Page 4 - NorthAmOil Week 26

NorthAmOil COMMENTARY NorthAmOil
Caribou state
The Alaska LNG plan is making regulatory progress, but the price tag is too high, writes Ed Reed
ALASKA
WHAT:
Construction of Alaska LNG would take its toll on Alaskan wildlife.
WHY:
The multi-billion dollar pipeline presents an obstacle to development and wildlife.
WHAT NEXT:
Alaska LNG is extremely unlikely to go ahead.
IF the much-troubled Alaska LNG project was hoping for a boost from the US’ Federal Energy Regulatory Commission (FERC), it was wait- ing in vain. The draft environmental impact statement (EIS), released by the federal agency on June 28, found that the plan would have an “adverse and signi cant” impact on the land- scape. e dra EIS period runs until October 3 for public comments.
e project, which is backed by the Alaska Gasline Development Corp. (AGDC), is intended to export gas from the state’s North Slope area. In order to do so, a pipeline would have to be built across the state to liquefaction facilities, with capacity of 20mn tonnes per year (tpy), and a marine terminal.
LNG projects are moving ahead across the world, but Alaska LNG appears out of step. With a price tag of perhaps $43bn, the project is one of the most expensive in the world under consideration.
BP and ExxonMobil have announced the provision of some support for the plan, but given they previously held equity stakes it is something of a reduction. ese two companies are eager to nd a way to sell the gas resources they hold on the North Slope, which currently are locked in.
Alaska is in the midst of a budget crisis. Gov- ernor Mike Dunleavy has cut $444mn in a bid to balance spending – and avoid increasing taxes or reducing the dividend paid to each Alaskan from its commodity production. e cuts have a par- ticular impact on the University of Alaska, which would see its state support reduced by 41%. It is clear that the state cannot support its LNG aspi- rations – but would be eager for an additional source of revenue.
Pipe problems
In particular, construction would involve a new gas treatment plant, a 1-mile (1.6-km) Prud- hoe Bay Unit gas transmission line, a 62.5-mile (100.6-km) Point omson Unit gas transmis- sion line, an 806.6-mile (1,298-km) mainline, with eight compressor stations and a heater station.
e transmission lines would be elevated – above head height – while the mainline would be buried. e mainline would broadly follow the Trans Alaska Pipeline System (TAPS) from the gas treatment plant to Livengood. It would then
head to Trapper Creek and then across Viapan Lake, crossing Cook Inlet near Beluga Landing and landing near Suneva Lake. It would termi- nate at the LNG plant, on the eastern shore of Cook Inlet, in the Nikiski area of the Kenai Pen- insula. roughput would be designed to aver- age 3.7bn cubic feet (104.8mn cubic metres) per day, with peak capacity of 3.9bn cf (110mn cm) per day.
e $8.6bn mainline took pride of place in FERC’s worries. e link, it said, would have “signi cant impacts” on permafrost, wetlands and forest as a result of granular ll placement. e line would also be likely to have a signi - cant impact on the caribou Central Arctic Herds. There would be difficulties during “sensitive periods” and permanent impact on their habi- tats, with the project located at the centre of the herds’ range. It also raised concerns about noise levels.
Concerns about the impact on caribou were raised during the project’s scoping work at Nuiqsut and Kaktovik, as these represent the community’s main food source.
During construction of the mainline, it is likely that trenches would interfere in the activ- ities of large mammals, FERC said, for example during the breeding season.
Broader picture
It was not all bad. Most impacts, FERC said, would not be signi cant or could be reduced to less than signi cant levels.
Alaska LNG would be good for the state and local economies, it continued, but potentially bad for housing, population and public services. In particular, it could “disproportionately a ect environmental justice communities”, the agency said, given the impact on subsistence practices and public health.
FERC also asked for formal consultation with the US Fish and Wildlife Service and the National Marine Fisheries Service, given the likely problems caused to six listed species – the spectacled eider, polar bear, bearded seal, Cook Inlet beluga whale, humpback whale and ringed seal.
Construction of the project is expected to take eight years, with most of the impact on wild- life likely to occur during this period. e plant has a nominal lifespan of 30 years.
Construction of the project is expected to take eight years, with most of the impact on wildlife likely to occur during this period.
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w w w . N E W S B A S E . c o m Week 26 04•July•2019