This year it was Kenai’s turn to host the annual Alaska Chamber of Commerce forum. Conference theme this year was “Illuminating the Path Forward” and drew a couple hundred business leaders and officials from all over Alaska that included Gov. Bill Walker, U.S. Senators Lisa Murkowski and Dan Sullivan among a full house of local elected representatives. A lot of interest was in what chief economist Marianne Kah of ConocoPhillips had to say as she addressed the global LNG market. With the price of oil variable at the $50 a barrel mark and Alaska production being challenged by increased production of tight oil (crude extracted from low-permeability rock layers such as shale) in the lower 48, she described a challenging picture for Alaska’s energy industry relative to the global market. In an interview with the Dispatch Speaker of the House Mike Chenault commented, “People just don’t realize how volatile that world market really is and how we are tied into that market. So Alaska has to look at ways to be competitive by making it easier to produce oil and gas reserves that we have and at a better rate that we currently do. I think it’s going to be imperative that the governor and the legislature get on the same page this year and work toward that so we can be competitive in the world market,” said Chenault.
Governor Walker’s new oil and gas advisor John Hendrix, recently returned from a trip to Asian markets and said, “The governor met government to government while he was there and it opened doors and let them know that Alaska LNG is open for business and that we are a state led project looking for opportunities to market our resources,” said the former head of Apache Oil in Alaska. “We have a lot of opportunities in Alaska and we have to get our physical plan in order and we have to find the right balance between what the state does and what industry does so we can continue to get investment in Alaska. We can’t stand to drive it away we are an oil and gas state and that makes us like an oil and gas company ourselves, but we have more social responsibilities than an oil and gas company. We need to work with them and fix the regulatory part and permitting and stability and tax assurance,” he said.
The president of the Alaska Gasline Development Corp. (AGDC) Keith Meyer had his first opportunity to introduce himself and the AGDC plan to transition the AK LNG project to state leadership. Meyer’s said that the transfer of the project assets were continuing in a cooperative manner and that he expected those activities to wrap up by the end of the year. Following his address at the State Chamber the AGDC board of directors held their regular meeting that was open to the public at the Cannery Lodge. The subject of transition to state leadership was discussed in detail along with the current over supply of LNG in the world. Meyer’s agreed that no one needs LNG right now, but people in the Pacific Rim know that there will be a need in the early 2020’s. He said that if we miss that window of opportunity by moving a project forward now it may be decades before another opportunity might present itself. “The state is not going it alone!” Meyer stated emphatically, “But we are actively looking for investors elsewhere rather than from the producers alone. Moving forward is something the state really owes its people and what it will really look like if we just stop and don’t do this project. If you look at the two paths, either do it or not, I believe having a project will be much more beneficial to the people of Alaska than not having a project,” he said. The final investment decision Meyer’s said would not come until late 2018 or 2019.