JUNEAU — An Alaska natural gas pipeline project that would serve overseas markets seemingly wouldn’t qualify for a loan guarantee under federal law.
The Alaska Natural Gas Pipeline Act contains incentives aimed at speeding a project, including authorization for a federal loan guarantee. But Larry Persily, federal coordinator for Alaska natural gas transportation projects, notes that a qualified project under the law is one that would bring gas from Alaska’s North Slope to the continental United States.
Changes in the years since the 2004 law’s passage, including the rise of shale gas, have given rise to concerns that there will be little demand for Alaska gas in the Lower 48. Gov. Sean Parnell has asked the slope’s major players — Exxon Mobil Corp., BP and ConocoPhillips — to unite behind a project that would allow for liquefied natural gas exports to the Pacific Rim if the market has truly shifted from the Lower 48.
Persily said Wednesday that such a project could still qualify for the loan guarantee if, say, a tanker brought liquefied natural gas to the Lower 48. But he said that doesn’t appear to be what people are talking about.
Federal loan guarantees for the pipeline are currently estimated at about $21 billion.
TransCanada Corp., which has an exclusive license with the state to advance a project, has proposed two options. One, estimated in January 2010 to cost $32 billion to $41 billion, would run from the North Slope to Alberta, Canada, where gas could then be moved on existing systems to North American markets. The other, estimated to cost $20 billion to $26 billion, would run from the North Slope to Valdez, where gas would be liquefied at a facility that an unidentified entity would build and shipped elsewhere. The estimate does not include the cost of the liquefaction plant.
TransCanada, which is working with Exxon Mobil in its effort and has focused attention mainly on the Alberta option, hasn’t announced any agreements with producers since ending an open season, or process of courting companies, in July 2010. A TransCanada official said talks with the three energy companies about the liquefied natural gas option began late last year.
Robert Dillon, a spokesman for Sen. Lisa Murkowski, R-Alaska, said Murkowski’s office would look at changing the loan guarantee language to help the project, as appropriate. He said it’s not clear yet what any project might look like or whether there will be a need for loan guarantees or financing support.
If a liquefied natural gas project proceeds, he said Murkowski would hold federal agencies accountable and ensure the approval process for things like an export license moved along.
Comments (9)
Add commentWhy is this starting to smell...
...like the Big Three are going to make out like bandits with our resource, while Alaska will get screwed?
So what!
Loan guarantee? If the market is there then what's to guarantee? You think Alaska and the big three are going to go belly up? We should pony up and build it ourselves. We've got the money and we've got the people. And if the big three doesn't want to commit, we can drill it without them. An all Alaskan project, well to refinery, would really pour in the revenue. Imagine not being beholden to banks, big oil or Big Bro!
big deal larry...
the loan provision doesn't mean a thing, any funding would need appropriation. trans canada is failing quite majestically with this "vital" language intact and a $500 million dollar state of alaska subsidy.
hopefully this new approach actually would make money, and not need a fed subsidy or a federal coordinator's office.
Our states resources are
Our states resources are being given away by Sean Parnell.
Look at the mining industry, we get 3% of this industries "net" take, plus a small lease fee.
What do Alaskans get in return ? Our state gets the status of First Place in the nation for toxic chemical release. EPA just released the report
We have billions in savings
We have billions in savings and yet raw sewage and other toxic wastes are still dumped into Cook Inlet. Maybe this explains why our seals and walrus are showing up dead, filled with tumors and covered in open sores.
We need to use our resources $$ to clean up our state, this is maximum benefit for Alaskans.
No guarantee?
Its funny how the Fed Gov't under Obama has tossed out millions upon millions of dollars for his "green energy" debacles from which we'll never see one red cent returned. Here is a viable project with a means to alleviate some of the dependence on foreign oil. I'd rather see big oil make some money rather than giving it away to Obama's cronies. We could also, gasp, sell it to foreign markets and make a profit to help reduce the deficit but I doubt that will happen.
Murkowski’s office would look
Murkowski’s office would look at changing the loan guarantee language to help the project, as appropriate. I am sure she will change it to insure their is no Alaska gas line.
Banditrider
Thanks for your comment. Of course it may not be true what you say, but you certainly have a right to say it.
By the way, how do you know for certain and can share that information with others that whatever our President has advocated will never occur or benefit others and is a benefit only to his 'cronies'? Or is that just speculation and an opinion with nothing to back up your conclusion?
Real arguments are based on facts, data and explanation of those things, not just a non-argument from authority saying "you must believe it because I said so."?
Wally...
Banditrider Coleman is just being a partisan hack as usual. Don't expect a fresh or productive insight from him. He's just 100% political spin.