Gasline agency has enough cash to continue a few years - Must Read Alaska
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Tuesday, February 25, 2020
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Gasline agency has enough cash to continue a few years

The Alaska Gasline Development Corporation has $20 million left in its funded account, enough to continue at its current level of activity for several years.

Last year, the agency laid off several members of the staff to conserve funds and curtail the rampant spending that occurred under the reign of Gov. Bill Walker, who had taken over the project when he became governor in 2014, and had developed it in such a way that the private sector stepped out of it.

The agency, now operating with a more modest ambition, is asking the Legislature for “receipt authority” for $20 million more in Fiscal Year 2021, so that it can continue to solicit investors. Receipt authority is not an appropriation but the permission to bring in investment money.

The agency anticipates it will have $15 million in the bank at the end of the year.

AGDC is trying to find a way to to develop a gasline from the North Slope to tidewater at Nikiski, on the Kenai Peninsula. It’s a challenge because the world is awash in natural gas, which is now selling at a record low amount, at times trading at below $2.

[Read: Has natural gas hit rock bottom?]

Natural gas prices are so bleak for industry that Chevron took a $11 billion write down in the fourth quarter of 2019, a reflection of devalued natural gas assets.

Agency leaders gave the House Resources Committee an overview of the project during the committee’s first hearing of the year.

The original appropriation for the agency was through appropriation to a fund, and AGDC can spend money out of the fund to progress the project. The agency does have to come to the Legislature for its operating budget, but capital expenditures come out of the fund, without additional appropriations.

The history of the project was outlined by AGDC President Joe Dubler today, without mentioning the hundreds of millions of dollars that had been drained off during the Walker Administration. Those details are explained in a story by Craig Medred, published this week.

The sanitized history outlined today, however, gave just the legislative turning points and a few other pivotal details. It did not talk about the $800,000 in annual compensation that the former head of the agency, Keith Meyer, was earning, nor the $120,000 a month contract that Walker awarded to Rigdon Boykin, his old colleague from the failed Alaska Gasline Development Authority.

Under Walker and Meyer, the Administration promised Alaskans the gasline construction would begin in 2019.

[Must Read Alaska’s story from 2016 about the direction the gasline was going in midway through the Walker Administration.]

In 2013 HB 4 created the Alaska Gasline Development Corporation (AGDC) in A.S. 31.25, giving broad powers and funding to advance the Alaska Stand Alone Pipeline Project (“ASAP”)

In 2014 SB 138 gave AGDC authority to represent the State of Alaska in the LNG terminal of the Alaska Liquefied Natural Gas Project (“AKLNG”)

In 2016 DNR bought out Trans Canada and AGDC was granted the entire 25 percent State share in AKLNG

In 2016 the Pre-Front End Engineering and Design was completed and the producers, based upon the economics resulting from that work, stepped aside to allow AGDC to continue working the project.

In 2019 AGDC focused its efforts on the AKLNG Project.

The agency then shelved the Alaska Stand Alone Pipeline Project (“ASAP”) after receiving the Joint Record of Decision and the right of way on federal land. The agency re-initiated the “stage-gate process” for the Alaska Liquefied Natural Gas Project (“AKLNG”).

Stage-gating is an industry standard for managing any large project or innovation rollout.

AGDC focused its activities on getting authorization to construct from the Federal Energy Regulatory Commission (“FERC”).

AGDC committed to evaluating the competitiveness of the AKLNG project by reviewing costs and updating the economic analysis.

The agency committed to bringing back the private sector soliciting companies to build, own and operate AKLNG.

The complete presentation by AGDC President Joe Dubler and his staff is at this link:

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • OMG. Did you not see Kevin Meyer’s attempt to take over the project? Alaska has spent $237 Million on this project. It seems improbable except for the Tankers from the North Slope concept.
    Even if you need icebreakers to guarantee navigation it is the simplest solution. But Oil and LNG are widely available all over the world. We might as well continue developing oil and wait for the next LNG market.

    • $237 million spent on a farce of a pet project is a travesty to the people of Alaska.
      Governor Dunleavy should end this and really “tighten the budget” like he claims.
      That $20 million remaining could be better spent on public safety and problems like homelessness in the years ahead.

      • When Steve Stine and I agree on an issue, it is a rare day. Time to end this charade and spend our limited resources in a better manner.

  • Much like everything proposed since I got here in 1987 and more than likely before these grandiose projects are gigantic ponzi schemes. These seem to be designed to separate us, not the state, of funds and enrich engineers, designers and bureaucrats. Nothing proposed has been built just money whizzed away.

    • Grandiose projects. The Trans Alaska Pipeline pays for everything we enjoy up here that doesn’t occur naturally. I have no problem with big ideas. Big ideas are great and we should have more of them. The idea should be thoroughly vetted and moved forward or discarded. That’s what the oil companies did with the gas pipeline, but Walker wouldn’t take no for an answer. At some point in time, a gas pipeline will probably pencil out, but not now.

  • Late 60’s the “Alaska-Japan Trade Club” (AJTC) was informally created by wealthy Alaskan interests; to encourage trade with Japan. For several reasons it didn’t pan out. So the organizers decided to at least salvage something out of all the effort put into it.
    This was the beginning of all the Alaskan “Bridges To Nowhere” type scams. Members would buy up “worthless” land. Legislature would announce a “project” to be built on or within the corridor of that land. Members would then sell the land to “Johnny Come Lately” marks, for obscene profits.
    Legislature would then announce that the project was being “tabled” for a while, burning the marks.
    Ever see the movie with Robert Redford, “The Sting”? That’s the MO of the AJTC.
    How do I know this? In years past I dated some of their daughters……………Ahahahahahaha!

  • Time to get rid of the ALNG offices and people. No good has come from it. And, move the workings of the AKLNG into the Department of Natural Resources where it was in the beginning. It’s a state project, not a private one. The waste of money for their imagination is horrendous. Every Governor since Murkowski should be held accountable for the fraud , waste and abuse of moneys on this dead project. Dunleavy is in a hot seat trying to stay afloat, “Sleaze Bag” Walker is panting on the sidelines, hoping no one catches the problems he created then and now. So, get rid of the junk office and project. If there is to be a line, start fresh, under the guidance of the Department of natural Resources, in a state budget that can deal with the problems. Leadership in the AKLNG is exceedingly poor…and changing leaders at this point won’t help. The FERC will come out with the same summary as the last time.

  • Over 500 million to trans Canada and for what?

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