Alaska’s best path towards boosting short and long-term economic growth is to set forth a coherent set of policies that center around the exploration and development of the state’s abundant natural gas resources, according to a new paper by the American Council for Capital Formation (ACCF).
“Alaska stands at an economic crossroads. With job and economic growth in decline and an aging workforce, the oil and gas sector provides the best opportunities to revive its stagnation,” ACCF Senior Vice President and Chief Economist Margo Thorning said.
“Global demand for LNG remains high but it is volatile, therefore suppliers must act decisively to reap the most benefits. Alaska has a considerable market advantage, but it must move forward in a clear and unified path.”
There is broad consensus that the path to Alaska’s economic progress runs through the state’s remote North Slope where there are vast reserves of natural gas along the shores of the Beaufort Sea. Tapping those reserves would create tens of thousands of jobs and expand Alaska’s revenue base by billions of dollars. AlaskaLNG, a legislatively endorsed plan to construct a major pipeline, would carry natural gas 800 miles from the North Slope to ports in Nikiski, where gas would be liquefied and shipped abroad. Private partners have proposed substantial investments of $45-65 billion to fund this project.
Thorning, the paper’s author, notes that the AlaskaLNG project has the expertise and capability to move forward successfully. The paper observes that creating uncertainty about the project will be a major obstacle to a successful LNG project of the scale Alaska needs to enhance its economic future.
“The time has come for Alaska’s leaders to decide on an LNG project that can meet demand profitably and maximize benefits for Alaska and its people. Based on the economic facts and known variables, the AlaskaLNG project is the best path forward for the state to maintain solid economic growth and state budget revenues.”