Alaskans, listen up. This is going to be more about us today.

The Alaska state legislature is currently being bullied by our governor to pass his version of a no-tax natural gas pipeline.*

In fact, as Andrew Halcro so eloquently expresses on his “With All Due Respect” podcast (which you should follow if you want the skinny on Alaska politics), if the legislature passes the governor’s proposal as is, the state of Alaska could be on the hook for any expenses incurred whether they build the pipeline or not. Goody.

Last week I wrote to one of my representatives as follows:

This pipeline is never going to get built because everyone is always so concerned with it paying for itself and the only way to do that is to sell the gas abroad, only it won’t pay for itself because the price per cubic foot is not and never will be high enough to make a profit. So stop looking at it like a for profit commodity and start looking at it like a utility that would keep Alaskans warm through the winters to come. One line from Prudhoe to Fairbanks and feeder lines running to as many communities as possible from there. There’s an idea we could all get behind.

If nothing else I have to admire the work ethic of the state legislature because they sure are trying to make economic sense out of the governor’s proposal, which for anyone with the ability to multiply must be difficult. So I was delighted to see two recent opeds in the Anchorage Daily News affirming my viewpoint. Both were written by people better informed than I am, so I feel so smart now.

On July 7th:

The future value of natural gas will depend on competing global projects. A map of the world’s gas fields shows enormous gas reserves at tidewater. For example, in northwest Australia, a massive new gas field is about to come online. This field does not have the economic burden of an 800-mile pipeline and already has infrastructure in place. Another look at the globe shows that this field is much closer to Asian markets than Alaska. Australia is as politically stable as the U.S., so they are a premium gas supplier. This is what we are competing against, and Alaska cannot.

Stated in the hearing was that if we don’t build this pipeline, we get nothing. Not true at all. Alaska has alternatives. One that has been looked at in the past, and was called for as recently as 2023 by Enstar, is for Alaska to build and own a smaller gas line for in-state use. In the past, this idea was sidelined because Cook Inlet gas was cheap and plentiful. No more. Cook Inlet gas is running out, and we need warm, lighted homes.

Read the whole piece here or here.

Then yesterday (July 11th):

The “Build the Line” marketing craze that is currently sweeping Alaska, as a way to pressure legislators into passing the tax relief, aims to conflate reducing taxes with actual construction of the project. The proper response should be, “Build it with what?”

There is absolutely no evidence of any entity willing to finance the Alaska LNG project. And this makes perfect sense. Because of the conditioning and pipeline costs, Alaska LNG would cost consumers in Asia upward of $25 billion more than gas from competing supplies.

Yes, there are memorandums of understanding agreeing to look at it. There are manufacturers willing to provide steel and ships if somebody buys them. There are agreements to provide union labor if the workers get paid. There are oil and gas field service companies ready to capitalize if it is bankrolled by someone else. But no one has said they are willing either to finance or buy Alaska’s overpriced gas. This has been the problem for almost 50 years. Tax relief does nearly nothing to ameliorate this.

Read the whole piece here or here.

If as an Alaska voter you’re going to support this, forgive me, pipe dream, at least educate yourself as to all of its ramifications. I speak as a born-and-bred Alaskan of 74 years in that during all of my life I have watched carpetbaggers descend on this state to grab as much as they can and head south afterwards with our money stuffed in their pockets. This whole thing looks pretty damn familiar to me.

*I do have some minuscule street cred on the topic of an Alaska gas pipeline as I worked six years for BP on the North Slope and before that for Alyeska at Galbraith Lake Pipeline Camp.

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In keeping with the all about Alaska theme of this post, on NPR this morning I heard the author of this book interviewed.

Listen to the interview here. Sounds like a must for every Alaskan reader.

Quote for the day

This is my favorite Jay Hammond quote when asked how he would tax the oil companies as governor, he replied: “For every cent we could possibly get. After all, just as it is the obligation of oil company CEOs to maximize benefits for their shareholders, so it is the obligation of the state’s CEO to do the same for his.” —Sandy Harper

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Outro…

Chatter Lagniappe Sunday alaska lng pipeline andrew halcro bob butera dan billman Hobo Jim Jay Hammond rebecca wright stevens roger marks sisters of the midnight sun with all due respect