AGDC: Review will find benefits of AK LNG

State officials leading the Alaska LNG Project insist a new Department of Energy review of the massive natural gas export venture will find it would help lessen global greenhouse gas emissions if finally brought to fruition.

Acting Assistant Energy Secretary for Fossil Energy Jennifer Wilcox signed an order June 28 directing the National Energy Technology Laboratory to prepare a supplemental environmental impact statement, or EIS, for the $38 billion gas pipeline and liquefaction megaproject largely to study the full range of greenhouse gas emissions resulting from the project’s construction and operation.

Alaska Gasline Development Corp. President Frank Richards said in an interview following the Department of Energy order that he believes the federal government’s analysis will conclude that use of Alaska’s estimated 35 trillion cubic feet of available North Slope gas worldwide “will result in significant reductions in greenhouse gasses, predominantly carbon dioxide.”

AGDC previously commissioned an independent study of the project’s emissions that found roughly 80 million tons of carbon would be kept out of the atmosphere because of Alaska LNG, according to Richards.

AGDC leaders and other supporters of the project have long pitched it as a way to help displace coal burned with lower-emitting natural gas for power generation in China and other East Asian countries.

Under the Trump administration, the Department of Energy authorized LNG exports to non-free trade countries largely in August 2020 based on the EIS and subsequent order approving construction from the Federal Energy Regulatory Commission earlier that May.

DOE officials in April granted a rehearing request filed by the Sierra Club that ultimately spurred the additional review. The rehearing order states that the department intends to issue an order after the supplemental EIS is complete that will reaffirm, modify, or vacate the project’s export authorization to non-free trade countries.

Among the executive orders issued by President Joe Biden shortly after taking office was one reviewing all regulatory and administrative decisions made during the Trump administration that could result in additional carbon emissions.

FERC evaluated carbon emissions from the project, but not the fully life-cycle emissions from the gas production, transport and consumption.

“We understand the need for what DOE is doing but we think the overall outcome is going to show a net positive in greenhouse gas reductions from AK LNG,” Richards said.

According to FERC’s EIS, construction of the North Slope gas treatment plant and 20 million tons per year Nikiski LNG plant would each result in approximately 622,000 metric tons of greenhouse gas emissions, while constructing the 807-mile gas pipeline would cause another 1.1 million metric tons of carbon emissions.

The gas treatment plant needed to extract carbon dioxide from the Prudhoe Bay gas for injection back into the ground would also cause 4 million to 6 million metric tons of carbon dioxide emissions per year depending on the need to flare gas, which is generally prohibited in Alaska outside of emergency situations, according to the EIS. The project is expected to have an operating life of about 30 years.

FERC officials wrote in their May 2020 order approving the project that the responsibility to approve LNG exports is DOE’s and the National Environmental Policy Act does not require FERC to consider upstream or downstream impacts of actual gas exports in determining if the LNG facility meets the requirements of the Natural Gas Act.

Commissioner Richard Glick wrote in dissent of the order that it violates both NEPA and the NGA because the broader commission “steadfastly refuses to assess whether the impact of the project’s greenhouse gas emissions on climate change is significant, even though it quantifies the direct GHG emissions caused by the project’s construction and operation.

“That refusal to assess the significance of the project’s contribution to the harm caused by climate change is what allows the commission to perfunctorily conclude that the environmental impacts associated with the project are ‘acceptable’ and, as a result, conclude that the project satisfies the NGA’s public interest standard.”

In January, Gov. Mike Dunleavy unveiled a concept to fund pipeline construction between the Point Thomson gas field and Fairbanks — estimated at nearly $6 billion — largely with unidentified federal infrastructure grants as a means to jumpstart investment in the rest of the system and provide natural gas to Fairbanks.

The administration is hopeful Congress and the Biden administration, which Dunleavy clashes with regularly, will recognize what they see as the environmental benefits the project could provide via cleaner burning natural gas.

Richards said AGDC will provide Energy officials with any information they need and emphasized that FERC’s construction authorization will remain valid throughout the process. He added that while he feels it’s highly unlikely any issues will arise from the supplemental EIS, the project owners would have years to address those concerns before startup.

Richards has said AGDC officials are in confidential negotiations with a lead party to manage the gas pipeline portion of the project at least partially contingent upon the availability of federal funds for the first phase of construction.

AGDC leaders hope to secure commitments from developers, operators and investors in the LNG and gas treatment plants by this fall, with the project’s major financial agreements coming next year.

Elwood Brehmer can be reached at [email protected].

07/14/2021 - 9:51am