Heidi Zemach for Seward City News
Former Alaska Governor Bill Sheffield has been traveling across South Central speaking persuasively in support of the Alaska Gasline Development Corporation’s proposed 737-mile “bullet” pipeline that would carry natural gas from the North Slope to Point MacKenzie. It would have multiple take-off points in cities and communities along the way. Sheffield was the featured speaker at the Seward Chamber of Commerce’s business luncheon last Friday as part of a host of speaking engagements that he says are all on his own dime.
“I got into this because we’ve been talking about this thing for the last 30-40 years,” he said. But Alaska hasn’t kept up with its own pipeline infrastructure, he said. “It’s time we started doing something for us, and gas is the answer.”
Sheffield, who served as governor from 1982-86, is well respected by many in the Seward audience for bringing projects—such as the Spring Creek Correctional Center —our way. He also sits on the Alaska Railroad Corporation Board of Directors, and keeps a sport fishing boat in the Seward Small Boat Harbor.
The pipeline is a proposal that its backers say could help supplement Cook Inlet’s dwindling supply of natural gas production in as little as seven years, and provide supplies for electric generation and home heating for the next 100 years. It would carry up to 500 million cubic feet per day of natural gas at a pressure of 1,480 pounds per square-inch, according to Leslye Langla, a spokesperson for AGDC, who visited Seward’s Port & Commerce Advisory Board February 26th to promote the concept.
The proposed 737 mile-long pipeline is one of two natural gas pipeline projects under way, each vying for funding, and the continued support of the state legislature. It would be buried for the majority of the way. The pipeline would require more than 337,000 tons of steel, which could potentially be shipped to the port of Seward, according to AGDC, which will be looking for a year-round, ice-free port with a friendly environment. The pipeline’s construction would bring about an estimated 8,000 new jobs for Alaskans, some of who could be trained at programs offered here at AVTEC, Langla said.
Sheffield gave some even more positive scenarios of the ripple effect such a pipeline might have on the economy:
The relatively cheaper natural gas could help fend off the escalating price of LNG fuel, which it looks as though it will need to be imported to Alaska in the coming years, Sheffield said. As gas production in Cook Inlet has diminished, its price has increased. Higher prices caused the Agrium plant, one of the biggest commercial users of natural gas in Southcentral, to close down in 2007. Dwindling supplies have also slowed liquefied natural gas (LNG) exports to the point where the LNG export facility in Kenai is on the verge of being closed. When Agrium closed, 300-350 jobs were lost, Sheffield said. They were “good jobs,” paying around $80 thousand a year in wages.
“I imagine if we had cheap gas, (Agrium’s owners) would come back from Canada and it would be reopened,” Sheffield said.
With a more plentiful supply of gas, business at Flint Hills Resources’ North Pole Refinery, which processes North Slope crude oil and supplies gasoline, jet fuel, heating oil, diesel, gas oil and asphault to Alaska markets, would return, Sheffield predicted. Flint Hills has three stacks, but is only operating one stack currently, which contributed to the decline in Alaska Railroad traffic and its need to lay off workers.
“If you can get natural gas to the proposed Donlin Gold mine, Donlin will employ 3,000 people to build the mine, and will employ 1,500 workers there a day,” Sheffield said.
Vocational schools like AVTEC will have a big job keeping up with the demand of training people, he added, predicting that Alaska could have full employment if done right.
As the former governor is not being paid by AGDC, or anyone else in industry to speak on behalf of the pipeline, or House Bill 4 the measure that would fund the remaining $327 million for the $400 million pipe line, there are no limitations on what he can or can’t say, he said. But AGDC needs Alaska statesmen like Sheffield on their side, as the other pipeline project backers include the City of Valdez, and former Valdez Mayor Bill Walker, General Counsel and Project Manager for the Alaska Gasline Port Authority. They support the MVP, or maximum volume pipeline, a large-volume gas line from the North Slope to tidewater, and are opposing the AGDC instate pipeline with a costly and pervasive media ad campaign. Their plan is an 800-mile, 48-inch-diameter high-pressure pipeline from Prudhoe Bay to tidewater in Southcentral Alaska, and meanwhile importing alternative supplies such as LNG, and financing a trucking project from the North Slope to Fairbanks. They claim that the proposed AGDC pipeline leaves out half of all Alaskans, and that their own project can be built significantly faster and cheaper than the ASAP line can, and will give them the flexibility to continue pursuing the “correct project for Alaska” providing cheap energy for all Alaskans; and a steady stream of income to help offset declining oil revenues.
Sheffield doesn’t think the ambitious MVP project is the solution, and that therefore AGDC’s natural gas pipeline should be ditched. “Let me tell you why,” he said. “They’re behind.” AGDC has already done a tremendous amount of work with its first $71 million state payment, he said. Its staff have already obtained all the needed state rights-of-way and state land permits, and is awaiting award of federal land permits in the near future. They’ve already done the pipeline engineering too.
The MVP project will cost an estimated $7.7 billion to build, however, Sheffield said. They have not done an Environmental Impact Statement for their pipeline, nor obtained right of way permits. There’s been no engineering done, and unlike the instate pipeline, the fuel it supplies would still have to be further refined.
“And I don’t give a hoot if we ever sell an ounce of gas to Asia from that state pipeline,” Sheffield exclaimed. “I’m just saying we need to stick with the instate gas line. Gas is for Alaska, and oil is for the state budget.”
The state still has plenty of money hidden away in one account or another that can be used to fund the remainder of the pipeline project, he said. But AGDC won’t get there, without wasting time and millions more each year, unless lawmakers pass HB4 this session in order to get the project into “Open Season” by the end of 2014. That’s when the corporation negotiates directly with interested oil companies for a guaranteed supply of gas at a set price over a guaranteed period of time.
The Seward City Council has endorsed HB4.