OPINION: Following a prudent process gets Alaska closer to a gas line than ever before

I’ve been in the oil field and construction business in Alaska since the early 1980s and I’ve worked on every Alaska gas line concept that’s been studied, from Denali to the Alaska Standalone Pipeline, to the current Alaska LNG Project.

I’ve also been on the Alaska Gasline Development Corp. board of directors since 2016, when I was appointed by former Gov. Bill Walker, and based on more than 30 years of experience, I can say without reservation that we are closer than we have ever been to monetizing our long-stranded natural gas on the North Slope.

When Gov. Mike Dunleavy took office in 2018, the Alaska LNG Project did not have its federal permits, its cost of supply was uneconomic, we had nothing to sell, and AGDC was running out of funds after taking over the project from the North Slope producers in 2017.

The state has an unfortunately long history of spending hundreds of millions on large projects and then having nothing to show for the money. This is the path we were on with the state in the lead of the largest infrastructure project in North America.

Having spent more than $250 million of state funds advancing the project and with the state running at a $1.6 billion deficit, it was projected in early 2019 that AGDC wouldn’t have enough money to finish the FERC permitting process.

We certainly didn’t have the money to pursue the full front-end engineering and design process, which was estimated to cost $1.2 billion or more.

At the urging of Gov. Dunleavy, BP and ExxonMobil stepped up with $10 million each, along with their technical expertise, to review costs and assist AGDC in completing the permitting process.

Under Gov. Dunleavy’s administration, AGDC received all of the federal permits for Alaska LNG, including the favorable FERC record of decision, and optimized the project design. We have export permits for both free trade and non-free trade countries, and have driven down the project cost to where it is now competitive with Gulf exports.

Not only that, AGDC commissioned a study that established Alaska LNG’s dramatic environmental benefits which reduce global carbon emissions that are the equivalent of replacing 19 coal-fired power plants, or taking nearly 17 million cars off the road.

In sum, we now have a project that private sector developers are keenly interested in and LNG customers who continue to see the benefits of LNG from Alaska. The crisis in Ukraine has expanded the world’s need for reliable LNG to meet allied needs. This week at the nation’s premier energy conference, CERA Week in Houston, attendees were buzzing with interest in natural gas. Market forces will drive this project and Alaska is primed to turn our opportunity into a reality, providing critical energy for decades.

Once we have economically viable, well-capitalized investors and developers who are willing to build the project, we can then credibly pursue customers with deals based on real numbers.

AGDC leadership has maintained an ongoing dialogue with U.S. allies on the Pacific Rim who are prospective Alaska LNG customers. AGDC shares regular project updates to keep nurturing the relationships that will be required for commercial success.

Buyers need certainty in cost of supply. Developers need certainty that producers are willing to sell gas into the project. These are the deliberate, prudent steps known as the “stage-gate” process that was favored by the North Slope producers who know far more about how to complete a mega project on the scale of Alaska LNG than we do. These pieces are coming into alignment right now.

This is the approach AGDC has taken since Gov. Dunleavy took office, and it is the one we as a board will continue to pursue.

Warren Christian of North Pole is the chair of the Alaska Gasline Development Corp. board of directors. He was appointed to the board in 2016.

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