Mayor Charlie Pierce speaks at a Kenai Peninsula Borough meeting on Tuesday, Jan. 8, 2019. (Photo by Brian Mazurek/Peninsula Clarion)

Mayor Charlie Pierce speaks at a Kenai Peninsula Borough meeting on Tuesday, Jan. 8, 2019. (Photo by Brian Mazurek/Peninsula Clarion)

Borough Mayor Charlie Pierce casts doubt on LNG project

Pierce said that the mayor’s office is still looking through all the impacts to the Kenai Peninsula

Kenai Peninsula Borough Mayor Charlie Pierce joins an Alaska energy expert in casting doubt on the proposed Nikiski LNG pipeline.

At Friday’s Seward Chamber of Commerce meeting, Pierce said he agreed with Larry Persily, former federal official for Alaska gas pipeline projects and chief of staff for former borough mayor Mike Navarre, who said last week that there is “no possible way” that the Alaska Gasline Development Corporation would make a final investment decision by the end of 2019.

“I think Persily is right,” Pierce said. “When you look at the LNG project coming to the peninsula, standing on its own on an economic basis … There is no return on investment at this present time.”

At a Kenai/Soldotna Chamber Luncheon last week, Persily argued that a lack of customers, investors and capital will keep the Alaska LNG Pipeline from becoming a reality. He also said an increase in competition and decreased demand from China will hinder the project.

Competition is heightened by Alaska’s high investment costs. Different markets throughout the world are able to offer incentives or are nearby larger natural gas supplies, while Alaska has higher prices and smaller reserves. Persily pointed to examples from across the world, like Qatar or the continental U.S.’s Gulf Coast, of other LNG projects already underway or due to be started soon that have either higher profit margins or are more worthwhile to investors than the one proposed for Nikiski.

Pierce said he recognizes the competition and how it will hinder the Kenai Peninsula’s chances of seeing the LNG project come to fruition.

“They’re already in the marketplace with tankers full of gas headed to the customer and we’re still haggling over our strand of gas on the North Slope and how to build infrastructure, who is going to pay for it and how the agreements are going to be written,” Pierce said.

Despite the complex outlook, Pierce said that the mayor’s office is still looking through all the impacts to the Kenai Peninsula and thinks that the project could be saved.

“We’re in the (Federal Energy Regulatory Commission) process, we’ve intervened, we have a place at the table,” he said.

Reach Kat Sorensen at ksorensen@peninsulaclarion.com.

More in News

Alaska State Troopers logo.
Anchor Point house fire leaves one dead, one in serious condition

The cause of the fire is under investigation.

Snow and debris from an avalanche can be seen near Mile 45 on the Seward Highway on Monday, March 29, 2021. (Photo courtesy Goldie Shealy)
Center promotes avalanche awareness

The Chugach Avalanche Center in Girdwood will begin its daily forecasts Saturday.

Commercial fishing and other boats are moored in the Homer Harbor in this file photo. (Photo by Michael Armstrong/Homer News)
Seawatch: Historic sockeye run predicted for Bristol Bay

ADF&G says 2022 run could break this year’s record

The entrance to the Mendenhall Glacier Recreation Area in the Tongass National Forest was covered in snow on Friday, Nov. 19, 2021, a day after federal authorities announced the next step in restoring the 2001 Roadless Rule on the forest. (Peter Segall / Juneau Empire)
Feds put freeze on Roadless Rule rollback

On the Roadless Rule again.

tease
Alaska man pleads not guilty to threatening 2 US senators

If convicted, he could face a maximum sentence of 50 years in prison.

Commercial fishing vessels are seen here on the Kenai River on July 10, 2020. (Photo by Brian Mazurek/Peninsula Clarion)
Fishing industry takes a hit during pandemic

Overall fish harvesting jobs in Alaska dropped by the widest margin since 2000 — 14.1% — in 2020.

FILE - The Olympic rings stand atop a sign at the entrance to the Squaw Valley Ski Resort in Olympic Valley, Calif., on July 8, 2020. U.S. Interior Secretary Deb Haaland on Friday, Nov. 19, 2021, declared "squaw" to be a derogatory term and said she is taking steps to remove the term from federal government use and to replace other derogatory place names. The popular California ski resort changed its name to Palisades Tahoe earlier this year. (AP Photo/Haven Daley, File)
Interior secretary seeks to rid U.S. of derogatory place names

ALBUQUERQUE, N.M. — U.S. Interior Secretary Deb Haaland on Friday formally declared… Continue reading

Most Read