Alaska is asleep at the switch on natural gas
October 12, 2011
This omission was clear at the North America Gas Summit in Washington, D.C. I was there as a representative of the Alaska Gasline Port Authority to present the all-Alaska LNG project.
On opening day, there were numerous power point slides of different industry presenters, including ExxonMobil, identifying by colored dots on the world map the natural gas resources around the globe.
There were no dots on Alaska. I objected to this error during my presentation.
One slide was described by a presenter as the "spaghetti slide" showing the myriad trade routes for various countries and Lower 48 states for transporting LNG by tankers from their proposed export terminals to premium Asian markets. That same slide delineated LNG from Alaska with a very short line as being virtually across the street from the Asian markets.
My frustration escalated during presentations from those hoping to export their dry gas, which has a lower heating quality than Alaska’s wet gas, from the Lower 48 to the Asian markets.
I participated in one round- table session that discussed new LNG projects. Most participants were representing Lower 48 LNG receiving terminals that due to the "bonanza" of shale gas are now seeking LNG export licenses. Their goal is to convert shale gas to LNG and ship it from the Gulf Coast states to the Asian markets.
Discussions ensued over the challenges of getting their "dry gas" into the Asian market that needs "wet gas." I interjected that Alaska’s North Slope gas is "wet gas". They said there would not be any totally new LNG projects in the U.S. that could compete with their proposed LNG projects, due in part to a lack of deep water port sites. I responded with the recent results of the port authority’s Wood Mackenzie report showing a new LNG project from Alaska had better economics than at least ten other LNG projects around the globe, including those proposed in the Lower 48 and British Columbia.
At this point the leader of that discussion, a global LNG supplier executive commented that the Alaska project had it all, wet gas, conventional supply, a deep water port at Valdez and an incredible location to the Asian markets. “The Alaska LNG project is a no brainer. "
I could not agree more.
Finally, after two days of presenters explaining that the Lower 48 now has more gas on an equivalent basis than Saudi Arabia has oil, I asked my final question. Would anyone on the panel of experts consider moving natural gas via pipeline from Alaska into Canada bound for the Lower 48, as currently being advanced under the Alaska Gasline Inducement Act (AGIA)?
Not a single expert supported this concept. They all considered an LNG project from Alaska to the Asian markets to be far more viable.
Losing our market opportunity to Australia or Qatar is one thing. But to lose it to projects in the Lower 48 with inferior economics is unacceptable. Alaska has been off the map and asleep at the wheel for far too long. It is time to exit AGIA and shift into high gear to secure Alaska’s position as a global energy leader.
About: Bill Walker owns an Anchorage law firm that specializes in oil and gas and municipal law and serves as general counsel for the Alaska Gasline Port Authority. He ran for governor in the 2010 Alaska Republican primary. www.allalaskagasline.com
Received October 12, 2011 - Published October 12, 2011
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