Walker peddles pipeline project to President Trump

Chief Oil & Gas Advisor John Hendrix, Alaska Gasline Development Corporation President Keith Meyer, Alaska Gov. Bill Walker and Department of Natural Resources Commissioner Andy Mack gave a press conference on Friday Sept. 30, 2016 to discuss their meetings with potential Asian markets for Alaska's LNG in Anchorage, Alaska. (Photo by Rashah McChesney)

Chief Oil & Gas Advisor John Hendrix, Alaska Gasline Development Corporation President Keith Meyer, Alaska Gov. Bill Walker and Department of Natural Resources Commissioner Andy Mack at a news conference on Sept. 30, 2016, discussing their meetings with potential Asian markets for Alaska’s LNG in Anchorage. (Photo by Rashah McChesney/Alaska’s Energy Desk)

Throughout his presidential campaign, Donald Trump pledged to increase the nation’s infrastructure spending.

After Trump was elected, Alaska Gov. Bill Walker sent the new president an infrastructure wishlist from the state.

At the top of that list is the state-led $45 billion gasline project.

Gov. Bill Walker sent a letter congratulating Donald Trump for his election win and reminding the president-elect about his campaign promise to increase infrastructure spending.  

“I assume other governors are doing the same thing as far as getting our foot in the door, so to speak,” he said.

donald trump Feb 10 2011

Donald Trump speaking at CPAC 2011 in Washington, D.C. (Creative Commons photo by Gage Skidmore)

Walker sent a similar letter to Trump’s Interior Secretary-pick Ryan Zinke. And another to the National Governor’s Association, after it asked for a list of shovel-ready projects to hand over to the president’s transition team.  

It just makes good economic sense to get the project in front of the new administration, Walker said.

“Well, it’s the largest one. If the president is looking for large projects to sort of jump start the economy and those kinds of things, we started with the largest one. And the one that helps the U.S. on the balance of payments, creates the most jobs,” he said.

Even with presidential support, the project faces significant hurdles.

Not the least of which is the Legislature, which holds the state’s purse strings. They’ve been tightening them each year.

Anchorage Sen. Cathy Giessel, R-Anchorage, said she probably would have asked the new president for a different kind of infrastructure project. 

“I’m kind of big on roads myself, and there’s several that would  allow us to access mineral resources as well,” Giessel said. “Of course we know that (Walker) believes the LNG project will cover the shortfall in our budget and provide a huge amount of revenue for the state going forward. I think that’s kind of an overstatement.”

Giessel, who chairs the Senate Resources committee, acts as a de facto liaison between the body and the state’s gasline development corporation — attending all of its board meetings, bringing its representatives before lawmakers.

She was one of two legislators who launched an audit of the corporation, calling for an investigation of what it’s done with the $600 million given to it by the state over the past several years.

But, despite questions she has about the state’s ability to lead the massive project, Giessel said she understands why Walker would choose to bring the gasline to the president’s attention. 

Sen. Cathy Giessel, R-Anchorage, and Sen. Mike Dunleavy, R-Wasill, listen to Alaska Gasline Development Corporation President Keith Meyer, aduring a Senate Finance meeting focusing oncorporation's budget on Tuesday, February 14, 2017, in Juneau, Alaska. (Photo by Rashah McChesney/Alaska's Energy Desk)

Sen. Cathy Giessel, R-Anchorage and Sen. Mike Dunleavy, R-Wasilla listen to Alaska Gasline Development Corporation President Keith Meyer during a Senate Finance meeting focusing on the corporation’s budget on February 14, 2017, in Juneau. (Photo by Rashah McChesney/Alaska’s Energy Desk)

“The federal government has been very supportive of our gasline project all along. FERC has been very interested in it and even President Obama has been incredibly supportive,”  she said. “I’m not sure what else a president could do. They can’t really override these regulatory processes.”

Walker agrees.

He said he’s not really asking the new administration to do anything specific when it comes to the state’s gasline ambitions.  It’s up to the market to decide if the project will go forward, he said.

Vivek Chandra, a petroleum economist and founder of Texas LNG, said the market just isn’t there for projects as big as Alaska’s.

Chandra, a geophysicist, worked for Arco in Alaska in the mid-1990s on an LNG project. Today, his company in Texas is targeting the same markets in Asia that Alaska is going after — though on a much smaller scale.

“I spend an awful lot of my time taking to the market and understanding what the market wants,” he said. “That’s one of the reasons I’m incredibly skeptical of what’s going on in Alaska.”

He said, regulatory hurdles aside, Alaska’s biggest problem is that its project is just too big.

“The state and everybody else should realize that, in a commodity world, the buyers no longer want to sign very large scale, long-term contracts, because they think there are going to be lots of suppliers, and the lowest prices wins,” he said.

Markets aside, the state has other hurdles to jump over.

For one, it  hasn’t yet taken over a Department of Energy license that would allow it to export natural gas to Asia.

Plus, it hasn’t gotten control of the land it needs to build the most expensive part of the project — the natural gas liquefaction plant on the Kenai Peninsula.

Despite the hurdles, Kenai Peninsula Borough Mayor Mike Navarre said he agrees with Walker that the gasline would be critically important for the state if it were built.

Navarre said he still hears from borough residents about the project, but the excitement has faded.

“You know, I think the general sense is that people support the project, but recognize that the momentum has slowed considerably,” Navarre said.

Still, Navarre said he supports Walker’s effort to bring national attention to the state’s dreams of a gasline. He said it would be “irresponsible for the governor not to pursue every opportunity out there.”

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