With Alaska’s finances in ruins, the state government is actively seeking ways to revive oil and gas development. The Governor and state legislature, along with its delegation to the U.S. Congress, have loudly called for opening up parts of the state under federal control, as well as the offshore Arctic.
Governor Bill Walker is also very enthusiastic about TransCanada’s plan to build a tar sands pipeline from Alberta to the Alaskan coast.
But now the Walker administration, growing impatient, wants to take a more aggressive approach. Governor Walker has called for the consideration of an expanded natural gas pipeline that could link up to a liquefied natural gas (LNG) export terminal. The Alaska Stand Alone Pipeline (ASAP) was originally designed to serve in-state residents with natural gas supplies. But the governor wants to look into the construction of a larger pipeline instead in order to export the gas. Crucially, he wants the state to take ownership of the project, a move that he says could boost state revenues.
The project is seen as a fallback option should a proposed public-private partnership with oil majors not move forward. The Alaska LNG project is a massive LNG export proposal, with the backing of ExxonMobil, BP Alaska, ConocoPhillips Alaska, and TransCanada. The project would consist of an 800-mile pipeline to connect gas fields in the North Slope to a liquefaction plant on Alaska’s southern coast. The state of Alaska has already agreed to take a 25 percent stake in the project.
But with a price tag of $45 to $65 billion, the oil majors are certainly going to think twice about leveraging such a steep sum. All of them have recently committed to major cutbacks in capital expenditures in order to ease the pain of falling oil prices. Plus, LNG markets have soured since the project’s original inception.
While the project may be a luxury that the oil majors cannot afford, Governor Walker is prepared to move forward without them.
“Given our financial situation, we can no longer afford to stand by and wait while Alaska’s future is decided in the boardrooms of international corporations that have competing global interests,” Walker wrote in an op-ed.
Via oilprice.com
