Reporting From Alaska

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Draft report of Dunleavy energy task force champions bullet line, as expected

The latest draft report from the Dunleavy energy task force makes a stronger pitch for subsidizing our old friend—the gas pipeline—and injects the phrase “regret cost” into the debate about importing LNG to Alaska.

Here is the Oct. 20 draft report, which is 12 pages longer than the Oct. 3 edition.

In a 142-page document there is a little bit of everything, from the Susitna dam to micronuclear power plants. Climate change is mentioned once.

The text is more emphatic and expansive about the gas pipeline than the earlier draft. Critics will say that the draft points to a bullet line task force, which is no surprise. Enstar needs natural gas to survive as a utility and will be the bullet line champion.

The task force subcommittee dealing with this includes Enstar CEO John Sims and two former Enstar employees, Curtis Thayer and Tony Izzo.

“Assuming natural gas remains the space heating fuel of choice on the Railbelt, the largest distributor for natural gas for space heating on the Railbelt (Enstar) projects no decline in demand over the next 20 years,” the report says.

The energy task force is to hold a public hearing Tuesday from 5 p.m. to 6 p.m. Here are the meeting details.

The first choice for all gas line proponents, especially those who say the stars are aligned, is the major export line that would cost more than $40 billion and be paid for by big companies in Asia or elsewhere signing longterm contracts to buy energy. If that project is never built, the $8 billion or $10 billion pipeline to Southcentral would be the fallback plan, one that would require a giant subsidy of $7 billion or so.

When the term “bullet line” first was used in ancient gas line history, it was a reference to a gas pipeline that would run directly from Alaska to the Lower 48, with its contents speeding like a bullet, with no access to its energy in Canada. Before long, it became one of the terms of choice for a gasline focused on instate needs.

The task force appears to have abandoned the dream of Gov. Mike Dunleavy who wanted a finished report by the end of the year that would show how to reduce the cost of power in Alaska to 10 cents a kilowatt hour by 2030, a vision he said would require bold thinking comparable to the Apollo project to send people to the moon.

Dunleavy asked the task force members to believe in 10-cent power and figure out how to pull off a moonshot. The draft report offers no hope for 10-cent power by 2030. If there is a plan for a moonshot, it’s in the form of a gas pipeline.

Look for increased costs in the short-term, the report says, because of the need to import natural gas and pipeline uncertainties.

“In the next two years, parallel path three options to minimize regret cost of short term LNG import and enable timely decision making,” the draft report says.

First, try to get the big Alaska LNG export pipeline built. Second, “Complete project development for the Bullet Line project to make a go-no-go decision on this option.”

And third, “complete robust analysis of alternative sources for heat and base load power.”

The third option will be regarded by supporters of alternative energy as a means of placating those who don’t see a gas line of any kind in our future.

With a bullet line subsidy of $7 billion or more, gas supplies in Cook Inlet would be priced at about what they are now. The report does not examine what other ways that $7 billion could be used to benefit Alaskans.

“Without taking action now to progress projects to a decision making point, there is a significant risk that near term importation of natural gas will become the long term default solution,” the report says.

Importing natural gas for the long term “would be contrary to the goals of energy security over the long term.”