While we appreciate Gov. Bill Walker’s effort in moving the Alaska LNG Project forward, we are left this week wondering if there might be a better approach.
On Wednesday, Walker laid out expectations for the project timeline and said he wants the state and producers to reach agreements on key issues before the end of the legislative session — a reasonable approach as the “predictable and durable” tax and royalty terms sought by producers will require passage of a constitutional amendment because it infringes on the authority of future legislatures. If an amendment is not ready by this fall’s election, lawmakers would need to wait until 2018 — pushing the project back two more years.
But in a statement to The Associated Press, Walker said, “If agreements are not reached by the end of the regular session, we will need to consider all of our options going forward.”
The only problem with his assertion, though, is readily apparent in the next line of the statement: “However, at this time we do not know what all of those options would be.”
Quite frankly, Alaska is far too invested in Alaska LNG to be considering other options — even if there were any — and Walker’s comments show exactly why the producers want fiscal certainty on the project. Alaska is a partner in the project, but it’s also a regulator, and any organization should be wary of entering into an agreement with a partner that has that kind of leverage.
According to The Associated Press, Dave Van Tuyl, regional manager for BP in Alaska, told the House Resources Committee he would love for the agreements to be done, but he said they are complex and will take time to work out. The underlying agreements will bind the parties together for decades, making it essential that the agreements are done fairly and well, he said.
The central Kenai Peninsula has a lot riding on a natural gas pipeline, as does the rest of Alaska. We hope all parties involved continue to move the project forward. But we think careful negotiations, not bluster and empty threats, are the best way to reach those goals.