Voices of the Peninsula: LNG project should set realistic expectations

  • By Mike Navarre
  • Saturday, May 13, 2017 9:40pm
  • Opinion

The Kenai Peninsula Borough enthusiastically supports development of an Alaska North Slope natural gas project, in particular the current proposal that would locate the gas liquefaction plant and marine terminal in Nikiski. The long-term economic gain for residents of the borough, and the entire state, would be substantial.

Anything the state can do that is financially affordable and responsible to help move along the project is much appreciated.

However, as borough mayor, I am concerned that the Alaska Gasline Development Corp.’s well-intentioned but I believe unrealistic dates for making it through the federal environmental impact statement process and then starting construction of the LNG project, and for relocating a segment of the Kenai Spur Highway, could mislead property owners, contractors, jobseekers and others — or, at the very least, build up another round of false calendar hopes.

Alaskans have been looking forward to a North Slope gas line project for several decades, and Kenai Peninsula residents have been planning for the project’s impacts ever since the Alaska LNG project team selected Nikiski as the preferred site almost four years ago.

The 900-acre LNG plant and marine terminal would displace residents and businesses, and would displace setnetters from their beachfront leases. Heavy traffic during construction along the Seward, Sterling and Kenai Spur highways would affect a lot of residents, a lot of visitors and a lot of businesses that depend on those roads for their livelihood. The impacts on the Kenai Peninsula would be substantial.

Community impact aid in lieu of property taxes is essential, but unknown — not just for the Kenai Borough, but for every community along the project route.

The Federal Energy Regulatory Commission’s environmental impact statement for the project will cover these issues and more, just about everything imaginable from Prudhoe Bay then 804 pipeline miles south to Nikiski. There will be ample opportunities during that process for the Kenai Borough government and residents to comment and question, working with the project developer and regulatory agencies to write a success story that would last decades.

But I believe we’re a long way from a multimillion-dollar project to move a state highway out of the path of the LNG plant, and a long way from construction of the LNG project itself. Not “long” as in years and years, but probably several years considering all the work and money and LNG customers and project investors that would be needed to get to those points in the schedule.

Certainly, more than the 24 months the Alaska Gasline Development Corp. is telling Kenai Peninsula residents.

The corporation’s April 17 application to federal regulators calls for the Kenai Spur Highway relocation work to start in the first quarter of 2019. That’s less than 24 months away.

“The relocation,” AGDC said in its project description to FERC, “could only be accomplished by the State of Alaska.” Yet the project team and state Department of Transportation have not selected a preferred route, or even selected a limited number of preferred options. As such, land acquisition and design and permitting work has not started. Nor is there funding.

Telling residents the road construction could start in the first quarter of 2019 is causing a lot of uncertainty and anxiety among hundreds of property owners who are wondering if their homes are in the path.

There is the same scheduling anxiety over the LNG plant itself. The project application to FERC said site preparation and work camp construction in Nikiski could start in the fourth quarter of 2019.

That assumes, according to the corporation, that FERC will issue a final impact statement and authorization for construction in just 18 months. That assumes, according to the corporation’s press release, that federal regulators will “soon” issue a schedule for the environmental review and start work on what would be the largest EIS in FERC history.

However, as recently as March 30, FERC staff cautioned the gasline corporation to maybe hold off on the project application “due to the number of questions lingering.” A lot of unanswered questions remain for pipeline routing, construction methods, wetlands fill, river and stream crossings, dredging disposal, community impacts — a long list of environmental issues.

FERC will not issue a schedule for the final impact statement until it has all the information it needs. The more complex a project, the more information needed to accurately predict a complex EIS schedule. Of more than half a dozen proposed LNG projects in the Lower 48 submitted to FERC since 2011, not one received its EIS schedule “soon” after application — the average was about one year.

And most of those projects were a lot easier — adding liquefaction trains to an existing LNG import terminal. And none included an 800-mile pipeline or large gas treatment plant in the Arctic.

I don’t say this to discourage Alaskans or to speak against the project, which would be a great investment for Alaska. I am worried, however, that Kenai Borough residents — and Nikiski residents, in particular — could make decisions today based on what they think might happen tomorrow, when in fact I doubt the highway relocation or work camp construction will start in 2019. There is just too much planning and review — and money — needed before that happens.

Let’s everyone slow down the expectations, continue to share information, cooperate toward a successful project for all Alaskans, and not publicize a calendar that is sure to disappoint.

Mike Navarre is mayor of the Kenai Peninsula Borough.

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