Keep the LNG project moving forward

  • Thursday, January 8, 2015 5:44pm
  • Opinion

While Gov. Bill Walker has acted within his authority during his first month in office, a number of those actions, including the removal of three Alaska Gasline Development Corporation board members and his order that remaining board members not sign confidentiality agreements, leave us with questions about the administration’s goals moving forward.

The state government is facing some hard decisions due to the drop in oil prices and the corresponding drop in state revenue. Alaska is facing a $3.5 billion budget deficit, and calls for smarter spending are appropriate. Indeed, smart spending should be the rule whether the state is facing a deficit or not.

However, we wonder if knee-jerk spending freezes and project delays are smart. While the state is facing a funding gap in the near term, it also needs faces a long-term energy gap. Several of the state’s mega-projects are intended to address Alaska’s long-term energy needs, including the Susitna-Watana Hydro project, the Alaska LNG Project and the Alaska Stand-Alone Pipeline. The latter two of those projects fall under the purview of the AGDC.

Early in the gubernatorial campaign, Gov. Walker called the LNG project fatally flawed, and the ASAP project uneconomic. It seems reasonable to assume that Gov. Walker will nominate new AGDC board members with philosophies similar to his own.

Our concern, and one expressed by members of the Legislature, is whether and how much a shuffling of leadership will affect the projects — specifically, whether project schedules will be pushed back. And we have concerns that preventing board members from being privy to confidential information will impede the decision-making process.

We know what happens when projects are delayed. They get much more expensive, or they don’t get done at all.

Al Bolea, a former oil company executive and one of the AGDC board members fired by Walker, told the Associated Press that it’s normal for a new governor to surround himself with people he believes will support his plans.

“I think once the governor gets his hands around this huge project and sees all the good work that was done that he’s going to make all the right decisions,” Bolea told the AP. “I would encourage everyone to view this as just normal, that this isn’t a sign of some massive change. It’s just a new person in a huge job, the executive of a huge state, getting things lined up the way he wants them.”

We hope that’s the case. While campaigning on the Kenai Peninsula, Gov. Walker said he would work to bring an LNG project to fruition, with a terminus in Nikiski, and we’d like to see that effort continue. Gov. Walker has said he doesn’t want to slow that project down, but with funding uncertainty and changes in leadership, the road map is going to look different. We hope the administration is looking beyond the current fiscal situation, and is keeping the final destination in view.

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