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.
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.
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: