Parnell: Gas imports are ‘last resort’

Where Southcentral will get its energy in the near future was up for debate between the Anchorage mayor and the governor at the Resource Development Council’s annual conference.

“Everyone needs affordable energy,” said Anchorage Mayor Dan Sullivan during his opening remarks Nov. 14, and added it was almost a given that Southcentral would be importing natural gas in the near future to bridge supply shortages projected for the 2014-15 winter.

Speaking a few minutes later during the same opening session, Gov. Sean Parnell disagreed.

“Mayor Sullivan, importing gas, I don’t think so,” Parnell said. “We have got to do better than that. And I will work my tail off, to make sure that we don’t have to do that. My hope is that these incentives will work in Cook Inlet so that’s not necessary. Not when our resources here are so vast.

“Importing has got to be a last option, or a last resort.”

Southcentral utilities told the Regulatory Commission of Alaska in October that they’ve reached the time to explore the last resort option of importing either liquefied natural gas or compressed natural gas. Natural gas heats many Southcentral homes, and fuels power plants throughout the region. 

But a shortfall is predicted for 2014 without a major new source of gas coming online before then. And such a source is unlikely, given lead times for development and the fact that any in-state pipeline project would not be finished by then.

But Parnell said that other oil and gas projects have been aided by incentives and the state’s role in litigation, and he’d like to see another option move forward.

Companies are now working on production facilities, gravel pads and roads to support Point Thomson development, he said. That work will act as the lynchpin for the commercialization of Alaska’s North Slope natural gas.

And the jack-up rigs in Cook Inlet are a sign that Cook Inlet incentives are working, he said.

“We can look all around the state, and see our uptick in activity,” Parnell said.

Parnell said that providing energy for Anchorage is a priority, as is providing energy for Fairbanks, where lower cost energy could help spur further resource development.

Parnell also responded to Sullivan’s comments about Anchorage’s port project. Sullivan told the audience that it was too important to the state to fail.

Parnell said he’d like to see the plan before the state commits any more money for the project.

“Just know that you’ve got a willing partner here,” he said.

Parnell’s remarks followed a musical act — Skagway businessman Steve Hites sang an adaptation of a Johnny Horton song he called “Battle of new ECA.”

The opening lines praised Gov. Parnell for taking up the fight against the Environmental Protection Agency, or EPA, when it implemented the Emission Control Area Aug. 1 that requires low-sulfur diesel fuel within 200 miles of the Alaska coast.

“Boy, Steve, thank you for that wonderful song,” Parnell said.

Fights like the ECA one, which will add significant cost to shipping and cruise businesses operating in Alaskan waters, are part of his job, Parnell said.

“I represent Alaskans and I will stand up for you,” Parnell said.

Parnell said the state will continue to work on providing comments to the federal government regarding proposed projects in Alaska and proposed federal action that impacts Alaskans.

Parnell mentioned some of the lawsuits the state has taken on recently, including working against attempts to shut down mining, fighting federal delays in timber sale, the ECA implementation, and wilderness designations, supporting delisting of certain endangered species and defending private property rights from EPA encroachment.

Beyond federal fights, Parnell said the state is working on its own processes to enable projects to move forward.

Parnell said that the state’s Department of Natural Resources also has worked to reduce the backlog of permits in its hands so that applications receive consistent, timely reviews and projects can move forward.

A state timber task force also recently provided several recommendations on how the state can push the federal government on action that could benefit timber.

The state also is working to create another state forest, the Susitna State Forest, to provide opportunity on its own.

Parnell also talked about the challenges the nation has faced, including natural disasters and economic crisis. While economic recovery might seem distant to some, Parnell said that Alaska’s story is different because of the state’s resources.

“Resources remain Alaska’s advantage in this unpredictable world,” Parnell said. “Alaskans can walk a greater trajectory of opportunity because of our unique position in this world.”

Molly Dischner is a reporter for the Alaska Journal of Commerce. She can be reached at molly.dischner@alaskajournal.com.

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