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Sierra Club Takes Swing at Alaska's LNG Project

Alaska's project to commercialize stranded natural gas on the North Slope with a new pipeline and liquefied natural gas (LNG) terminal is drawing criticism from the Sierra Club. It claims the project "...will cause extensive environmental harm..." and likely increase global greenhouse gas emissions, arguments it's made against other LNG projects.

Sierra Club makes its claims in a motion to intervene in Alaska LNG Project LLC's review at the U.S. Department of Energy's (DOE) Office of Fossil Energy (FE) [No. 14-96-LNG]. Project participants are the Alaska Gasline Development Corp. and affiliates of TransCanada Corp., BP plc, ConocoPhillips, and ExxonMobil Corp. The parties recently signed a commercial agreement for the project (see Daily GPI, July 3), which is currently in the pre-front-end engineering and design phase with completion expected in 2016. They applied to DOE for export authorization in July (see Daily GPIJuly 21).

The proposed facilities include a liquefaction plant and terminal in the Nikiski area on the Kenai Peninsula; an 800-mile, 42-inch diameter pipeline; up to eight compression stations; at least five offtake points for in-state gas delivery; and a gas treatment plant to be located on the North Slope (see Daily GPI, May 7).

"The proposal will cause many types of significant environmental harm, and these harms must be considered as part of DOE/FE's public interest analysis," Sierra Club said.

Local water quality, habitats and air quality will be impacted by the project, Sierra Club said. Further, the project would induce more natural gas production in the United states, "...causing the myriad environmental harms associated with such production," Sierra Club said. Additionally, exported LNG would compete against less-polluting sources of energy such as wind and solar as well as against conservation, according to the group.

Sierra Club has argued against exports of LNG from the Lower 48 on similar grounds. DOE and the Federal Energy Regulatory Commission have said in response to previous challenges that they are not charged to consider the impacts of any natural gas production that is induced by export demand (see Daily GPIJuly 31).

Particular to the Alaska project, Sierra Club takes issue with remarks last year by DOE Secretary Ernest Moniz. He was reported to have said that since North Slope gas production is not connected to the Lower 48 pipeline grid, "public interest" is not an issue for DOE to consider in its review of the project.

"Although Alaska's isolation from the pipeline network may simplify analysis of the economic impacts on the public interest, this fact does not limit DOE's obligation to consider environmental impacts on the public interest," Sierra Club said.

Weighing in to support the project with a separate filing was the National Association of Manufacturers. "The Alaska LNG Project has the potential to unlock the vast natural gas resources on the North Slope of Alaska, creating jobs and providing ample natural gas to industrial and residential consumers in Alaska while creating opportunities for LNG exports," the trade group said.

"The Alaska LNG Project will cost $45 to $65 billion and take up to 12 years to construct, providing direct economic benefits to Alaska in the form of 15,000 new construction jobs and 1,000 permanent jobs, decades worth of domestically-produced natural gas for homes, manufacturers, and businesses in Alaska, and new opportunities across the manufacturing supply chain."

As of Wednesday, the Alaska project had garnered 30 comment/protest/intervention filings at DOE.

During midterm elections the project lost a friend with the defeat of Gov. Sean Parnell, a Republican. He lost to independent challenger Bill Walker, who ran with Byron Mallott, who is to become lieutenant governor. Walker has been a critic of the Alaska LNG project, claiming the state and producers have been too secretive about the terms of their arrangement. He has also called for the state to have a larger stake in the project.

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