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The Alaskan gambit: $44 billion LNG project decades in the making

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The Alaskan gambit:  billion LNG project decades in the making


Greater than 800 miles from the closest ice-free port accessible to ships, the North Slope has no pure fuel pipeline and thus no marketplace for firms reminiscent of Exxon Mobil and Conoco Phillips to promote their fuel into.

Now a deliberate $44 billion mission that might pipe fuel the size of Alaska to an LNG terminal exterior Anchorage stands to alter all that as state officers, with the help of the Biden administration, search to breathe new life into the state’s declining oil and fuel business by delivery the fuel throughout the northern Pacific to South Korea and Japan.

A long time within the making, the mission has confounded builders and engineers for years, entailing not solely planning to construct a pipeline throughout among the nation’s most rugged and frigid wilderness however doing so at a worth that may compete with a flood of latest LNG tasks coming on-line alongside the Gulf Coast, the Center East and Australia. All at a time vitality analysts are projecting demand for oil and fuel to peak inside the subsequent twenty years as nations reply to local weather change. 

“It appeared like this factor was useless,” mentioned Clark Williams-Derry, an analyst with the nonprofit Institute for Power Economics and Monetary Evaluation. “This mission is not low-cost to start with, after which you will have all of the query marks about what the LNG market will seem like a decade from now. There’s many causes to suppose this is not going to occur, however with out this mission, that fuel is stranded.”

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Oil firms started drilling on the North Slope within the late Nineteen Sixties, and inside a decade had been transferring oil to tankers in southern Alaska on the Trans Alaska Pipeline System. On the time, fuel was considered as a waste product, too low-cost to be warrant the expense of constructing one other pipeline.

That calculus started to alter within the run-up in pure fuel costs within the 2000s, and by 2013 the state of Alaska had partnered with Exxon, Conoco Phillips and BP, which later bought its stake on the North Slope to Houston oil firm Hilcorp, to construct a fuel pipeline and LNG terminal linked to the North Slope.

They spent a whole bunch of tens of millions of {dollars} on the preliminary engineering, solely to observe world oil and fuel markets collapse in 2014 following the increase in U.S. shale manufacturing. By 2017 the oil firms had pulled out of the mission, handing it over to state-owned Alaska Gasoline Growth Corp.

The prospects seemed grim. A 2016 evaluation by the analysis agency Wooden Mackenzie discovered that in an effort to make the type of revenue traders would anticipate, the Alaska LNG mission would want to promote fuel at $11.70 per million British Thermal Models, far above what LNG was promoting for in Asia on the time.

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However state officers plugged forward, shifting to a tolling mannequin by means of which they charged clients a charge to liquefy their fuel versus promoting the LNG itself – decreasing their threat. Additionally they determined to finance the mission largely by means of loans to decrease their prices, decreasing their projected worth for LNG to $6.70 per mmBTUs, aggressive with LNG vegetation on the Gulf of Mexico if they will pull it off.

Change in fortune

When Russian troops invaded Ukraine final 12 months, driving up fuel costs in Europe and Asia to properly in extra of $15 per mmBTUs, Alaska LNG out of the blue seemed prefer it may very well be a viable mission.

“The affect of the Russian invasion of Ukraine tipped the world’s vitality market on its head,” mentioned Frank Richards, president of the Alaska Gasoline Growth Corp. “What we see is elevated curiosity from allies in Japan and Korea in having a dependable supply of provide, and we’ve got a stranded asset we will supply at a steady worth.”

And so they have the ostensible help of the Biden administration, with U.S. Ambassador to Japan Rahm Emanuel internet hosting a gathering of high officers from each nations in Tokyo final 12 months to “focus on how Alaska LNG can present steady, sustainable and reasonably priced vitality sources to Japan.”

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Final month the Division of Power renewed an export license for the mission that had been beforehand authorised by the Trump administration, following Biden’s resolution to permit Conoco Phillips to maneuver forward on its controversial Willow oil mission on the North Slope.

However deep questions stay as as to whether Alaska LNG will really go forward, together with whether or not it could possibly clear a collection of lawsuits by environmental teams arguing the federal authorities has did not adequately assess the greenhouse fuel emissions the mission will generate.

They declare these emissions will likely be far in extra of LNG tasks alongside the Gulf Coast due to the vitality calls for of pumping fuel greater than 800 miles from the North Slope – nearly twice the space from West Texas’ Permian Basin to the Gulf Coast. On the identical time, they’re questioning whether or not the mission is important contemplating the flood of LNG tasks already below building alongside the Gulf Coast.

Timing questioned

Within the best-case state of affairs, Alaska LNG wouldn’t start delivering fuel to clients till 2030. And environmentalists argue the mission is simply going forward due to a $30 billion federal mortgage assure approved by Congress in 2004 as half of a bigger spending deal.

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“Is that this going to result in extra exports, or this can be a mission we don’t actually need and also you’ve constructed a bunch of infrastructure you don’t want?” Nathan Matthews, an legal professional with the Sierra Membership, mentioned. “Europe is quickly going to renewables, so whether or not the identical demand (for fuel) will likely be there a decade from now could be a query. From a local weather perspective we certain hope there gained’t be.”

Alaska officers are planning to have their financing in place by early subsequent 12 months and have employed Goldman Sachs to advise them.

However it may very well be a troublesome promote. Not one of the oil firms working within the North Slope have thus far agreed to put money into the mission, in line with a spokesman for the Alaska Gasoline Growth.

Each Exxon and Conoco mentioned they supported the mission however solely when it comes to promoting their pure fuel into the pipeline. Hilcorp didn’t reply to a request for remark.

To some extent, the excessive upfront prices of the mission are anticipated to be offset by the low value of pure fuel manufacturing on the North Slope, federal tax credit for carbon storage and the quick delivery distance from Alaska to Asia in contrast with the Gulf Coast. However discovering traders prepared to cough up $44 billion shouldn’t be going to be straightforward.

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“And that’s in the event that they don’t have value overruns, which is a giant threat for whoever takes this on,” Williams-Derry of the Institute for Power Economics mentioned. “The one factor that may preserve this factor afloat is that this net of subsidies. Perhaps you get fairness traders from Japan and Korea with the situation you employ their producers and ship builders, so it’s simply they get low-cost gasoline however a lift to their boat constructing business.”

Solely time is operating out.

In its evaluation Wooden Mackenzie identified it expects world fuel demand to peak by 2040, steadily declining within the years following as wind and photo voltaic vitality take a bigger share of the worldwide vitality market.

Alaska LNG is planning to export fuel to Asia no less than by means of the early 2060s, with the export license awarded by the Biden administration final month good for 30 years.

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Alaska

Seattle offers much more than a connection hub for Alaska flyers

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Seattle offers much more than a connection hub for Alaska flyers


Lately I’ve spent too much time at the Seattle airport and not enough time exploring the Emerald City.

It’s not just about downtown Seattle, either. I’ve been catching up with friends in the area and we shared stories about visiting the nearby San Juan Islands or taking the Victoria Clipper up to Vancouver Island (bring your passport).

There are some seasonal events, though, that make a trip to Seattle more compelling.

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First on the list is Seattle Museum Month. Every February, area museums team up with local hotels to offer half-price admission.

There is a catch. To get the half-price admission, stay at a downtown hotel. There are 70 hotels from which to choose. Even if you just stay for one night, you can get a pass which offers up to four people half-price admission.

It’s very difficult to visit all of the museums on the list. Just visiting the Seattle Art Museum, right downtown near Pike Place Market, can take all day. There’s a special exhibit now featuring the mobiles of Alexander Calder and giant wood sculptures of artist Thaddeus Mosley.

But there are many ongoing exhibits at SAM, as the museum is affectionately known. Rembrandt’s etchings, an exhibit from northern Australia, an intricate porcelain sculpture from Italian artist Diego Cibelli, African art, Native American art and so much more is on display.

It’s worth the long walk to the north of Pike Place Market to visit the Olympic Sculpture Park, a free outdoor exhibition by SAM featuring oversized works, including a giant Calder sculpture. The sweeping views of Elliott Bay and the mountains on the Olympic Peninsula are part of the package.

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My other favorite art museum is the Burke Museum at the University of Washington. What I remember most about the Burke Museum is its rich collection of Northwest Native art.

But the term “museum” covers an incredible array of collections. A visit to the Chihuly Garden and Glass Museum is a chance to see the most fanciful creations of renowned glass blower Dale Chihuly. It’s right next to the Space Needle.

You have to go up to the top and see the new renovations.

“They took out most of the restaurant,” said Sydney Martinez, public relations manager for Visit Seattle.

“Then they replaced the floor with glass. Plus, they took the protective wires off from around the Observation Deck and put up clear glass for an uninterrupted view,” she said.

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If you visit the Space Needle in February, there’s hardly ever a line!

Getting from the airport to downtown is easy with the light rail system. There’s a terminal adjacent to the parking garage in the airport. The one-way fare for the 38-minute train ride is $3. From downtown, there are streetcars that go up Capitol Hill and down to Lake Union.

Martinez encourages travelers to check out the Transit Go app.

“All of the buses require exact change and sometimes that’s a hassle,” she said. “Just add finds to your app using a credit card and show the driver when you get on.”

Pike Place Market is a downtown landmark in Seattle. Fresh produce, the famous fish market, specialty retailers and restaurants — there’s always something going on. Now there’s even more to see.

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Following the destruction of the waterfront freeway and the building of the tunnel, the Seattle Waterfront project has made great strides on its revitalization plan. The latest milestone is the opening of the Overlook Walk.

The Seattle Waterfront project encompasses much more than the new waterfront steps. Landscaping, pedestrian crossings and parks still are being constructed. But you cannot miss the beautiful staircase that comes down from Pike Place Market to the waterfront.

“There’s a really large patio at the top overlooking Elliott Bay,” said Martinez. “The stairs go down to the waterfront from there, but there also are elevators.”

Tucked under one wall is a completely new exhibit from the Seattle Aquarium, which is right across the street on the water. The Ocean Pavilion features an exhibit on the “Indo-Pacific ecosystem in the Coral Triangle.” I want to see this for myself!

Wine lovers love Washington wines. And Seattle shows up to showcase the increasing variety of wines available around the state. Taste Washington brings the region’s food and wines together for an event in mid-March.

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Hosted by the WAMU Center near the big sports stadiums, Taste Washington features 200 wineries and 75 restaurants for tastings, pairings and demonstrations. There are special tastings, special dinners (plus a Sunday brunch) and special demonstrations between March 13 and 17.

There’s another regionwide feasting event called Seattle Restaurant Week, where participating restaurants offer a selected dinner for a set price. No dates are set yet, but Martinez said it usually happens both in the spring and the fall.

It’s not downtown, but it’s worth going to Boeing Field to see the Museum of Flight. This ever-expanding museum features exhibits on World War I and II, in addition to the giant main hall where there are dozens of planes displayed. I love getting up close to the world’s fastest plane, the black SR-71 Blackbird. But take the elevated walkway across the street to see the Concorde SST, an older version of Air Force 1 (a Boeing 707) and a Lockheed Constellation.

One of the most interesting exhibits is the Space Shuttle Trainer — used to train the astronauts here on the ground. There’s an amazing array of space-related exhibits. Don’t miss it.

Some travelers come to Seattle for sports. Take in home games from the Seattle Kraken hockey team or the Seattle Sounders soccer team this winter.

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Other travelers come to see shows. Moore Theatre is hosting Lyle Lovett on Feb. 19 and Anoushka Shankar on March 13. Joe Bonamassa is playing at the Climate Pledge Area on Feb. 16. There are dozens of live music venues throughout the area.

It’s easy to get out of town to go on a bigger adventure. The Victoria Clipper leaves from the Seattle Waterfront for Victoria’s Inner Harbour each day, starting Feb. 16. If you want faster passage, fly back on Kenmore Air to Lake Union.

The Washington State Ferries offer great service from downtown Seattle to the Olympic Peninsula. Or, drive north to Anacortes and take the ferry to the San Juan Islands. Or, just drive north to Mukilteo and catch a short ferry over to Whidbey Island.

There are fun events all year in Seattle. But I’m circling February on the calendar for Museum Month. Plus, I need to see that grand staircase from Pike Place Market down to the water!





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Lawmakers and union call on Dunleavy administration to release drafts of state salary study

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Lawmakers and union call on Dunleavy administration to release drafts of state salary study


A key public-sector union and some Democratic state lawmakers are calling on Gov. Mike Dunleavy to release the results of a million-dollar study on how competitive the state’s salaries are. The study was originally due last summer — and lawmakers say that delays will complicate efforts to write the state budget.

It’s no secret that the state of Alaska has struggled to recruit and retain qualified staff for state jobs. An average of 16% of state positions remain unfilled as of November, according to figures obtained by the Anchorage Daily News. That’s about twice the vacancy rate generally thought of as healthy, according to legislative budget analysts.

“The solution, it’s not rocket science,” said Heidi Drygas, the executive director of the union representing a majority of rank-and-file state of Alaska employees, the Alaska State Employees Association/American Federation of State, County and Municipal Employees Local 52. “We have to pay people fairly, and we’re underpaying our state workers right now.”

Drygas says the large number of open jobs has hobbled state services. At one point, half of the state’s payroll processing jobs were unfilled, leading to late and incorrect paychecks for state employees.

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“This is a problem that has been plaguing state government for years, and it is only getting worse,” she said.

Alaskans are feeling the effects, said Sen. Bill Wielechowski, D-Anchorage.

“We’ve been unable to fill prosecutor jobs. We’ve been unable to fill snowplow operator jobs, teaching jobs, of course, on the local level, clerk jobs for the courts, which backs up our court system, and so on and so forth,” Wielechowski said.

So, in 2023, the Legislature put $1 million in the state budget to fund a study looking to determine whether the state’s salaries were adequate. The results were supposed to come in last June.

Wielechowski said he’s been hearing from constituents looking for the study’s findings. He’s asked the Department of Administration to release the study. And so far, he said, he still hasn’t seen it.

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“This has just dragged on, and on, and on, and now we’re seven months later, and we still have nothing,” he said. “They’re refusing to release any documents at all, and that’s very troubling, because this is a critical topic that we need before we go ahead and go into session.”

Dunleavy’s deputy chief of staff emailed the heads of state agencies in early December with an update: The study wasn’t done yet. The governor’s office had reviewed drafts of the study and found them lacking.

They sent the contractor back to the drawing board to incorporate more data: salaries from “additional peer/comparable jurisdictions”, plus recent collective bargaining agreements and a bill that raised some state salaries that passed last spring.

“Potential changes to the State’s classification and pay plans informed by the final study report could substantially impact the State’s budget, and additional due diligence is necessary, especially as we look at the State’s revenue projections,” Deputy Chief of Staff Rachel Bylsma wrote to Dunleavy’s Cabinet on Dec. 6.

Though the final study has not been completed, blogger Dermot Cole filed a public records request for any drafts of the study received to date. But state officials have thus far declined to release them, saying they’re exempt from disclosure requirements under Alaska law.

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“The most recent salary study draft records the state received have been withheld under the Alaska Public Records Act based on executive and deliberative process privileges,” Guy Bell, a special project assistant in the governor’s office who deals with records requests, said in an email to Alaska Public Media. “Any prior drafts that may have been provided are superseded by the most recent drafts, so they no longer meet the definition of a public record.”

To Wielechowski, that’s absurd.

“It’s laughable. It’s wild,” he said. “That’s not how the process works.”

The deliberative process privilege under state law protects some, but not all, documents related to internal decision-making in the executive branch, according to a 1992 opinion from the state attorney general’s office. It’s intended to allow advisors to offer their candid recommendations, according to the opinion.

“The deliberative process privilege extends to communications made in the process of policy-making,” and courts have applied the privilege to “predecisional” and “deliberative” documents, Assistant Attorneys General Jim Cantor and Nancy Meade wrote. However, “courts have held that factual observations and final expressions of policy are not privileged,” they continued.

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Lawmakers are about to get to work on the state budget, and Wielechowski said it’s hard to do that without a sense of how, if at all, state salaries should be adjusted.

“Nobody knows how it’s going to turn out,” he said. “Maybe salaries are high. But it will certainly give us an indication of whether or not this is something we should be looking at as a Legislature.”

Wielechowski sent a letter to the agency handling the study in December asking for any of the drafts that the contractor has handed in so far. He said he’s concerned that the Dunleavy administration may be trying to manipulate the study’s conclusions.

“We didn’t fund a million dollars to get some politically massaged study,” he said.
“We funded a million dollars so that we could get an objective organization (to) go ahead and look at this problem and to tell us what the numbers look like to tell us how competitive we are.”

An ally of the governor, Sen. Mike Shower, R-Wasillia, said he, too, would like to see the results — but he said he sees the value in waiting to see the whole picture.

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“I think that in this particular case, it is important that the administration, or even the legislature or the judicial branch, all of which commission studies, ensure that they are appropriately finished (and) vetted,” Shower said. “Sometimes you don’t get back everything you were looking for.”

Though he’s the incoming Senate minority leader, Shower emphasized that he was speaking only for himself. He said the caucus hasn’t discussed it as a group.

But majority-caucus lawmakers say they’re not interested in waiting. Incoming House State Affairs Committee chair Ashley Carrick, D-Fairbanks, said she plans to take a look at the issue as the session begins.

“I think that there are a lot of questions that are unanswered, and we will be spending the first week of the House State Affairs Committee, in part, addressing the lack of a response from the Department of Administration,” she said.

Drygas, the union leader, sent a letter to her membership on Wednesday asking them to sign a petition calling for the state to release the draft study. It quickly amassed more than a thousand signatures. She said the union is “eagerly awaiting the results,” which she said would provide helpful background for contract negotiations.

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“Our membership is fired up,” she said. “We’re not going to just let this go.”



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Nearly 70 years ago, the world’s first satellite took flight. Three Alaska scientists were among the first North Americans to spot it.

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Nearly 70 years ago, the world’s first satellite took flight. Three Alaska scientists were among the first North Americans to spot it.


On any clear, dark night you can see them, gliding through the sky and reflecting sunlight from the other side of the world. Manmade satellites now orbit our planet by the thousands, and it’s hard to stargaze without seeing one.

The inky black upper atmosphere was less busy 68 years ago, when a few young scientists stepped out of a trailer near Fairbanks to look into the cold October sky. Gazing upward, they saw the moving dot that started it all, the Russian-launched Sputnik 1.

Those Alaskans, working for the Geophysical Institute at the University of Alaska Fairbanks, were the first North American scientists to see the satellite, which was the size and shape of a basketball and, at 180 pounds, weighed about as much as a point guard.

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The Alaska researchers studied radio astronomy at the campus in Fairbanks. They had their own tracking station in a clearing in the forest on the northern portion of university land. This station, set up to study the aurora and other features of the upper atmosphere, enabled the scientists to be ready when a reporter called the institute with news of the Russians’ secret launch of the world’s first manmade satellite.

Within a half-hour of that call, an official with the Naval Research Laboratory in Washington, D.C., called Geophysical Institute Deputy Director C. Gordon Little with radio frequencies that Sputnik emitted.

“The scientists at the Institute poured out of their offices like stirred-up bees,” wrote a reporter for the Farthest North Collegian, the UAF campus newspaper.

Crowded into a trailer full of equipment about a mile north of their offices, the scientists received the radio beep-beep-beep from Sputnik and were able to calculate its orbit. They figured it would be visible in the northwestern sky at about 5 a.m. the next day.

On that morning, three of them stepped outside the trailer to see what Little described as “a bright star-like object moving in a slow, graceful curve across the sky like a very slow shooting star.”

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For the record, scientists may not have been the first Alaskans to see Sputnik. In a 1977 article, the founder of this column, T. Neil Davis, described how his neighbor, Dexter Stegemeyer, said he had seen a strange moving star come up out of the west as he was sitting in his outhouse. Though Stegemeyer didn’t know what he saw until he spoke with Davis, his sighting was a bit earlier than the scientists’.

The New York Times’ Oct. 7, 1957 edition included a front-page headline of “SATELLITE SEEN IN ALASKA,” and Sputnik caused a big fuss all over the country. People wondered about the implications of the Soviet object looping over America every 98 minutes. Within a year, Congress voted to create NASA.

Fears about Sputnik evaporated as three months later the U.S. launched its own satellite, Explorer 1, and eventually took the lead in the race for space.

Almost 70 later, satellites are part of everyday life. The next time you see a satellite streaking through the night sky, remember the first scientist on this continent to see one was standing in Alaska. And the first non-scientist to see a satellite in North America was sitting in Alaska.





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