Momentum matters in Alaska’s gasline project: Commentary

This article first appeared in Alaska Beacon.

As a nearly 50-year advocate for the Trans Alaska Gasline, many are asking for my assessment of the current status of the project. There is no doubt we have seen momentum rise and fall over several decades but right now momentum is clearly on the rise with President Trump once again focusing on Alaska’s project.

In 2017, I and two other governors were invited to the Oval Office for Energy Week to meet with President Trump and present our respective state’s most significant energy project. Following the meeting, President Trump took me aside and asked specifically what he could do to help advance Alaska’s gasline/liquefied natural gas project. I explained the need for Asian market customers.

A few weeks later we were informed that the president of China, on his return flight from meetings with President Trump at Mar-a-Lago, would be stopping in Anchorage to meet with me. China’s first lady and the majority of his cabinet would be accompanying him. China has long been Alaska’s largest trading partner so we honored the Trump administration’s request and met with President Xi and his delegation. Reporting on that meetingthe ADN noted, “Alaska exported seafood, minerals, oil and other products valued at just under $1.2 billion to China in 2016.”  The article also confirmed that expansion of these exports was discussed as well as tourism, air cargo, and Alaska’s liquified natural gas export opportunities.

That momentum continued and as reported by the Juneau Empire by fall the Trump administration asked me, the only governor invited, to join his trade mission of 29 U.S. business leaders to China. After President Trump’s invitation for more meetings in D.C., I traveled with the president and his delegation on Air Force One from D.C. as far as Hawaii for meetings. I continued on to Beijing to meet up with my Alaska team before President Trump’s arrival in Beijing. This culminated in my signing a nonbinding customer gas off take agreement in Beijing witnessed by both President Trump and President Xi.

Directly following the Beijing signing ceremony, President Trump traveled on to Vietnam and along with Vietnam President Tran Dai Quang witnessed the Nov. 12, 2017, signing of the memorandum of understanding between Petro Vietnam Gas and then Alaska Gasline Development Corp. President Keith Meyer on behalf of AGDC. These very public signing ceremonies put the Alaska LNG project on the front page of nearly every LNG journal around the world.

After these signing ceremonies some of the world’s largest energy purchasers that had not already signed nonbinding letters of intent or memorandums of understanding to purchase LNG from Alaska soon signed up. These companies included among others: Tokyo Gas, Korea Gas Corporation, ENN Energy, Petro Vietnam Gas, Mitsubishi, Chuba Elec. Power (Japan) and Sinopec.

Our team later successfully negotiated three truly historic gas purchase sales agreements with North Slope producers British Petroleum, ExxonMobil, and ConocoPhillips.

Unfortunately, all of this momentum faded following the 2018 gubernatorial election. The market customers that were once interested in Alaska moved on to other projects in Canada and the Lower 48 and the gas purchase sales agreements with the North Slope producers expired. Nonetheless, it is a fitting example of what project momentum can do, especially with the backing of the president of the United States.

What is often missed in the Trans Alaska Gasline project discussion is the financial benefit of Alaska’s close proximity to the Asian markets. This has been explained by the AGDC from the time of its creation in 2014 to today. Yes, many Lower 48 projects don’t require a new 800-mile gasline. However, the financial advantage of five to six days of shipping time from Alaska to the Asian market as opposed to the monthlong transits of LNG shipping from the Gulf Coast, plus the cost and uncertainty of going through the Panama Canal, must be considered.

In 2023, while in Panama, I witnessed a long line of vessels, including LNG tankers, waiting to transit the canal. With low water, the transit was severely backed up and delayed. An auction was conducted for ships competing to move to the front of the line. One Japanese company paid $4 million above the normal transit fee to move up in the line. From Alaska it is a direct shot to Asia, a route that LNG ships used for over 40 years of on-time deliveries from Nikiski on the Kenai Peninsula.

The then president of Tokyo Gas, Japan’s largest buyer of LNG, Mr. Michiko Hirose, with whom I had met many times over the years, accepted my invitation to come to Juneau in 2018. His wife and senior advisors accompanied him and we held many meetings on Alaska’s LNG project over the course of a week. I asked Mr. Hirose about the importance of LNG price versus deliverability. He responded that price is very important but deliverability is crucial. If the best-priced LNG in the world does not show up on time, that is a huge problem for the utilities in Japan.

This project has been delayed for so long that given the looming shortage of gas in Cook Inlet, Alaskan consumers have now become the market. Financial analysis shows that the pipeline alone can be financed, without the high compression/LNG component, to deliver gas to Alaskans at prices competitive with the cost of importing gas. Ultimately however, it is the LNG export piece that significantly reduces the cost of energy to Alaskans.

I do commend and support Governor Dunleavy’s working closely with President Trump to regain momentum for this critical energy opportunity for Alaska and beyond. It is imperative that this momentum continues to build and timelines for the start of construction and completion and first gas are met. Having the president of the United States and his administration strongly advocating for Alaska’s project could finally be the direly needed game changer to push it over the finish line.

Bill Walker was the 11th person since statehood to serve as Alaska’s governor. He is a lifelong Alaskan and has practiced oil and gas and municipal law for over 40 years. He is originally from Valdez and currently lives in Anchorage.