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Alaska politicians remain optimistic about AK LNG even as overseas market cools

by Clarence Jones

The Alaska Liquefied Natural Gas (LNG) project has long been a topic of discussion and debate. The project aims to bring natural gas from Alaska’s North Slope down an 800-mile pipeline to Nikiski, where it would be liquefied and then shipped to Japan and South Korea. While versions of the project have been considered for decades, progress has been slow due to the project’s significant price tag.

Alaska officials have been touting the project as a way for Asian allies to reduce their reliance on Russian natural gas. However, a recent Wall Street Journal article, which reported that potential buyers aren’t interested, has raised doubts about the project’s viability. Despite this, prominent Alaska politicians, such as U.S. Sen. Lisa Murkowski, remain optimistic about the project’s potential.

In May, Alaska Governor Mike Dunleavy brought energy leaders together in Anchorage to discuss the project. U.S. ambassador to Japan Rahm Emmanuel highlighted the project’s potential to provide energy stability in Asia and create jobs in Alaska. The state’s senators, Murkowski and Dan Sullivan, also expressed their support, citing Alaska’s strategic advantage in exporting gas to East Asia.

The project gained momentum in 2022 when Russia invaded Ukraine, creating an opportunity for Alaska to step into the void left by Russian LNG. Kenai Peninsula Borough Mayor Peter Micciche expressed confidence in the project after a meeting with the Alaska Gasline Development Corporation. He viewed the shift in energy supplies to Western Europe as an opening for the AK LNG project, which would benefit the entire Kenai Peninsula.

The project’s mission includes meeting Alaska’s energy needs while exporting the majority of the LNG. However, the project has faced pushback from environmental groups across the country. The Sierra Club recently sued the federal government, arguing that the Biden administration failed to fully consider the climate and environmental impacts of the pipeline.

According to Wall Street Journal reporter River Davis, Japanese and Korean buyers have shown ambivalence toward the project. They perceive the project as having made little progress despite its long history, leading them to explore other options from within the U.S. and abroad. Davis noted that there seems to be a divide in information between Asia and Alaska regarding the level of interest in the project.

Retired state petroleum economist Roger Marks has long been skeptical about the project’s feasibility. He believes Alaska faces a challenge due to the high upfront infrastructure costs and the availability of cheaper gas from other sources. Marks suggests that the optimism surrounding the AK LNG project may lead to wasted funds and unrealistic expectations among Alaskans.

In conclusion, while the Alaska Liquefied Natural Gas project holds potential for energy exports and economic growth in Alaska, it faces skepticism and challenges. The project’s high cost, slow progress, and competition from alternative gas sources have raised doubts about its viability. Environmental concerns and information gaps have also contributed to uncertainty about the project’s future. Only time will tell if the AK LNG project can overcome these hurdles and become a reality.

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