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Alaska’s State-Sponsored LNG Project Is Struggling To Find Investors | OilPrice.com

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Alaska’s State-Sponsored LNG Project Is Struggling To Find Investors | OilPrice.com


Last year, the Biden administration issued the green light for ConocoPhillips’ (NYSE:COP) $8 billion Willow project in Alaska, ending the company’s long wait much to the consternation and chagrin of environmentalists. ConocoPhillips is the largest crude producer in Alaska and also the largest owner of exploration leases, with extensive holdings in Prudhoe and the National Petroleum Reserve-Alaska (NPR-A).

Whereas the Willow project has frequently garnered the lion’s share of attention and media coverage, another, even bigger, Alaskan energy project has been flying under the radar: the $43B state-led Alaska LNG project. Skeptics have been quick to point out that 2023 was yet another dry year for the ambitious project with no major deals or investments announced by the Alaska Gasline Development Corp., or AGDC. Things came to a head on Monday after Alaska Republican Gov. Mike Dunleavy’s administration presented the Senate Finance Committee with a $4.5 million budget request for the project, only to be met with pushback and sharp questions by three members of the committee.

In my eight years of being a legislator, I don’t think they’ve inked one investment. And so is this a good use of those funds?Or do we need a change in leadership over there?” posed Wasilla Republican Sen. David Wilson. 

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For decades, elected leaders have dreamed about building a natural gas pipeline akin to ConocoPhillips’ 800-mile long trans-Alaska oil pipeline, that could export gas to markets outside of the state, provide cheaper heating fuel for Alaska residents and generate thousands of construction jobs.  US Oil, Gas Drillers Add 1 More Rig As Production Plummets

Geared toward exports to Asian markets, the idea of the project was first mooted by Republican former Gov. Sean Parnell more than a decade ago and his successors, including Dunleavy, have continued to advocate for it. When complete, the project will source its gas from the enormous Prudhoe Bay and Point Thomson oil fields owned by ConocoPhillips, ExxonMobil Corp. (NYSE:XOM) and Hilcorp

A 800-mile gas pipeline would then run south to the Kenai Peninsula, where a LNG plant would liquefy the gas before loading onto tankers bound for Asia. North Slope fields are expected to deliver ~3.5 billion cubic feet of gas per day, enough to meet a quarter of Japan’s gas consumption.

Unfortunately, that dream has never been realized with the project struggling to assemble the necessary combination of oil companies willing to sell their gas at a competitive price, investors and customers despite the state spending hundreds of dollars in public funds on the project. The project is eligible for tens of billions of dollars in federal loan guarantees. It’s not for lack of trying, though. Alaska’s statewide elected officials have intensified their efforts to push the project ever since Russia invaded Ukraine two years ago. In 2022, Republican U.S. Sen. Dan Sullivan pushed Alaska LNG to potential investors and buyers in Asia, with help from Rahm Emanuel, U.S. ambassador to Japan. 

Currently, the project is trying to find investors or partners to provide the $150 million that AGDC needs to finish the engineering and design work required before a final investment decision (FID) can be made. AGDC is offering ownership of more than half of Alaska LNG to fund the entire project, with construction costs to be largely funded by investors or gas buyers.

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Unfortunately, so far, nobody has been willing to bite. Back in July, the Wall Street Journal reported that potential customers in Japan and South Korea were looking at more competitive LNG projects elsewhere.

Nonetheless, multiple sources familiar with the nitty gritty of the project have revealed that two companies are seriously looking into it. The first is Venture Global LNG, a successful startup company with an operating LNG export plant in Louisiana. The company is, however, currently facing serious legal jeopardy with Shell Plc. (NYSE:SHEL) and BP Plc (NYSE:BP) among three companies seeking billions from the company through arbitration for what they claim is failure to fulfill previously negotiated long-term contracts with the European energy giants. On its part, Venture Global has defended itself by saying it’s under no obligation to fulfill those contracts until its export plant is complete and fully online.

The other company is Hanwha, a South Korean company with global operations that allegedly met with the Alaskan governor last year.

However, these claims cannot be verified after officials from Venture Global and Hanwha failed to respond to requests for comment.

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Meanwhile, Joey Merrick, a prominent Alaska labor union leader, says he’s leading a new group that’s pitching AGDC on a potential investment in the project. Merrick says he’s working with Fengate, an asset management business, and Ullico Inc., a labor-aligned insurance and investment company. Dubbed Alaska Gasline & LNG, Merrick claims his new company has access to the $150 million needed to advance Alaska LNG to its next stage.

We’re trying to, basically, take control of the project and work with AGDC and move it to the next stepI’m very optimistic. I think this is exactly what the state needs — something to be able to give us some cheaper energy, and something to be able to get us a little income in a different way,” Merrick has said.

By Alex Kimani for Oilprice.com

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Alaska Senate passes draft budget, confirming $175M in bonus public-school funding

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Alaska Senate passes draft budget, confirming $175M in bonus public-school funding



Sen. Bert Stedman, R-Sitka, puts away his notes after debate on the state operating budget, Wednesday, May 1, 2024, as the Senate’s tally board displays the vote on the budget’s effective date. (Photo by James Brooks/Alaska Beacon)

The Alaska Senate on Wednesday approved a draft $12.25 billion state operating budget and in the process, finalized legislative plans to offer public schools a one-time, $175 million funding bonus.

The Senate’s proposed Permanent Fund dividend is about $1,580 per recipient, including an estimated $222 energy relief payment. That’s below the $2,270 figure included in a competing draft passed by the House, and the final figure will be subject to further debate. 

The smaller amount reduces the risk of the state spending down savings.

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“We’re living within our means. This is what it looks like,” said Sen. Bert Stedman, R-Sitka and co-chair of the Senate Finance Committee.

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Sen. Bert Stedman, R-Sitka, speaks on the floor of the Alaska Senate, Wednesday, May 1, 2024. (Photo by James Brooks/Alaska Beacon)

Stedman said the budget balances if the state’s oil production hits estimates and if North Slope oil prices average $78 per barrel between July 1, 2024, and June 30, 2025.

Oil and other sources of revenue would be enough to pay for state operations, as well as new legislation and the state’s capital budget, which pays for construction and renovation projects statewide. 

Wednesday’s 17-3 vote, which follows the state House’s passage of its own draft operating budget, triggers the final phase of the Alaska Legislature’s annual budget process, where legislators negotiate a compromise between the two drafts.

In places where the drafts match, the relevant item is final, except that Gov. Mike Dunleavy has the ability to reduce or eliminate final items with his line-item veto power. He cannot increase them or add new ones.

On education, the Senate included a $680 one-time boost to the state’s Base Student Allocation, the core of Alaska’s per-student funding formula. 

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That’s worth about $175 million statewide, and the same language is in the House’s draft budget, making the item final, except for the governor.

Last year, Dunleavy vetoed half of an identical one-time boost, but in a news conference with reporters on Wednesday, the governor signaled that he may not repeat his veto.

“I’ve told people I’m open to the increase,” Dunleavy said, “an increase in one-time funding, especially to help with the inflationary issues.”

The Senate budget also includes a House-adopted plan to spend $5.2 million more on reading programs for students in kindergarten through third grade.  

Senators included additional money for student transportation, something that will have to be negotiated with the House, which did not include it.

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Also subject to further negotiation is $11.9 million in education money added after the federal Department of Education warned that the state underfunded some school districts during the COVID-19 pandemic.

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Senate President Gary Stevens, R-Kodiak (center), listens to Sen. Bert Stedman, R-Sitka (left) and Senate Majority Leader Cathy Giessel, R-Anchorage (right) during a break from debates Wednesday, May 1, 2024. (Photo by James Brooks/Alaska Beacon)

The Senate is led by a supermajority of nine Democrats and eight Republicans, and Wednesday’s draft budget was crafted by that supermajority. 

Before the final vote, the three Republicans outside the majority offered 21 amendments containing a variety of priorities, but all failed.

The most contentious amendments dealt with the amount of this year’s Permanent Fund dividend, which Stedman labeled “the focal point of most budgets.”

Sen. Mike Shower, R-Wasilla, proposed taking extra money from the Alaska Permanent Fund to increase the Senate’s proposed dividend to a figure above the House’s amount, once the energy relief payment is included. 

While much of the fund is constitutionally protected, lawmakers need only a simple majority to break a law that limits spending from the fund’s earnings reserve, which contains money accumulated from the fund’s investments.

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Sen. Robert Myers, R-North Pole, speaks Wednesday, May 1, 2024, during debates on the state operating budget. (Photo by James Brooks/Alaska Beacon)

Shower said his proposed dividend is what was recommended by a bipartisan, bicameral working group and implied that passage could encourage work on a plan to bring the state’s long-term finances into balance.

He had support from Sen. Shelley Hughes, R-Palmer, who said, “If we were to pass this, we would start on the road toward a fiscal plan.”

But a majority of other senators opposed the idea. Stedman said he believed the amendment would instantly create a billion-dollar deficit.

“I don’t think this is a prudent amendment,” he said.

Sen. Forrest Dunbar, D-Anchorage, said he’d like to see larger dividends, but thus far, the Legislature hasn’t advanced other needed components of the financial plan, including new state revenue.

Shower’s amendment failed, 6-14. 

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The House and Senate are expected to appoint lawmakers to a budgetary conference committee on Monday, starting work on a final budget draft.

The budget is typically the final item passed before the Legislature adjourns for the summer.

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From left to right, Sens. Loki Tobin, D-Anchorage; Bert Stedman, R-Sitka; and David Wilson, R-Wasilla, discuss a proposed budget amendment on Wednesday, May 1, 2024. (Photo by James Brooks/Alaska Beacon)


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Alaska Beacon is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Alaska Beacon maintains editorial independence. Contact Editor Andrew Kitchenman for questions: info@alaskabeacon.com. Follow Alaska Beacon on Facebook and X.

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Making the Most of It in Alaska's Ruth Gorge » Explorersweb

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Making the Most of It in Alaska's Ruth Gorge » Explorersweb


There’s a tradition of improvisation on Mount Dickey in Alaska’s Ruth Gorge. Season after season, the mountain’s mile-high granite faces draw the planet’s best climbers. And season after season, these visitors watch their main objectives evaporate as Mother Nature forces them to obey.

That doesn’t mean they fail.

Tom Livingstone and Gaspar Pintar are the latest pilgrims in the Mt. Dickey saga. The Great Wall (ungraded as of this writing) slices across lower slabs and up a tenuous couloir to the 2,909m summit. It’s an unconventional line on the mountain’s often-overlooked south face.

Its features attracted Livingstone and Pinter as soon as they arrived in the Gorge, but amounted to Plan B. Originally, they had set their sights on the classic east face route Blood From the Stone — but it didn’t give passage.

“When we swung our axes into what we hoped was ice, we found mostly unprotected sugar snow,” Livingstone wrote on Instagram. He noted other routes stopped them with similar obstacles.

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Bad rock, few routes

Pivoting, he and Pintar refocused on the south face. It’s famous for bad rock and generally bereft of routes. But the climbers noticed an opportunity.

“Crazy slabs” protected the couloir and summit access, Livingstone wrote. But the climbers made a bid anyway.

“Many pitches looked improbable, always tricky. The weather was fickle, but we got lucky,” Livingstone reported. “A subtle traversing line up steep rock led us to the middle of the face, pumpy ice, and a cave bivy. Then we zigzagged higher as snow fell (or rather, rose in the updraft).”

Another marginal bivy on a “snow arete” led to pitches of overhanging neve to the top. In their weeks-long stay, this would be the only summit the two touched.

“Conditions seem ‘bad’ this year but we’re happy to have made the most of it,” Livingstone commented — a takeaway that falls directly in line with the recent history of Ruth Gorge climbing.

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Failure or opportunity?

For an adroit alpine climber, Blood From the Stone (1,524m, A1 M7+ WI6+X) is a juicy prize. That’s part of the reason Sean Easton spent multiple seasons establishing it with the likes of Ueli Steck. Deterred over and over by ephemeral ice, Easton finally broke through in 2002 with Steck.

The threshold was thin, even though both climbers were at the height of their fitness. (Steck was fresh off his groundbreaking Eiger solo.) Each man took lead falls that would unnerve the masses, and Easton published a breathy report in the American Alpine Journal.

“With moments of doubt, we had ventured forth without certainty…and the path had unwound before us,” he said.

Thin ice and outright difficulty combined to prevent a repeat for over two decades. Livingstone and Pintar are not the first Blood hopefuls to abandon the route and create their own. Alan Rousseau and Jackson Marvell followed the same blueprint to stamp out Ruth Gorge Grinder (1,524m, AI6+ M7 A1) in 2019.

“A pitch and a half up [Blood From the Stone], it became obvious to me there was not enough ice on the route to safely continue,” Rousseau wrote. “If we didn’t feel defeated enough already in that moment, as we rappelled back to the bivy, we saw two ravens fervently tearing through Jackson’s bag of stashed food.”

Defeat, shmefeat. Marvell and Rousseau returned to the Ruth with Matt Cornell in 2023. Another new east face line, Aim For the Bushes (1,600m, AI6 M6X) resulted.

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In the Ruth Gorge, one thing’s clear: Just because a rope team backs off doesn’t mean they’re out of the fight.

“In total, we tried six routes,” Livingstone said of his and Pintar’s trip, “staying busy and psyched! Hats off to folk who’ve climbed routes here.”





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Alaska Senate passes draft budget, confirming $175 million in bonus public-school funding • Alaska Beacon

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Alaska Senate passes draft budget, confirming $175 million in bonus public-school funding • Alaska Beacon


The Alaska Senate on Wednesday approved a draft $12.25 billion state operating budget and in the process, finalized legislative plans to offer public schools a one-time, $175 million funding bonus.

The Senate’s proposed Permanent Fund dividend is about $1,580 per recipient, including an estimated $222 energy relief payment. That’s below the $2,270 figure included in a competing draft passed by the House, and the final figure will be subject to further debate. 

The smaller amount reduces the risk of the state spending down savings.

“We’re living within our means. This is what it looks like,” said Sen. Bert Stedman, R-Sitka and co-chair of the Senate Finance Committee. 

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Sen. Bert Stedman, R-Sitka, speaks on the floor of the Alaska Senate, Wednesday, May 1, 2024. (Photo by James Brooks/Alaska Beacon)

Stedman said the budget balances if the state’s oil production hits estimates and if North Slope oil prices average $78 per barrel between July 1, 2024, and June 30, 2025.

Oil and other sources of revenue would be enough to pay for state operations, as well as new legislation and the state’s capital budget, which pays for construction and renovation projects statewide. 

Wednesday’s 17-3 vote, which follows the state House’s passage of its own draft operating budget, triggers the final phase of the Alaska Legislature’s annual budget process, where legislators negotiate a compromise between the two drafts.

In places where the drafts match, the relevant item is final, except that Gov. Mike Dunleavy has the ability to reduce or eliminate final items with his line-item veto power. He cannot increase them or add new ones.

On education, the Senate included a $680 one-time boost to the state’s Base Student Allocation, the core of Alaska’s per-student funding formula. 

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That’s worth about $175 million statewide, and the same language is in the House’s draft budget, making the item final, except for the governor.

Last year, Dunleavy vetoed half of an identical one-time boost, but in a news conference with reporters on Wednesday, the governor signaled that he may not repeat his veto.

“I’ve told people I’m open to the increase,” Dunleavy said, “an increase in one-time funding, especially to help with the inflationary issues.”

The Senate budget also includes a House-adopted plan to spend $5.2 million more on reading programs for students in kindergarten through third grade.  

Senators included additional money for student transportation, something that will have to be negotiated with the House, which did not include it.

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Also subject to further negotiation is $11.9 million in education money added after the federal Department of Education warned that the state underfunded some school districts during the COVID-19 pandemic.

Senate President Gary Stevens, R-Kodiak (center), listens to Sen. Bert Stedman, R-Sitka (left) and Senate Majority Leader Cathy Giessel, R-Anchorage (right) during a break from debates Wednesday, May 1, 2024. (Photo by James Brooks/Alaska Beacon)
Senate President Gary Stevens, R-Kodiak (center), listens to Sen. Bert Stedman, R-Sitka (left) and Senate Majority Leader Cathy Giessel, R-Anchorage (right) during a break from debates Wednesday, May 1, 2024. (Photo by James Brooks/Alaska Beacon)

The Senate is led by a supermajority of nine Democrats and eight Republicans, and Wednesday’s draft budget was crafted by that supermajority. 

Before the final vote, the three Republicans outside the majority offered 21 amendments containing a variety of priorities, but all failed.

The most contentious amendments dealt with the amount of this year’s Permanent Fund dividend, which Stedman labeled “the focal point of most budgets.”

Sen. Mike Shower, R-Wasilla, proposed taking extra money from the Alaska Permanent Fund to increase the Senate’s proposed dividend to a figure above the House’s amount, once the energy relief payment is included. 

While much of the fund is constitutionally protected, lawmakers need only a simple majority to break a law that limits spending from the fund’s earnings reserve, which contains money accumulated from the fund’s investments.

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Sen. Robert Myers, R-North Pole, speaks Wednesday, May 1, 2024, during debates on the state operating budget. (Photo by James Brooks/Alaska Beacon)
Sen. Robert Myers, R-North Pole, speaks Wednesday, May 1, 2024, during debates on the state operating budget. (Photo by James Brooks/Alaska Beacon)

Shower said his proposed dividend is what was recommended by a bipartisan, bicameral working group and implied that passage could encourage work on a plan to bring the state’s long-term finances into balance.

He had support from Sen. Shelley Hughes, R-Palmer, who said, “If we were to pass this, we would start on the road toward a fiscal plan.”

But a majority of other senators opposed the idea. Stedman said he believed the amendment would instantly create a billion-dollar deficit.

“I don’t think this is a prudent amendment,” he said.

Sen. Forrest Dunbar, D-Anchorage, said he’d like to see larger dividends, but thus far, the Legislature hasn’t advanced other needed components of the financial plan, including new state revenue.

Shower’s amendment failed, 6-14. 

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The House and Senate are expected to appoint lawmakers to a budgetary conference committee on Monday, starting work on a final budget draft.

The budget is typically the final item passed before the Legislature adjourns for the summer.

Sen. Bert Stedman, R-Sitka, puts away his notes after debate on the state operating budget, Wednesday, May 1, 2024, as the Senate's tally board displays the vote on the budget's effective date. (Photo by James Brooks/Alaska Beacon)
Sen. Bert Stedman, R-Sitka, puts away his notes after debate on the state operating budget, Wednesday, May 1, 2024, as the Senate’s tally board displays the vote on the budget’s effective date. (Photo by James Brooks/Alaska Beacon)

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