Gubernatorial candidate Bill Walker stands in the Peninsula Clarion office on Friday, May 6, 2022, in Kenai, Alaska. (Ashlyn O’Hara/Peninsula Clarion)

Gubernatorial candidate Bill Walker stands in the Peninsula Clarion office on Friday, May 6, 2022, in Kenai, Alaska. (Ashlyn O’Hara/Peninsula Clarion)

Opinion: On Alaska’s gasline, you can’t schedule opportunity

Alaska has the largest source of stranded conventional gas (no drilling required) in North America

  • By Bill Walker
  • Friday, June 17, 2022 11:56pm
  • Opinion

By Bill Walker

My brother Bob often says, “You can’t schedule opportunity.” He is right, and that is why we must pursue opportunities we had four years ago and may still be available today. As the world scrambles to find a long-term stable supply of liquefied natural gas (LNG), the door of opportunity is wide open for Alaska.

In 2015, the major producers came to me while I was governor, and explained that they had decided to not continue with the gasline project due to low oil prices. They presented me with two options: (1) stop the permitting process and put the project on the shelf; or (2) the State could take it over and continue on its own. I chose the latter and thanks to many, that permitting process continued and was recently completed.

It is a fact that the two most critical ingredients to a financeable gasline/LNG project is a known quantity of gas and a market. Since producers had been reinjecting gas on the North Slope for decades, a known quantity of gas was not an issue. Therefore, we focused on the LNG market.

During Energy Week in 2017, President Trump invited me, along with three other governors, to the White House to present our respective state’s energy projects, and he took a particular interest in ours. Within weeks, I was notified that the President of China, on his way back from meetings with President Trump, would be stopping in Alaska to meet with me about Alaska’s LNG project.

Several months later, we were notified by the U.S. Secretary of Commerce, that the Alaska LNG project had been selected by both President Trump and President Xi, to have a signing agreement ceremony in Beijing. I participated in that ceremony, along with the CEO’s representing other U.S. projects also selected. The signing ceremony was witnessed by both President Trump and President Xi.

From Beijing, it was on to Vietnam where AGDC representatives executed another LNG agreement in the presence of President Trump. Some Alaskans may not realize it, but China has long been Alaska’s largest trade partner. AGDC President Frank Richards has recently affirmed that China would be a significant market for our LNG. Since Dunleavy has been governor, much of Alaska’s oil has been shipped to China.

I also met with South Korea President Moon, the current Prime Minister of Japan, the presidents of nearly every major LNG buyer in Asia including the President of Tokyo Gas who came to Juneau for several days with his wife and senior staff for a series of LNG meetings and events. Ultimately, the Alaska LNG project received 15 nonbinding Letters of Intent from the largest LNG buyers in Asia including South Korea, Japan, and others.

Unfortunately, under Gov. Mike Dunleavy, all 15 Letters of Intent were allowed to expire. Most, if not all, of those buyers have since found their long-term source of LNG supply elsewhere in competing U.S. Gulf Coast LNG projects.

So here we sit. Alaska has the largest source of stranded conventional gas (no drilling required) in North America, if not the world, a pipeline route to tidewater at Nikiski with 79 federal permits already granted, an LNG export license in place and a world scrambling for a reliable supply of LNG. A recent press release from the Railbelt utilities indicated that there is an anticipated shortage of natural gas in Southcentral Alaska.

What we do not have is leadership or vision for this project.

While this project will ultimately be built and owned by the private sector, the worst thing the State could do now is to replicate the disastrous TransCanada experience by transferring the control of the project to a third party to advance on its own timeline with priority given to their own competing projects. This project is far too critical to allow that to happen. Surely, we have learned an expensive lesson from the TransCanada debacle.

Gov. Dunleavy is now attempting a press run to re-engage with the very same markets that he ignored after coming into office, sending letters to the Asian markets to see about getting a meeting with them in a clear pre-election effort to appear to be advancing the project hoping to rekindle the fire of the strategy my team and I built and fully engaged. Relationships with the Asian markets must be earned, especially after Dunleavy sent them away once already.

We can expect another press conference and headline from Gov. Dunleavy about his weak gasline efforts, but Alaska doesn’t need more empty promises. We need progress.

While I cannot guarantee that the same markets that Dunleavy drove into competing projects will seriously re-engage under a Walker Drygas administration, it is much more likely they will re-engage with the governor that worked with them than with the governor that shunned them. One thing is clear: no market, no project.

It is time to bring Alaska’s stranded gas to Alaskans. Given our small population, it is made affordable only because it is on its way to the world markets. No more headlines, time for some headway.

Bill Walker, an Independent, served as the 11th governor of Alaska. He is running for governor this fall alongside Heidi Drygas.

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