Brennan: Gas line needs adult review
By Tom Brennan |
One good way to give the proposed North Slope gas pipeline project a much-needed vetting would be to elect Mike Dunleavy as Alaska’s governor.
Dunleavy’s approach to the gas pipeline plan has been cautious, an approach that has been sadly missing ever since Gov. Bill Walker jumped on its bandwagon.
Walker jumped on that wagon very early. Back in the days when industry was looking at building a 1,700-mile pipeline from the North Slope to the Lower 48, Walker was campaigning for the state of Alaska to build it. That 1,700-mile line, estimated to cost $26 billion, would have involved new pipeline from Alaska to Alberta where it would link up with existing lines to U.S. markets.
I saw Walker at work on his idea of having the state build that line and it was scary. I was at The Voice of The Times in those days (about 10 years ago) and Walker came to our office to make his pitch. I spent an hour and a half listening to him and came away thinking the guy didn’t have both his oars in the water. I talked to my colleagues, Bill Tobin and Paul Jenkins, and decided not to write anything about Walker’s thoughts on the matter.
Industry interest at that time was spurred by the Alaska Gasline Inducement Act, an incentive scheme passed with a push from Gov. Sarah Palin. But industry decided to take a pass and TransCanada Corp., a Canadian company, became the only corporate entity interested in building the line.
By then, fracking was becoming a widespread industry practice. It’s a method of pressuring and fracturing rock formations that hold large volumes of oil and gas, hydrocarbons that can be released and produced when the rock is fracked. It can literally free up trillions of cubic feet of gas. The Lower 48 had many such formations and the practicality of piping gas from the North Slope to U.S. markets soon went away.
Interest then shifted to building a line 800 miles or so from the Arctic fields to Cook Inlet where it could be processed for shipment to the energy-starved Orient. Bill Walker shifted with it, became an advocate for having the state play a major role in such a pipeline and then was elected governor.
As governor, Bill Walker has been an avid promoter of a gas line serving the Orient via Cook Inlet. Under his guidance and advocacy the state has spent millions on the idea and promoted it to potential customers. These days Walker is shy about having the state fund the line but lately the Chinese government has taken an interest and three government-owned companies have indicated they might finance 75 percent of the $44 billion project in exchange for 75 percent of the gas.
Some think oil and gas companies should invest in the line since they would be the primary beneficiaries of getting that gas to market. But apparently the producers aren’t big on spending their money that way. They would rather have other entities invest in the big pipes and they be responsible for funding their own infrastructure.
Things could happen fast on the project and the prospective Chinese investors are facing a year-end decision on at least part of the project. Now would be a very good time for a leader with good business sense, a guy like gubernatorial candidate Mike Dunleavy, to step in, assemble some experts and take a good, hard look at the pipeline plan and the state’s role in it.
To be perfectly honest, I feel very nervous about any project that large advanced by Governor Bill Walker. I may or may not be wrong about how many oars he has in the water. But I think we should take a cautious approach, late though it may be.
I seriously doubt that Democrat Mark Begich would be any improvement over Walker if he should defeat Republican Mike Dunleavy in the governor’s race. When Begich left the Anchorage mayor’s job to take a seat in the U.S. Senate race he gave a hugely expensive gift to some of his favorite supporters, the labor unions, a gift that cost Anchorage taxpayers a bundle.
The unions would benefit greatly from gas pipeline and terminal construction so I would be suspicious of any decisions Begich made along those lines. I don’t fault the unions because the jobs would benefit the entire state, but I would rather not have Mark Begich at the helm.
It’s time to get some adults into the room and have them take a good hard look at the pipeline project, see what’s in it for the people of Alaska and make some thoughtful decisions.