New governor: go sell that natural gas

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Alaska’s petroleum-rich North Slope contains an approximate 35 trillion cubic feet of proven natural gas reserves, and an estimated 200 trillion cubic feet extra of unproven reserves. This is an astonishingly significant resource, especially as the state struggles with its over-reliance on oil production. But if extracting and transporting natural gas to market is easy, then there wouldn’t need to be an opinion article about it. There is no established infrastructure in place that could practically and safely transport gas on our North Slope to ports on our southern coast. Nothing short of a maximum effort from our new governor will suffice in making this opportunity a reality.

Natural gas is a separate fossil fuel from crude oil. Its chemical composition is primarily simple hydrocarbons such as methane. Although gas is still a fossil fuel, it emits at least 50 percent less carbon dioxide than coal. It also emits less than oil in most uses. Gas is primarily used for heating homes, cooking, boiling water and generating electricity.

Gas production and transportation both require a unique set of techniques and infrastructure, which Alaska does not have in completion. The Trans-Alaska Pipeline was designed for crude oil and cannot be practically repurposed for gas. As such, Gov. Bill Walker focused heavily on trying to build a liquid natural gas pipeline. The LNG pipeline would convert natural gas into liquid form for safe transport from the North Slope to a proposed Nikiski port on the Kenai Peninsula. However, the estimated cost of $34.1 billion or more, 10-year construction time and vocal opposition from environmentalists and anti-Walker Republicans helped stall the project before it could start.

Alaska’s new governor will take office on the first Monday of December. He should immediately resume Walker’s effort on natural gas. The time sensitivity here has more to do with the consumer market for gas than the production and transportation challenges. Gas consumption in China is booming. The Chinese government has been pushing to transition factories and homes from coal to gas in order to cut emissions. Additionally, the purchasing power of middle class Chinese citizens is increasing as well. The dragon is hungry for gas.

Alaskan gas has some powerful competition, though. The Russian Federation has tapped its Siberian riches to extract, refine and deliver gas to China through a pipeline currently under construction. Russia is about to seize the Chinese consumer market before Alaska can sell so much as a propane tank there. It may seem like this is already a lost cause, but Alaska still has a few advantages. Rampant corruption in Russia’s energy sector makes doing business with them incredibly frustrating. If Alaskans can deliver gas to China without shenanigans, then we have a real chance of capturing a portion of the gas consumer market.

The importance of face-to-face negotiation cannot be understated. This is why the burden of selling Alaskan gas falls squarely on the governor’s shoulders. The governor has the authority to represent the State of Alaska in legal, economic or other official functions. Unlike the legislature, his policies and decisions are unilateral so long as they are confined within the powers of the executive prescribed in the Alaska Constitution. Non-state parties, such as the Chinese energy giant Sinopec, only want to negotiate with an Alaskan officer who represents the state as a whole. This is why the function of legislature must be to endorse and support, while the governor focuses on the actual talking and handshaking.

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Securing consumers before actually building the natural gas infrastructure seems counter-intuitive, but it makes sense. The governor will have to attract partnerships with energy corporations to make Alaskan gas a reality, and those corporations only want to pitch in if they know there’s a buyer lined up. The LNG pipeline has the most groundwork already, so the new governor should consider a continuation of that project.

However, the governor may decide that the pipeline is not the right way to do this. That’s fine as long as he doesn’t lose sight of the goal entirely. Alternatives do exist for getting Alaskan gas off the North Slope, each with pros and cons of their own. A railway is cheaper and easier to construct than a pipeline. A train could feasibly transport gas to ports. The risk comes with derailment and spill disasters. Additionally, building a whole new port on the North Slope itself would skip the overland transportation entirely. Gas could be loaded onto barges and shipped down through the Bering Strait. This method would only be available during the low-ice summer, but climate change is expected to increase the duration of the low-ice season. The new governor is free to judge each option on its merits, but he shouldn’t give up on it entirely.

Alaska is a producer state. We do not have the population necessary to be significant consumers. Our governor should always be looking for ways to maximize our ability to sell to consumers abroad. The notion that Alaska can consume all of its own resources and still be prosperous is absurd. Selling abroad is what we do. Specifically, it is what the governor must do.

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