Dunleavy’s gas pipeline private sector dream would be funded by the feds

The Alaska Gasline Development Corporation has finally posted information about the gas pipeline project that Gov. Mike Dunleavy says is “closer than ever.”

Dunleavy announced the idea in his State of the State speech and followed it up with a press release that Alaska newspapers printed with no questions asked.

A rough outline has emerged in a slide presentation that AGDC has posted in advance of a board meeting Thursday at 9 a.m. This project is a longshot.

AGDC has contracted with lobbying and law firms employing former Gov. Sean Parnell and former Sen. Mark Begich to push the project.

Parnell, under contract since last spring is charging the “discounted rate” of $450 an hour. Begich is with a group getting $12,500 a month. The state should have revealed these contracts months ago.

What is missing is a clear statement from Dunleavy about how much of a state subsidy he supports and how he intends to get the Legislature to go along. Dunleavy has shown no sign of commitment.

It appears that AGDC and the Dunleavy administration are trying to get the Biden administration to make a major investment to subsidize the $5.9 billion project, claiming it is a way to fight climate change, help “vulnerable rural populations” and support the military.

The federal subsidy would be “key to attract outside investment.”

The pipeline would create 1,400 “high-paying direct jobs” and 20,000 or more indirect jobs, getting gas to Fairbanks in 2025.

AGDC is portraying the pipeline to Fairbanks as the first phase of the much larger Alaska LNG project to tidewater. That is the logic under which the agency is going to try to say that it is not a separate project from the one that has been studied and reviewed for various permits.

The money to build the project has not been lined up. One argument the state plans to make is that the power plants at Fort Wainwright and other installations can be switched to natural gas from coal.

“Attracting stimulus and private funding in the near future for the initial phase of the Alaska LNG project will quickly revitalize Alaska,” one slide says.

The way to make the case for a federal subsidy is to start with a state subsidy. Otherwise, statements such as these from AGDC are hollow: “Alaska has an energy infrastructure project that can immediately ignite our economy, put thousands of Alaskans back to work, clean our air, improve health, and reduce energy bills.”

The plan would be to build a 42-inch pipeline from the North Slope to outside Fairbanks, connecting to Fairbanks with a “lateral” pipeline.

“The private sector would build, own and operate” the pipeline, the state says.

The project envisions a state subsidy of some sort, as AGDC says the “owner builder operator” would “receive minimum return ahead of any state payback.”

The project is founded on the dream of attracting support and major backing from the Biden administration, which seems unlikely. If there is any chance of selling the idea that a federal subsidy is in order, Dunleavy’s campaign that Biden and others are trying to destroy Alaska is going to destroy the chance for success.

The AGDC says it has already hired the law firms Brownstein Hyatt Farber Schreck and Holland & Hart to lobby Congress and the federal government and “assist with communications.”

The flawed rollout of this plan shows a need for better communication with Alaskans.

Former Gov. Sean Parnell works at Holland & Hart. Former Sen. Mark Begich is a “strategic consulting advisor” at Brownstein Hyatt Farber Schreck.

The private firms will work with “Congressional committee leadership, president-elect transition teams, and support organizations.”

Biden is no longer president-elect.

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