Rick Rydell, talk radio host, caribou hunter, and keen political observer, asked his audience of 100 what the most dangerous animal in Alaska is.
The audience shouted out: Grizzlies! Moose! Wolverines! Politicians!
All were close, but none so dangerous, Rydell said, as the wild, untamed “Yettobe.”
Rydell was the keynote speaker at an event coordinated by Rep. Lora Reinbold and sponsored by Americans for Prosperity Alaska at the Anchorage Museum on Tuesday evening, an evening that had several other speakers on several other topics — education, the budget, Medicaid, and crime.
Rydell’s keynote was more like a TED talk — brief, to the point, and dramatic.
He ran through a series of former Alaska boondoggles, from the Delta Barley Project to the Mat-Su ferry, from the Alaska export potato study to the Palmer meat packing plant — all based on “yet to be” determined needs and fund sources.
The Yettobe.
And then he came to the biggest, baddest Yettobe project of all: The AK-LNG project of the Alaska Gasline Development Corporation.
It is a project that was once projected to cost $12 billion, then $18 billion, then all the way to $65 billion, and back down to $45 billion. And for a pipeline that costs $45 billion, the State of Alaska would have to borrow money.
“How much are we going to produce and how much do we need to get out of each unit to pay back the loan?” he asked.
And that’s when his spreadsheet came out on the screen. He sped through the numbers, and got to the bottom line before his audience’s eyes started to glaze.
If Alaska produces 4 billion units a day, and it has a 20-year loan that is amortized across all the units, Alaska will need to recoup $3.20 cents out of every unit to pay back the loan.
And the Henry Hub price of LNG yesterday was $2.89 per unit, Rydell said.
While the Henry Hub price is not what LNG goes for in the Pacific, after liquification and deliquification, it offers a good benchmark price. Bottom line: Use whatever assumptions you wish, but Alaska’s particular hound doesn’t hunt, at least not for as long as a hound might live.
“We lose 31 cents just to pay back the pipeline, for every unit of natural gas we sell,” he said. And that doesn’t include all the other costs, tariffs, taxes, royalties.
“This is the biggest attack yet of the Yettobe,” Rydell summarized.
Rydell’s talk came a day after the Alaska Gasline Development Authority revealed it had contracted a poll to test messaging on Alaska voters in order to pursuade them that the gasline would be good for the economy.
