Dunleavy replaces two AGDC members amid project review

  • Gov. Michael J. Dunleavy replaced two public members of the Alaska Gasline Development Corp. on Jan. 7 and announced his cabinet officers who will take the designated seats on the board. (Photo/Michael Dinneen/AP)

Gov. Michael J. Dunleavy has begun to put his stamp on the $43 billion Alaska LNG Project.

The governor’s office announced Jan. 7 that Hugh Short and Joey Merrick were removed from the Alaska Gasline Development Corp. Board of Directors in favor of Doug Smith, a longtime Alaska oil and construction industry player and former Anchorage assemblyman and mayoral candidate Dan Coffey.

AGDC is in charge of the ambitious state-led gas pipeline and LNG export plan.

Dunleavy additionally appointed Department of Labor and Workforce Development Commissioner Tamika Ledbetter and Environmental Conservation Commissioner Jason Brune to the AGDC board. Ledbetter and Brune fill the two cabinet-level appointments to the seven-member board required by statute. Those seats were previously held by former Transportation Commissioner Marc Luiken and Labor Commissioner Heidi Drygas.

The new appointments are subject to confirmation by the Legislature, which typically occurs near the end of the legislative session each spring. Public members of the AGDC board serve five-year terms.

The governor said in a formal statement that the AGDC leadership changes continue to advance the ultimate goal of broadly lowering energy costs in the state and monetizing North Slope gas resources while also allowing his administration to conduct a “diligent review of the project.”

“AGDC is tasked with a very complex mission — and I look forward to seeing how the state can assist in moving a (gasline) project forward. Each one of our appointees bring a wealth of knowledge and experience to the table, including in areas of resource development, labor and workforce, regulatory issues and oversight, and I look forward to working with them closely in the future,” Dunleavy said.

More specifically, Smith was previously the CEO of the comprehensive oilfield service provider ASRC Energy Services, a subsidiary of Arctic Slope Regional Corp. and has served on the boards of the Resource Development Council and Alaska Support Industry Alliance, according to the governor’s office.

Coffey is a longtime Anchorage attorney, small business owner in addition to posts on other state and local boards and commissions. Most recently Coffey served on AGDC’s Community Advisory Council. He ran an unsuccessful campaign for Anchorage mayor in 2015.

Short is a finance expert, former mayor of Bethel and leads the Arctic-focused investment firm Pt Capital. Merrick is a union leader with the construction trade Laborers’ Local 341 and has been involved with various Alaska resource development organizations. Former Gov. Bill Walker appointed both to the AGDC board of directors and had appointment terms through at least September 2020.

Chairman Dave Cruz — first appointed to the AGDC board in 2013 by former Gov. Sean Parnell — former Alyeska Pipeline Service Co. CEO David Wight and Warren Christian, president of the Alaska pipeline construction firm Doyon Associated remain on the AGDC board.

Dunleavy was sharply critical while in the state Senate and during his gubernatorial campaign of Walker’s push for AGDC to lead the Alaska LNG Project in 2016 after former equity partners BP, ConocoPhillips and ExxonMobil decided to back out or slow-walk the project amid globally depressed energy markets. He has said the private sector should have a much larger role in the $43 billion project.

Officials in the governor’s office said Coffey’s significant experience leading complex organizations would be beneficial for oversight of the quasi state agency’s operations, specifically noting concerns Dunleavy has regarding the board’s December approval of $296,000 in performance bonuses for AGDC President Keith Meyer while the state continues to face large budget deficits.

Cruz told the Anchorage Daily News Meyer had earned the bonus pay. AGDC spokesman Tim Fitzpatrick told the Associated Press that Meyer offered to take his bonuses as stock in a corporation subsidiary at a future date when the subsidiary would issue stock. But Fitzpatrick said the board opted to award the cash bonuses.

Industry insiders have noted that aside from the bonus, Meyer’s $550,000 base salary is commensurate with industry norms for those leading endeavors as large and complex as Alaska LNG.

Under Meyer’s leadership since mid-2016, AGDC has secured formal expressions of interest from 15 potential Alaska LNG customers in the Asia-Pacific region. Most notable among those is the joint development agreement, or JDA, signed in November 2017 with three nationalized Chinese companies to potentially provide an anchor customer and the bulk of the financing needed for the project.

However, AGDC and the Chinese JDA parties the Bank of China, China Investment Corp. and oil and gas giant Sinopec Corp. missed a soft Dec. 31 deadline to finalize the specific terms of the agreement, which Walker said in November would be likely given the change in administrations. The JDA negotiations are ongoing, according to AGDC officials.

A draft environmental impact statement is scheduled to be released by the Federal Energy Regulatory Commission in February.

Elwood Brehmer can be reached at [email protected].

01/08/2019 - 2:57pm