Alaska
Lawmakers skeptical as developer of Alaska LNG megaproject sets rapid construction timeline
JUNEAU — The developer of the giant Alaska LNG project is telling federal regulators that it expects to begin construction in April, as part of a plan to build construction camps, access roads and close to 100 bridge crossings to support pipeline construction.
It’s part of Glenfarne’s ambitious schedule to start laying the steel pipe for the 800-mile gas line by the end of this year.
Some Alaska lawmakers are skeptical the work can happen by then, if at all.
Glenfarne has not announced a final investment decision to build the project, though it’s expected to cost at least $44 billion. That longtime cost estimate has recently been updated, but Glenfarne has said it won’t publicly release that information.
Glenfarne last month announced that it had signed several preliminary deals with gas producers and gas line builders, atop other preliminary deals with potential gas buyers. The agreements are nonbinding, but are viewed as key steps that could one day lead to binding agreements.
[Alaska LNG says it expects to start laying pipe as early as December]
Alaska lawmakers who are increasingly focused on the proposed project say they believe Glenfarne still needs to take important steps that could delay the project.
They say Glenfarne has not sought any support from the Legislature for Alaska LNG, though the company said in a statement Wednesday that it is pursuing “property tax reforms” with state and local leaders.
Gov. Mike Dunleavy, a project supporter, has said he plans to introduce a bill that would reduce the state’s oil and gas property taxes by 90% to assist the project.
A consultant for the Alaska Legislature, GaffneyCline, has said a property tax reduction could save the developer important money up front while additional state benefits that provide the project with “fiscal stability” may also be needed from the Legislature. GaffneyCline is a subsidiary of oil field service giant Baker Hughes, which has said it plans to provide equipment for the project and make a “strategic investment” in it.
Major questions for the project include: Who will pay for it? What steps must the Legislature take to support it? And when will binding contracts with gas buyers and suppliers be signed?
Senate Majority Leader Cathy Giessel, a Republican, said she doesn’t believe Glenfarne will keep to its schedule.
Glenfarne’s target of laying pipe by year’s end “is completely unrealistic,” she said told reporters Tuesday.
One hurdle the company has yet to pursue is certification from the Regulatory Commission of Alaska of its financial and managerial fitness, Giessel told reporters. That takes six months, she said.
The company also hasn’t provided the Legislature with any fiscal information that would help lawmakers understand more about the project, she said.
“There’s a lot more to know,” she said.
“I’m not even sure they can come to a final investment decision, in light of the fact that we haven’t even determined what our tax structure will be for this project,” she said.
Glenfarne’s filing, made with the Federal Energy Regulatory Commission last week, does not represent a final schedule, said Tim Fitzpatrick, a spokesperson for Glenfarne, in an email Wednesday.
Rather, it shows how “early works” — initial construction — will be sequenced, he said.
He said the project is moving toward a final investment decision. That had originally been expected late last year.
Fitzpatrick also said Glenfarne faces no financial-fitness certification requirement before the Regulatory Commission of Alaska.
“Alaska LNG is a FERC-regulated project so this RCA certification requirement is not applicable in this instance and as such has no bearing on Alaska LNG’s schedule,” Fitzpatrick said.
“Pending FERC authorization, we are moving forward with Early Works on a pace that will enable Alaska LNG to rapidly deliver reliable, affordable energy to Alaskans,” he said.
Tons of bridges and access roads
In its first phase, Alaska LNG would deliver North Slope natural gas to Railbelt Alaskans through an 800-mile pipeline, if it’s built. The cost has been estimated at $11 billion.
The final, more expensive phase would include construction of a plant and marine terminal in Nikiski, where gas can be super-chilled into liquefied natural gas, or LNG, for shipment to Asian markets.
The state of Alaska, through its Alaska Gasline Development Corp., is a 25% partner in the project. The state will also have the option to invest up to 25% in the project’s major facilities, each of which will cost several billion dollars.
Glenfarne, based in New York, disclosed its pipe-laying plans last month.
The filing with the Federal Energy Regulatory Commission provides new details about more immediate plans.
The company said construction for “early works” will start April 15, the filing shows.
Those activities include installation of 20 main construction camps and 46 sites to store pipes.
They include 98 bridge crossings that are up to 90 feet long, along with six specialized bridges.
Temporary and permanent access roads must also be built from ice and “granular fill material,” which can include sand or gravel.
Early construction includes 619 segments of access road, the filing says.
The information required to support the early activities will be filed with the Federal Energy Regulatory Commission on March 15, in an effort to obtain authorization, the filing says.
Sen. Elvi Gray-Jackson, a Democrat and chair of the Legislative Budget and Audit Committee, said she hasn’t heard of any support the Legislature might be asked to provide, if any, to support those early activities.
“With respect to man camps or access roads, I’m not aware of any requests from Glenfarne for any state support,” she said in an interview Tuesday.
“A lot of what they’re doing has been so secret and confidential,” she said.
She’s cautiously optimistic the project can be built, but she said she doubts Glenfarne can meet its rapid timeline.
“I’m certainly not out of touch with reality,” she said.
Alaska lawmakers have said they’re uncertain what steps they may be asked to take to provide the full project with long-term fiscal stability, if any.
They say they’re awaiting the governor’s property tax proposal.
Giessel told reporters on Tuesday: “Glenfarne has told us, ‘Don’t worry, this is a private-sector project. We will bear all of the cost. We will get investors. We will take all of the overruns and delays. We’ll take all that responsibility.’”
Fitzpatrick, with Glenfarne, said the company “continues to make progress toward a final investment decision for Alaska LNG.”
That includes “engaging with state and local policymakers on property tax reforms that will enable Alaska LNG to proceed and successfully unlock billions of dollars in royalty, tax, and other economic benefits for Alaskans,” he said.
“State and borough officials have recognized that Alaska’s high property taxes are an impediment for a North Slope natural gas project for more than a decade, and this issue has repeatedly been raised before the legislature including in testimony from Glenfarne and the legislature’s oil and gas consultants,” he said.
Asked about the need for state permits for early construction such as the proposed roads or bridge crossings, Fitzpatrick said, “Permitting requirements are fully accounted for in our construction plan.”
Glenfarne is working on smaller LNG export projects in the Lower 48, including Magnolia LNG in Louisiana and Texas LNG.
Giessel told reporters that Glenfarne has not reached a final investment decision for those projects.
“In fact, they’ve not reached FID on any North American project yet, and that Texas project has been in the works now for a couple of years,” she said. “So I am skeptical about any of those timelines they had in that FERC document.”
Should Alaska invest?
House Majority Leader Chuck Kopp, a Republican, said he’s optimistic the Alaska LNG project will be built this time after decades of unsuccessful attempts by earlier, similar projects.
“I do appreciate that all the capital risk has been on them to this point,” Kopp said of Glenfarne.
“The spend rate, whatever it is, I really don’t know,” he said. “But I know (Glenfarne has) spent a lot and the state has not.”
Kopp said the state might want to consider investing 5% in the pipeline, at a potential cost of around $600 million, from the $3 billion Constitutional Budget Reserve savings account.
“If we had an investor interest, we would have access to everything another investor could rightfully see before they made that decision,” he said.
An investment could increase revenue to the state through tariff income that would come alongside production taxes, royalties and other income, he said.
The project is important because it has the potential to support future generations of Alaskans, he said.
The idea of a state investment in the project is something he’s discussing with colleagues, he said.
Kopp said he believes the lack of information from the company to lawmakers may relate to upcoming details that could push the project forward.
Perhaps President Donald Trump’s State of the Union speech, set for Feb. 24, includes more federal support for the project, perhaps even a direct investment, Kopp said.
“I don’t have any insider baseball on this,” he said. ”But it would be consistent with how this administration likes do things. And the president has said Alaska is a national energy and a national strategic priority.”
“So there could be a massive commitment that pushes this into FID,” or final investment decision, he said.
Rep. Ky Holland, an independent and co-chair of the House Energy Committee, said he — along with many other Alaskans — would love to see the project built.
He said it has received state attention and funding in the past that has prevented state investment in other opportunities, including in renewable energy that could support stable utility costs, such as the Susitna-Watana Dam project or wind projects.
In that way, it’s been a “drag on the economy,” he said.
It’s hard to say if Alaska LNG will be built, he said.
“I’m still waiting to see clear ship-or-pay binding agreements for someone to buy gas,” he said. “Absent that, I appreciate the level of enthusiasm the current developers have.”
Holland said state agencies don’t appear to be staffed up with needed manpower and finances to support the project’s permitting requirements, while budgets for workforce training or contractor assistance appear inadequate. Thousands of workers will be needed to build the pipeline.
“The (state agency) budgets I’ve seen look like business as usual, which is barely keeping the wheels on the bus,” he said.
Alaska
Alaska Senate bill spurs debate over funding of homeschool programs
JUNEAU — Lawmakers in the Alaska Senate have introduced an omnibus education bill that would overhaul the administration of publicly funded homeschooling programs.
Senate Bill 277, introduced last week, would increase Alaska’s annual $1.3 billion public school budget by roughly $100 million by adjusting the annual budget for inflation, adding new reading proficiency grants and boosting spending on student transportation.
It would also make changes to the state’s subsidized homeschooling system, for which the bill drew swift criticism.
Under the bill, correspondence programs — which provide cash allotments to the families of homeschoolers each year — would receive tens of millions of dollars in additional annual funding, a change that homeschooling proponents have long sought. But the state would require that funding to be funneled through students’ home districts.
Alaska last year had over 24,000 students enrolled in more than 30 correspondence programs. Of those, nearly 16,000 students were enrolled in correspondence programs administered by districts other than the ones in which they resided.
Tens of millions of dollars in state funding are diverted annually to districts that administer statewide homeschooling programs.
Some educators have raised alarm over the diversion of public funds from students’ home districts, especially after correspondence programs grew in popularity during the coronavirus pandemic.
Under the Senate bill, the correspondence students’ funding would first flow to the districts in which they reside, which would then be required to enter into cooperative agreements with the districts that administer the correspondence programs.
Under these agreements, the home district would retain a percentage of the students’ funding to pay for administrative costs, as well as additional costs for students to access other in-person classes or services, such as sports teams.
The bill could potentially increase funding substantially in districts where thousands of correspondence students live, including in Anchorage, Fairbanks, the Matanuska-Susitna Borough and the Kenai Peninsula.
The bill would increase overall state spending on education by $100 million annually, including a $25 million increase in per-student formula funding for correspondence students; $4.8 million for student transportation costs; and $22 million for grants to incentivize reading proficiency. The bill would include a modest increase to per-student formula funding, raising the Base Student Allocation by about $125, from $6,660 to roughly $6,785.
The proposed funding boost is meant to keep up with inflation, said Sen. Löki Tobin, an Anchorage Democrat and chair of the Senate Education Committee. Inflation-adjusted spending on education has dropped in the past decade.
Even after the Legislature pushed through last year’s $175 million education funding increase, school districts across the state face multimillion-dollar budget deficits going into next school year. The Anchorage School District, in response to a $90 million deficit, passed a budget last month including school closures, increased class sizes and cuts to staff.
Correspondence funding a central debate
Some of the most substantial and controversial changes in the bill are around how correspondence programs are funded.
Correspondence programs originated in the state’s territorial days, when students in remote areas would correspond with educators in a central program by mail. The system today allows students from across the state to enroll in district-run homeschool programs, and receive an annual allotment of public funds to cover educational materials, classes and activities.
Homeschooling programs have faced increased scrutiny in recent years after a lawsuit challenged the use of correspondence allotments to cover the cost of tuition in Christian private schools. That litigation is ongoing.
The bill’s changes would apply, for instance, to Galena City School District’s IDEA, the state’s largest correspondence program. IDEA enrolls more than 7,000 students across the state, ranking Galena among some of the largest districts across the state, measured by attendance. As of last school year, only one of those students lived in Galena, a village of roughly 500 residents.
At a Senate Education Committee meeting Wednesday, Tobin said that requiring correspondence students to enroll in the district where they live addresses concerns from school districts that offer services for those students but are struggling to keep their facilities and services open — making choices between whether they close pools or cut middle school sports, for example.
“The hope for this is to continue to support our brick-and-mortar schools and then also recognize that they are also providing services, sometimes, to students who aren’t enrolled in their district, and to ensure that there is no loss of that ability to continue to offer those services or any costs that shifted onto the family,” Tobin said.
Tobin said increasing the BSA for correspondence students, alongside funneling more money into students’ home districts, would allow for those students to continue their state-funded correspondence education while utilizing services and programs offered by their local school district.
In its first week, however, the bill has garnered significant pushback from correspondence families and programs, many of whom asserted the bill is a threat to their programs.
Galena City School District superintendent Jason Johnson said he believes the bill poses an existential threat to correspondence programs. While there is an 8% cap on administrative fees in the bill, he said the lack of a cap on fees levied for education services leaves local districts able to charge unchecked amounts from correspondence students’ BSAs.
In an email to IDEA families supplied by Tobin’s office, Johnson called for parents to write to lawmakers in opposition to the bill, stating that if SB 277 remains, “most Alaskan statewide correspondence programs will sink and Alaskan families will suffer the loss of Alaska’s current robust school choice options.”
Tobin in an interview Thursday contested the presumption that local districts can charge correspondence programs 100% of state funding, calling it “ill-placed.”
She pointed to the requirement for a collaborative agreement, a process overseen by the state education department, that she said would stop local districts from taking more than would be needed to cover costs of what correspondence students utilize at the local district.
North Pole resident Kendra Piper, parent of a correspondence student, testified in opposition to the bill Wednesday. She said that more than just the dollar amount, the bill ties correspondence students closer to the school districts they’ve stepped away from.
“SB 277 shifts funding and control back towards the very districts that many families like mine have chosen to leave. Even if it’s described as a small change, the reality is that it weakens the idea that funding should follow the student fully,” Piper said.
Sen. Rob Yundt, a Wasilla Republican and Education Committee member who took part in drafting the bill, said part of his support for the bill is rooted in the increasing per-student state funding for correspondence students.
“For a long time, folks have wanted to see this increase,” Yundt said. “I don’t think anybody wants to hear that their child’s not a whole child, that they’re only 90% of a child.”
Senate Education Committee member Jesse Kiehl, a Juneau Democrat, took issue with that characterization.
“What we do here in this section we’re talking about is pump additional cash into providing correspondence study. That’s a policy decision the Legislature may make, but it’s got nothing to do with the value of a child,” Kiehl said.
Kiehl questioned whether it costs the same amount to fund education for a homeschooled student as a brick-and-mortar school student.
“Are we paying the amount we need to educate the child in that way?” he said.
Yundt said at the Wednesday meeting that the committee is already weighing feedback to draft another version of the legislation.
Tobin told reporters earlier this week that the bill represents perspectives from both caucuses.
Tobin implied that, in working with the Senate minority and the House, she hopes the bill will garner enough support to withstand a potential governor’s veto.
Yundt told reporters earlier this month that correspondence funding and reading grants were two top priorities for the minority.
House Minority Whip Justin Ruffridge, a Soldotna Republican, said Thursday that he has not yet reviewed the bill.
Jeff Turner, a spokesperson for Gov. Mike Dunleavy, said the governor had no comment on the bill at this time.
House bills call for broader funding
Other bills in the Legislature this session seek to increase funding streams for Alaska public schools, including raising per-student funding and changing how and when attendance is calculated.
The House Education Committee introduced a bill earlier this month to increase the state’s per-student funding for schools.
House Bill 374 seeks to increase the Base Student Allocation by $630, an increase from $6,660 to $7,290 per student per year. That amounts to an estimated $158 million increase in yearly funding.
House Education Co-Chair Rebecca Himschoot, a Sitka independent, said lawmakers arrived at the $630 BSA increase by calculating what the five largest school districts by student count would need to have a balanced budget for fiscal year 2027.
Ruffridge was one of 10 minority members to vote to override the governor’s veto of the education formula boost last year. A member of the joint task force on education funding, he said he’s skeptical that the Legislature will have the same drive to get another similarly sized increase on the books this year.
“From my perspective, having been a part of the group that supported the largest BSA increase in Alaska history, I know that the efforts that we made to get there were extensive, and, you know, my sense of where we’re at right now is that it will be very difficult to repeat anything like that again,” Ruffridge said in an interview earlier this month.
Another House bill seeks a different change to the education formula calculation.
Schools receive state funding based on the average daily membership of their school. That number is typically not finalized until the fall, leaving districts unsure how much money they will be getting from the state until just before the school year begins.
HB 261 aims to make education funding more predictable, says its sponsor, Juneau Democratic Rep. Andi Story, co-chair of the House Education Committee.
It would allow school districts to calculate their average daily membership based on the average from the last three years, or the most recent known student count period.
That bill would cost the state an estimated $147 million per year.
Daily News reporter Iris Samuels contributed from Anchorage.
Alaska
Alaska Airlines, FedEx cargo planes narrowly avoid catastrophic crash while landing at Newark airport
An Alaska Airlines aircraft nearly collided with a FedEx cargo plane during an aborted landing at Newark Liberty International Airport Tuesday evening, radar data shows.
Alaska Airlines Flight 294 was ordered to perform a go-around when FedEx Flight 721 was cleared to approach an intersecting runway for landing, the FAA said in a statement.
The passenger plane cleared the FedEx charter by as little as 300 feet — close to the length of the average American football field — data from FlightRadar24 indicated.
Air traffic controllers directed the Alaska flight to reroute just seconds before it was supposed to touch down, according to audio obtained by the same software.
Michael McCormick, the former vice president of the FAA, told ABC 7 New York that the near-mishap came down to two intersecting runways.
“”It is a challenge for a tower controller to try to get that timing perfect, it doesn’t always work and that’s what happened in this case, so the tower controller waited and unfortunately, in my opinion, too long and they had to send the aircraft on a go-around,” McCormick said.
The FAA and the NTSB are probing the near crash.
The ongoing partial government shutdown has caused significant staffing shortages at a several major airports across the country — with TSA workers currently not receiving pay.
White House economists estimated that the shutdown has caused upwards of $2.5 billion in losses.
Last week, Senate Democrats blocked a bill that would have restored funding to the DHS for the fourth time in the past month.
Delta Air Lines CEO Ed Bastian slammed Congress for the ongoing shutdown, calling politicians’ apparent refusal to settle the funding debacle “inexcusable.”
“We’re outraged,” Bastian seethed.
The partial shutdown entered its 33rd day on Thursday.
Alaska
Coast Guard investigating
Two crew members of a tugboat were killed and two others were injured in what the Coast Guard described Wednesday as a “confined space incident” aboard a barge moored in southeast Alaska last weekend.
A Coast Guard news release provided limited details about what happened to the four, but said they were in a confined space aboard the freight barge Waynehoe on Sunday when other crew members from their tug, the Chukchi Sea, lost contact with them. The barge was moored about 25 miles northwest of Ketchikan.
The deceased crew members were identified as Sidney Mohorovich and Ben Fowler, according to the Coast Guard. Its news release didn’t identify the surviving crew by name. Coast Guard spokesperson Alexander Ransom later told the Associated Press in an email that both survivors were reported to be in good condition.
The parents of Mohorovich, 28, said they were told by Coast Guard officials there was methane gas present in the confined space.
“We don’t know why the series of events that led to all the people being in the confined space, if they all like went down as a team or in separate stages,” Todd Mohorovich told the AP by phone from his home in Sedro-Woolley, Washington. “I have no information on that, but what I can tell you is that the confined space had high levels of methane gas in it.”
He did not know the source of the gas or why it was present. The Coast Guard did not immediately respond to an email seeking confirmation of the presence of methane gas.
Todd and Eva Mohorovich last spoke to their son Saturday night when he told them about impending bad weather. “He said that the barge was in a spot where they were going to be able to be sheltered from that storm,” Todd Mohorovich said.
The crew planned to perform normal deck duties to make sure everything was secured ahead of the storm.
Federal regulations define “confined space” on a vessel as “a compartment of small size and limited access such as a double bottom tank … or other space which by its small size and confined nature can readily create or aggravate a hazardous exposure.” That could include a lack of oxygen.
Watchstanders at the Coast Guard’s command center in Alaska’s capital Juneau received a mayday call at 9:14 a.m. local time Sunday, informing them that the crew of the Chukchi Sea had lost contact with the barge, the Coast Guard said. The tugboat crew recovered the body of one of the victims and helped both survivors escape the confined space while the Coast Guard was on its way to the scene.
The barge was then towed to Ketchikan, where the confined space “was able to be safely cleared for the recovery of the second deceased crew member,” Ransom told AP.
The causes of death were not released, and the bodies were sent to Anchorage for autopsies.
“Our deepest condolences are with the families and colleagues of the crewmembers affected by this tragic incident,” said Capt. Stanley Fields, commander of the Coast Guard sector for Southeast Alaska, in a statement. “This is a heartbreaking reminder that confined spaces on vessels can contain extremely dangerous, invisible hazards.”
Sidney Mohorovich was one month into his new job with Hamilton Marine Construction.
The company didn’t return a message seeking comment.
Mohorovich, a large equipment mechanic, was on his first job in Alaska. He lived in Deming, Washington, with his fiancee ahead of their planned June wedding.
He previously was a logger and welder, and before that he learned how to build houses and do electrical work. “He could pretty much figure anything out,” his mother said.
“He was loved by so many,” Eva Mohorovich said of her son’s outgoing personality. “Just an exceptional human being, smarty, witty, funny, loving.”
It was in his heart to lend a hand to people in need, and he was unselfish in so many ways, his father said.
“We’re just really thankful for who he was,” Todd Mohorovich said. “I wouldn’t change a thing in the life that we’ve all shared together, regardless of this the tragedy at this time. If we were to change something, it would lead to other changes that we don’t know about.”
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