Feds to make AK LNG environmental decision by end of next year

Mar 19, 2018

 

The recently-announced date for completion of a federal environmental review is later than AGDC had hoped for.

The Federal Energy Regulatory Commission has announced when it will complete its environmental review of the AK LNG project. December 2019 is later than the Alaska Gasline Development Corporation had hoped, but for now, that hasn’t changed its operating schedule.

 

 


The new timeline for reviewing environmental documents comes after several rounds of back and forth between AGDC and the feds. But there are still a lot of questions federal regulators have, and those won’t be answered until at least June. Jesse Carlstrom is the communications manager for AGDC. He says having a firm date for completion of the environmental review is a good thing.

“This provides AGDC with the clarity we need to continue progressing our commercial prospects, discussions with our potential commercial partners as well as moving through the regulatory process to eventually reach a draft environmental impact statement and a final EIS.”

Earlier this year, AGDC announced some soft agreements with Chinese investors to help fund the approximately $45 billion pipeline and the new liquefaction plant in Nikiski. Carlstrom says they’re moving ahead as planned to secure other investments and, for now, there’s no change in AGDC’s funding from the state legislature.

“We’re still on track with the timeline for pursuing potential investors and we are working with the funding the legislature has appropriated to us which will get us through FY 19," Carlstrom said.

The 2019 fiscal year ends June 30th. But AGDC won’t know the status of FERC’s environmental draft report until almost six months later, so the obvious question is, how does that gap get covered?

“I don’t think the timeline for the environmental impact statement is that big a deal for investors," said Larry Persily. He ran the office of the federal coordinator for the pipeline project under the Obama administration.

“The more immediate question, the Alaska Gasline Development Corporation is nearing the end of its state money. They’re not asking for more state funds, the governor is not asking for more state funds, if they’re going to make it to the end of design and the end of permitting, they’re going to need someone, or someones, to put in several hundred million dollars to get them there and that’s what they’re looking for now.”

AGDC had hoped to have its environmental review work done by the end of this year. Persily doesn’t think the extra year will scare off outside investment, and anyone who’s seriously interested in investing is probably not putting much stock into the day-to-day international trade developments coming from Washington D.C.

“Anyone who is planning billions of dollars in investment based on their belief of what President Trump might do is a bad investor. So, the president’s proposed tariffs on steel from China will affect this project, as it will affect any other consumer in the US who uses foreign steel. The question is how much. No one knows the answers to that. Trump has talked about exemptions and waivers, those aren’t clear. But if there’s a tariff, it will affect the cost, the question is how much.”

Another question is how many more questions will AGDC need to answer for FERC. There are at least 75 questions still unaddressed by the state in the latest go-round with the two agencies. They’ll be getting together March 22nd in Washington D.C. to come to terms with how to answer those questions and move ahead with the environmental impact statement, which will have to be adopted before any construction can begin.

 

Another meeting, of the Alaska Liquefied Natural Gasline Project Advisory Committee, meets Tuesday, March 20th at 7 p.m. at the Nikiski Recreation Center.