to seeing your LNG project completed, as the residents of Hyogo and Japan will be able to receive LNG more quickly from Alaska than we currently do from Middle Eastern countries like Qatar.”
Governor Walker noted that LNG shipments would take seven days to reach Japan from Alaska.
“This was a very productive, very successful week in Tokyo, Osaka and Kyoto,” Governor Walker said. “Korea and Japan are the two largest consumers of LNG in the world. Alaska has more than enough natural gas to supply the market and, in turn, satisfy in-state demand so Alaskans can pay less for energy. I look forward to deepening the relationships we established this week as Alaska works with our East Asian neighbors on a mutually beneficial trade relationship.”
Governor Walker spoke at the 4th LNG Producer-Consumer Conference. Governor Walker, Department of Natural Resources Deputy Commissioner Marty Rutherford and Alaska Gas Team General Manager Audie Setters also spoke at the Alaska Oil & Gas Opportunity Seminar—organized by Resources Energy, Inc.., and sponsored by Sasakawa Peace Foundation, Institute of Energy Economics, Energy Resources, Inc., and Japan Institute for Overseas Investment.
Governor Walker and his team also met this past week with presidents, chief executives and representatives of:
· Itochu Corporation
· Japan Oil, Gas and Metals National Corporation
· Tokyo Electric Power Company
· Tokyo Gas
· U.S. Department of Energy
· U.S. Ambassador Caroline Kennedy
· Marubeni Corporation
· Kyoto Prefecture Governor Keiji Yamada
· Kyoto Prefecture Vice-Governor Akimasa Yamashita
· Former Prime Minister Yasuo Fukuda
· Korea Gas Corporation
· Mitsubishi Corporation’s Natural Gas division
· GS Energy
· Toho Gas
· Japan’s Ministry of Economy, Trade and Industry
· Japan Bank for International Cooperation
· Sumitomo Metal Mining
· ExxonMobil
· ConocoPhillips Japan
· JERA Co., Inc.
· Resources Energy, Inc.
· Mitsui & Company
· Osaka Gas
· Kansai Electric Power Company
· Hyogo Prefecture Governor Toshizo Ido
| We are amazed — and somewhat embarrassed on her behalf — that a respected state official would suggest that Alaska has not been on Japan's LNG map. After all, Japan knows its long relationship with Alaska LNG even if Alaska state officials don't. |
“Our visit this week put Alaska on the LNG map, and the market knows that we are serious about liquefying our rich natural gas reserves,” said DNR Deputy Commissioner Rutherford. “I look forward to returning to East Asia to sign LNG contracts.”
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