There’s buzz in Washington that a recent report commissioned by the Department of Energy could speed up approval of export terminals for liquefied natural gas in the Lower 48. Some energy experts say the effect will be minimal on Alaska. But that doesn’t mean there isn’t a market for Alaska’s gas.
The report says that overall, exporting LNG will result in a net-benefit for the economy. The country has a glut of natural gas, a supply that Deloitte’s Tom Choi says Americans underestimate.
That supply could help meet the growing global demand.
“There could be enough of a market for Lower 48 and Alaskan LNG,” Choi said.
Some advocates for exporting LNG hope the Department of Energy will take the report’s findings into consideration when it weighs the pending fifteen permit applications.
Choi said the Department of Energy’s delays could hurt the chances of U.S. LNG making it to foreign markets because Australia is developing its own pipeline.
“Well I think part of it depends on what the DOE does. If DOE delays further, then it makes Australia more attractive,” Choi said.
And more attractive to Asian markets in Japan, Korea and India. The same markets Alaska producers might eventually sell to if producers on the North Slope opt to plunk down the tens of billions of dollars required to build a pipeline.
Charles Ebinger from the Brookings Institution says the state should skip the pipeline and build an export terminal in Prudhoe Bay.
“A very reasonable question would be: Has anybody seriously looked at an LNG project’s cost compared to a pipeline route down to tidewater,” Ebinger said. “I think it would be cheaper.”
Ebinger says a terminal off of the North Slope would take significantly less time to build than a pipeline, meaning the gas could get to market sooner.
Governor Sean Parnell has proposed spending some $300 million for a liquefaction plant on the North Slope.