Federal Energy Regulatory Commission

The Federal Energy Regulatory Commission has published the final Environmental Impact Statement for the Alaska LNG project, a major step forward in regulatory approvals for the big project. The Environmental Impact Statement issued March 6 analyzes the project’s environmental impacts and associated mitigation measures. The EIS is a mandatory step towards gaining the principal federal approval, or final order, required to construct and operate the project. FERC is scheduled to issue its final order for Alaska LNG in June. While the regulatory issues appear to be in hand the market outlook in Asia, the intended market for liquefied natural gas from Alaska, appears bleak. That means no buyers or investors in the $40 billion-plus project are likely to appear in the near future.

However, achieving the FERC approval is an accomplishment. The EIS and final FERC order, when it comes, will be good for a number of years and if markets change and buyers appear the project will be “shovel-ready.”

The engineering and geotechnical work done by AGC and North Slope gas owners to prepare the EIS remains a key asset that is now owned by the state of Alaska through an independent corporation, the Alaska Gas Development Corp., or AGDC.

Another key asset is the approved rights-of-way across federal and state lands for an 800-mile natural gas pipeline that is now held by AGDC. If there were another gas project, such as a small-diameter gas line from the North Slope to Interior Alaska to supply regional energy needs, having the right-of-way and soils and engineering data for the northern part of the pipeline would be useful.

“The final EIS is a milestone in the Alaska LNG permitting process – a process still with significant hurdles,” Gov. Mike Dunleavy said in a statement.

“I appreciate the diligence of the AGDC team throughout this process. We look forward to reviewing the EIS and receiving the record of decision from FERC, at which point we will evaluate our next steps,” the governor said.

FERC licensure is an important component in determining if Alaska LNG, which Duleavy said must be led by private enterprise, can be developed.

AGDC President Frank Richards said, “This EIS represents substantial progress. The EIS reflects six years of public input, engineering, science-based environmental research, and cultural resource studies.”

The EIS assesses more than 150,000 pages of data and makes Alaska LNG one of the most scrutinized energy infrastructure projects in Alaska, Richards said.

The state and North Slope producers BP, ConocoPhillips and ExxonMobil have $800 million, or more, invested in the Alaska LNG Project to date. Six hundred million dollars were spent by the companies by the companies and the state to do a preliminary Front End Engineering and Design for the project, and the three North Slope producers had spent $150 million earlier in doing a conceptual engineering study. The state, through AGDC, has spent additional money to get the EIS completed,

“Such a rigorous, comprehensive environmental analysis provides assurance that the merits and impacts of Alaska LNG have been carefully vetted by numerous federal regulatory authorities,” Richards said.

“ExxonMobil and BP have contributed valuable expertise and financial assistance which helped make this accomplishment possible. Both organizations continue to provide critical support in the effort to progress Alaska LNG,” he said,

“In the coming days we will review the conclusions in the EIS, examine any differences with the draft EIS published last year, and use these conclusions to help inform decisions about the next steps for Alaska LNG,” Richards said.

More information about Alaska LNG, the EIS, and the permitting process for the project can be found at Alaska-LNG.com.

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