Alaska: LNG project advancement raises question of pipeline coordinator’s role

On Wednesday, the U.S. Department of Energy launched a 60-day public comment period on the state’s application to export liquefied natural gas. (Al Grillo / AP)
On Wednesday, the U.S. Department of Energy launched a 60-day public comment period on the state’s application to export liquefied natural gas. (Al Grillo / AP)
With the federal environmental review process recently launched for a massive Alaska liquefied natural gas project, the federal gas pipeline coordinator’s office is looking for direction from the White House on whether its mission will change.

The coordinator’s office was created 10 years ago to bring together federal permitting agencies and other organizations to expedite a pipeline project from the North Slope through Canada to the Lower 48. But changing market conditions three years ago led to a new project targeting Asian markets.

The shifting direction meant there was no longer a project for the office to expedite. So federal coordinator Larry Persily whittled down the staff and focused primarily on providing the public with information related to the complex industry, ever-changing market conditions and the new proposal.

That new effort — to liquefy the North Slope’s natural gas and send it overseas in tankers — has not yet caught up to where the old project left off, when ExxonMobil and pipeline builder TransCanada in early 2012 filed numerous environmental reports with the Federal Energy Regulatory Commission, the agency that authorizes construction and operation.

Public comment period

Still, the new project, estimated at $45 billion to more than $65 billion, is moving ahead. On Wednesday, the U.S. Department of Energy launched a 60-day public comment period on the state’s application to export liquefied natural gas. FERC also announced last week it was launching the long review process under the National Environmental Policy Act.

The project participants include TransCanada and the natural gas owners: The state, Exxon, BP and ConocoPhillips. The partners have entered a preliminary phase expected to end in early 2016 that involves the gathering of design and engineering data useful for environmental reports.

FERC has also selected Minneapolis-based Natural Resource Group as the third-party contractor that will write an environmental impact statement for the project. A draft statement is three years away, according to an Alaska LNG project timeline.

Now that the environmental review process has begun, that forces the question of whether the coordinator’s office should have coordinating authority with the new project that’s targeting overseas markets, said Persily.

“The cleaner answer would have been if Congress had changed the law, but that won’t happen,” he said, with Congress preoccupied with other issues.

Instead, the White House will have to make the call. Persily said he has met with officials recently seeking an expansion of authority.

The office, which has shrunk to four employees from the 11 who were working on the last project when Persily arrived in 2010, has enough money to last through Jan. 1, he said. It can continue to focus on providing information until its direction changes.

“Hopefully, we’ll get a decision soon,” he said.

Contact Alex DeMarban at alex@alaskadispatch.com or on Google+

Related stories from around the North:

Canada: Oil and gas consultations in Canada’s eastern Arctic next week, CBC News

Greenland: Statoil awarded exploration licence off Greenland, Eye on the Arctic

Norway: Oil, Industry and Arctic Sustainability, Deutsche Welle’s Ice-Blog

Russia:  Russia sees Wrangel Island oil and gas potential; Greenpeace eyes an eastern Arctic front, Alaska Dispatch

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