Page 5 - GLNG Week 26

GLNG CommEntaRy GLNG
interfere in the activities 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.
AGDC’s interim president, Joe Dubler, wel- come the dra EIS from fERC. “Alaska LNG holds the potential for signi cant environmen- tal, energy, economic and employment bene ts for Alaskans. Publication of the dra [EIS] repre- sents substantial progress toward obtaining the authorisation required to build and operate this project.”
There is an alternative plan under discus- sion, the Alaska Stand Alone Pipeline (ASAP), which AGDC said would not be needed if Alaska LNG went ahead. e corollary of that state- ment would suggest that its case is strengthened should the liquefaction plan fail.
troubled past, troubled future
AGDC began pre-filing work in September 2014. e company told fERC in January 2017 it was now in sole charge of the Alaska LNG project, as BP, ExxonMobil, TransCanada and ConocoPhillips had dropped out.
In addition to the cost and construction challenges, the Alaska LNG made its most pro- gress when the US and China were getting on. Most notably, in late 2017, when US President
Donald Trump visited Beijing, a number of agreements were reached on the project, including nancing and broad supply deals. In March 2018, though, the US announced a number of tari s on Chinese goods, and China has responded in kind, including the imposi- tion of duties on LNG.
AGDC and Chinese institutions rea rmed the deal in October 2018 but few place much faith in the agreements. e only likely solution would be if the trade war ends and China can agree to a dramatic demonstration of intent by committing to Alaska LNG. Given the trade war is more likely to highlight the importance of strategic diversi cation for China, this seems an outside chance.
ere have been plans before for LNG plants in the state. In the mid-1990s Yukon Paci c was seeking to build a 14mn tpy LNG plant at Ander- son Bay. fERC o cially killed this o in 2010.
e Yukon Paci c plan fell apart as the move for a major pipeline from Alaska into the main- land US was being proposed. Ultimately both plans were scuppered by the emergence of shale gas, which has rewritten expectations of demand in the Lower 48.
ere is of course an already existing LNG plant in Alaska. fERC approved the plan – backed by Phillips Petroleum and Marathon Oil – in April 1967.
Marathon Petroleum took over this plant and, in March, applied to fERC for permission to begin importing LNG via this facility. Kenai LNG is described as being in a “warm idle” state, with Marathon planning to install a boil-off gas compressor unit. feedstock from this plant would go to the company’s Kenai re nery, up to 7mn cf (200,000 cm) per day. An environmen- tal assessment on the plan was concluded in mid-June.
Retooling Kenai LNG demonstrates that while the north of Alaska is gas-rich, the south is short. Converting an export facility into an import facility will be relatively cheap and should face few di culties. Alaska LNG is the reverse of this: grandiose, expensive and incredibly ambitious.
e problem with grandiose projects is that the amount needed – of cash, desire and political capital – to make progress sets a high bar. Alaska LNG will fall short. ™
Week 26 04•July•2019 w w w . N E W S B A S E . c o m P5