Tough global competition and low natural gas prices have Alaska\u2019s partners in a multibillion-dollar trans-Alaska pipeline preparing to give up \u2014 at least for now.<\/p>\n
On Thursday, representatives of BP, ConocoPhillips and ExxonMobil told a joint hearing of the Alaska House and Senate resources committees that they aren\u2019t ready to proceed with AKLNG, the $45 billion to $65 billion effort to build a natural gas pipeline from the North Slope to a port on Cook Inlet.<\/p>\n
\u201cI\u2019m never going to say it\u2019s dead, but \u2026 we have to look at where we are economically,\u201d said Darren Meznarich of ConocoPhillips. \u201cIt\u2019s not ready. It\u2019s not economic right now.\u201d<\/p>\n
Representatives of ExxonMobil and BP told lawmakers much the same thing: Competition from international natural gas projects and Lower 48 shale gas means Alaska\u2019s pipeline no longer makes economic sense unless the project changes.<\/p>\n
\u201cThe project that we have been pursuing … struggles to compete in the global marketplace, and we\u2019d need a project that\u2019ll compete,\u201d said David VanTuyl of BP.<\/p>\n
The state of Alaska isn\u2019t giving up on the pipeline just yet, however. Over the past year, representatives of the Alaska Gasline Development Corporation have promoted the notion that the state itself could take over total management of the pipeline effort.<\/p>\n
In a Wednesday joint hearing, the two Legislative committees heard testimony about ways to finance the pipeline that could make it competitive globally.<\/p>\n
The three oil and gas company representatives said Thursday that their organizations would be open to a state takeover, and their companies would be willing to sell gas to the pipeline.<\/p>\n
On Thursday, Nikos Tsafos, a consultant hired by the Legislature, said that if the state goes ahead with the project alone, it carries enormous risk.<\/p>\n
The state could press ahead and build a pipeline on its own, but Alaskans must understand that is a risk, and Alaskans could end up losing their entire investment in the project as a worst-case scenario.<\/p>\n
For the time being, the state and its three partners are wrapping up work on the project\u2019s first stage, which has cost between $500 million and $600 million. In early 2017, they are expected to vote on whether or not to proceed to the project\u2019s next stage, which is expected to cost about $2 billion.<\/p>\n
In a statement Thursday, Gov. Bill Walker said he continues to believe that \u201cmonetizing Alaska\u2019s vast amount of stranded gas \u2026 would be Alaska\u2019s most significant and most immediate financial get-well card, one that will bring generations of benefits to Alaskans.\u201d<\/p>\n
He added, however, that a pipeline must be economically viable and will not, \u201cunder any circumstance,\u201d be financed by the Alaska Permanent Fund.<\/p>\n
\u201cLet me be clear, a project that is not economically viable will not be built. If economically viable, it will be financed by long term purchase contracts secured before the first piece of pipe is laid, not by the Permanent Fund,\u201d Walker said in his statement.<\/p>\n
\u2022 Contact reporter James Brooks at 523-2258 or james.k.brooks@juneauempire.com.<\/p>\n","protected":false},"excerpt":{"rendered":"
Tough global competition and low natural gas prices have Alaska\u2019s partners in a multibillion-dollar trans-Alaska pipeline preparing to give up \u2014 at least for now. On Thursday, representatives of BP, ConocoPhillips and ExxonMobil told a joint hearing of the Alaska House and Senate resources committees that they aren\u2019t ready to proceed with AKLNG, the $45 […]<\/p>\n","protected":false},"author":426,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_stopmodifiedupdate":false,"_modified_date":"","wds_primary_category":4,"footnotes":""},"categories":[4],"tags":[230],"yst_prominent_words":[],"class_list":["post-6911","post","type-post","status-publish","format-standard","hentry","category-news","tag-state-news"],"_links":{"self":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/6911","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/users\/426"}],"replies":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/comments?post=6911"}],"version-history":[{"count":0,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/6911\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media?parent=6911"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/categories?post=6911"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/tags?post=6911"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/yst_prominent_words?post=6911"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}