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Alaska Governor Ready to ‘Unlock’ North Slope Natural Gas to Strengthen Energy Supplies
Alaska Gov. Mike Dunleavy sees the state’s future connected to its role as a global energy supplier, which means utilizing more natural gas resources and developing LNG exports to Asia, he said during the annual State of the State address.
The Republican governor, who is beginning his second term, said he intended to build on Alaska’s position as a leading producer of oil, natural gas and minerals. However, the state’s future, he said, is also dependent on its emergence “as the global leader in new forms of low- and no-carbon energy.”
“We’ll unlock our stranded North Slope gas to power Alaska, to supply our Asian allies, and to produce zero carbon energy in the form of hydrogen and ammonia,” he said.
At the heart of the plan to become a hub of liquefied natural gas exports is the Alaska LNG project, which has been in development for more than a decade. If completed, the project would consist of a pipeline spanning from the northern shores of the state into the Kenai Peninsula, where gas would be liquefied at a facility in Nikiski.
The 20 million metric tons/year capacity project has had the greenlight from the Federal Energy Regulatory Commission since 2020. The estimated $39 billion project is still unsanctioned. State-owned Alaska Gasline Development Corp. (AGDC) took over as sponsor in 2016 after affiliates of BP plc, ConocoPhillips and ExxonMobil dropped out. The three mega producers were also involved in a multi-decade LNG plan with TransCanada Corp. that was ultimately scrapped in 2014.
LNG was exported to Japan from Kenai for more than 40 years from a terminal last operated by ConocoPhillips before the terminal was closed in 2015. LNG buyers in Asia have been looking for additional, stable sources of fuel after western sanctions threatened supplies from Russia.
Dunleavy said Alaska could be a part of the solution for both energy security and decarbonization in Asia. He said that Alaska operators adopted social and governance (ESG) policies “before ESG was the latest fashionable thing on Wall Street or in Washington.
“We don’t flare our gas, and never have, and we don’t have to be told not to by the federal government,” Dunleavy said.
The Alaska Oil and Gas Conservation Act, created in 1955, prohibits the waste of oil and natural gas during exploration and production, including most venting and flaring activities.
In a draft environmental impact statement from the Department of Energy (DOE), researchers reported Alaskan LNG exports could have less lifetime emissions than Gulf Coast operations. Researchers pointed to the North Slope’s lower carbon concentrations and the fact that around 75% of gas from the region comes from associated drilling of oil wells.
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Alaska LNG’s developers are exploring additional avenues to make its LNG cargoes more attractive to Asian customers looking to meet climate goals. Hilcorp Alaska, one of the largest producers in the state, and two Japanese firms are studying carbon capture and low-carbon ammonia production and export in Alaska using Alaska LNG as a possible launching point.
Alaskan officials have also integrated Alaska LNG into plans to grow hydrogen production in the region, according to its application to the DOE for federal funds. Last October, Alaskan and State Department officials met with firms in Japan to discuss LNG and other alternative fuel projects in a meeting led by U.S. Ambassador to Japan Rahm Emanuel.
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