Borough calls AGDC’s evaluation of Port MacKenizie woefully inadequate

The Matanuska-Susitna Borough has fired back at a state-owned natural gas corporation over its evaluation of the borough’s Port MacKenzie port for a large liquefied natural gas plant for the proposed $43 billion-plus Alaska LNG Project.

The borough called the evaluation woefully inadequate.

Alaska Gasline Development Corp., or AGDC, had selected Nikiski, on the Kenai Peninsula, as its preferred site for the large LNG plant and terminus of an 800-mile 42-inch gas pipeline built from the North Slope.

AGDC initially considered the wrong location in the Mat-Su for its alternative plant site analysis, confusing Point MacKenzie, a geographic feature, with the borough’s existing Port MacKenzie.

The borough asked AGDC to correct the error, which it did not do, and then filed a protest with the U.S. Federal Energy Regulatory Commission, the agency considering an application for a certificate to build the Alaska LNG Project.

FERC ordered AGDC to do a formal evaluation of the Mat-Su location and to consult with the borough, but the evaluation the state corporation did to comply with the order made factual errors and did not consider or even mention a superior site the borough identified that would avoid environmental impacts to wetlands.

In its response to the FERC order the AGDC analyzed two other locations at Port MacKenzie which would have exacerbated environmental impacts, the borough said in a response to FERC filed Friday, September 14.

“The Matanuska-Susitna Borough’s Optimum Site includes 1,048 acres, avoids wetlands, uses the existing barge docks and barge trestle system, and meets the project’s purpose and needs. With this site and with accurate and reliable data, it appears that Port MacKenzie has significantly fewer environmental impacts than portrayed by AGDC in its data response,” the borough said in its filing.

“The financial analysis shown in Attachment B-2 (to the Mat-Su response) reports that with a shorter gas pipeline and related items, even with the cost of an additional ship and related operating costs, there is a potential estimated annual savings of $103,511,800. Over 20 years, there is a potential estimated savings of $2,070,236,000,” to the Alaska LNG Project.

A gas pipeline built to Port MacKenzie would be 55 miles shorter than a pipeline built to Nikiski and would not have to be built across Cook Inlet to the Kenai Peninsula, Mat-Su said its filing on Friday. Also, an LNG loading facility at Port MacKenzie would be 960 feet shorter than one needed at Nikiski, creating other savings, the borough said.

The pipeline would also be built nearer to the Mat-Su’s populated communities, which would lower the cost of natural gas provided through the system. In contrast, the present AGDC plan has the pipeline further west, near the Susitna River, which means a lateral spur line would be needed to move gas to Mat-Su’s populated areas in any significant quantities, raising the cost of local gas supply.

The borough said AGDC had not accurately analyzed the proposals put forth by Mat-Su on an optimal location and did not participate in any meaningful consultation with the borough in responding to FERC’s request. “AGDC’s response contains numerous factual errors and willfully misleading statements which reflect an inaccurate analysis of the options available at Port MacKenzie for AGDC’s proposed liquefaction facility,” the borough’s response said.

“FERC must not proceed with its review of AGDC’s application until AGDC has presented a complete and accurate analysis of Port MacKenzie as an alternative site of the Alaska LNG liquefaction facility,” the borough said.

Mat-Su’s filings carry weight in the FERC proceeding because the borough has been granted status as an intervenor, which gives it a formal role. On the other hand, the Kenai Peninsula Borough has also been granted intervenor status, which puts that municipality at the table arguing for the Nikiski site.

“Despite six years of communications, AGDC has not provided a rational basis for excluding Port MacKenzie as a feasible or preferred alternative for the site of the Alaska LNG liquefaction facility. In fact, despite FERC’s explicit request, AGDC still has not performed a good faith and unbiased analysis of Port MacKenzie,” the borough said in its filing.

“AGDC’s continued delay in providing accurate information to the Commission regarding Port MacKenzie serves no purpose but to further delay the final Environmental Impact Statement in this (FERC) docket,” the Mat-Su Borough said in its filing on Friday.

In its filing the borough pointed errors in the AGDC response to FERC including claims that “railroad” customers would be diverted by the LNG plant siting. There is, as yet, no railroad to the port and no customers, although there are hopes to someday complete a planned rail spur to the location. ADGC also said two potential LNG plant sites it analyzed could create wetlands impacts. However, the corporation failed to consider a different site proposed the borough which would cause no effects on wetlands.

The borough also said AGDC erred with a claim that the borough’s existing barge trestle dock would have to be dismantled to make room for an LNG loading facility, and the removal would create environmental impacts. In reality the present loading facilities would not have to be removed, the borough said.

Finally, AGDC’s claims of marine navigation problems caused by ice and the Knik Arm shoal are overblown, the borough said. Silting on the shoal can be alleviated with dredging, which the U.S. Army Corps of Engineers does routinely every year to support ship traffic to the Port of Anchorage.

Also, no “ice management structures” are needed in Knik Arm, as claimed by AGDC. No such structures were needed to support vessel traffic to the current Port MacKenzie site, the borough said.

Mat-Su Borough manager John Moosey said he feels let down by AGDC’s position. “They (AGDC) told us they would take an honest look at it, but then they failed to do so,” in the corporation’s 22-page response to the FERC request.

“What bothers us is that this is a state corporation that appears to be looking out only for the interests of Nikiski,” and not other communities of the state, Moosey said. Also, why would AGDC have to use deceptive comments? They must lack confidence in Nikiski themselves if they have to resort to practices like this,” he said.

However, Mat-Su is still pleased that FERC has been open to allowing the review. “We do appreciate the process, and that we were given an opportunity to speak,” Moosey said.