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Mayors question in-state gas line route Fairbanks, North Pole, Delta Junction, Valdez concerned about military consumption, population, total benefits, construction costs Kristen Nelson Petroleum News
Interior and Eastern Alaska mayors told Alaska Gov. Sean Parnell in an April 15 letter that they are concerned about route selection for the proposed in-state gas pipeline.
The letter — from Fairbanks North Star Borough Mayor Luke Hopkins, Fairbanks Mayor Jerry Cleworth, North Pole Mayor Doug Isaacson, Delta Junction Mayor Mary Leith, Valdez Mayor Dave Cobb and Jim Dodson, president and CEO of the Fairbanks Economic Development Corp. — said “the total impacts to society, which include both the direct and indirect costs and benefits,” are not being addressed in the state’s study of the proposed project.
In revision 1 of its plan of development, dated March 2011, the Alaska Gasline Development Corp., which is developing a proposal for an in-state gas pipeline due to the Legislature July 1, said alternatives to the route down the Parks Highway were considered, including the Richardson Highway route and spur line routing options from a main line, one along the Parks Highway and one along the Richardson Highway.
The Richardson route was not selected because it is longer, AGDC said, and House Bill 369 passed by the Legislature in 2010 required selection of an economically feasible route that makes natural gas available to residents at the lowest possible costs.
“The alternatives and routing modes discussed in this section were considered but not carried forward as the proposed action because they did not optimize the number of users, minimize pipeline length, minimize engineering constraints and costs, and minimize opportunities that could adversely affect the environment,” AGDC said.
The reasons listed by AGDC are those contained in HB 369 requirements for route analysis and selection: economically feasible; makes natural gas available at the lowest possible cost; allows for connecting lines to provide gas along the route; uses state land and existing state highway and railroad rights of way to maximum extent possible; and uses existing highway and railroad bridges, gravel sources and other facilities and resources to maximum extent possible.
Lack of transparency In the April 15 letter the officials said they are grateful for the work being done on an in-state gas pipeline, but “concerned about the transparency of the process, the potential for the State to limit public review of the route choices in the future, the validity of the figures used to justify the selection of the Parks Highway route, and the failure to include potential economic benefits in the route selection process.”
The alternatives analysis issued in September 2009 found the Parks Highway route to be the least expensive to build, but “fails to address any of the social benefits along either route,” officials said in the letter, adding that they believe there may be population and gas demand errors in the estimates for the Richardson Highway route.
The letter said demand along the Parks Highway was overestimated due to the inclusion of Clear Air Force Base.
“It is our understanding that Clear Air Force base is unable to utilize gas provided by a natural gas pipeline for strategic security purposes,” the letter said.
The officials said they are also concerned that demand along the Richardson Highway is understated, “primarily as a result of the exclusion of military bases and other potential gas consumers located southeast of Fairbanks.”
There are discrepancies between communities that would be included on both routes, primarily through inclusion of locations under the lateral component of the Parks Highway that would not be serviced by the lateral pipeline, including Fort Wainwright, Eielson Air Force base, the Flint Hills refinery and the city of North Pole, along with Golden Valley Electric Association generation facilities.
The letter said it is unlikely for security reasons that Eielson and Wainwright would convert their coal-fired power plants to gas, but they could potentially use natural gas for energy needs not connected to their steam-heat distribution system. Fort Greeley, farther down the Richardson Highway, does not have coal-fired power so would potentially be interested in using natural gas with diesel, their existing fuel, as a backup.
“If this is true, then the residential, industrial, and military consumers on the Richardson route would be significantly greater than currently estimated,” the letter said.
The letter also said that 2010 census data suggests the Richardson route contains some 7,878 more consumers than the Parks route.
Geotechnical issues “We also believe that the geotechnical issues and potential impacts to human life along the Parks Highway are not being given the full weight they should receive,” the letter said.
It cites a synopsis of some of those issues by Paul Metz, professor of geological engineering at the University of Alaska Fairbanks, which says the Parks Highway route crosses the Denali fault system at two locations while the Richardson Highway route crosses only the main strand of the Denali fault.
Metz said the main strand of the Denali fault crosses the Parks Highway near Cantwell where “there is adequate area to locate a high pressure pipeline away from the buildings and structures in the area.”
However, where the Hines Creek strand of the Denali fault crosses the Parks Highway near the entrance to Denali National Park and Preserve, “there is limited area to build a fault crossing structure for a pipeline away from the populated areas along the highway that would be resistant to a major earthquake,” the Metz synopsis said.
He also said that a major earthquake along the Hines Creek strand fault could cause “large scale and deep seated landslides” in the 12-mile area from Garner Station on the Alaska Railroad through the visitor facilities near the entrance to Denali. Metz said “existing landslides have deformed the Alaska Railroad tunnels at Garner and Moody stations, the Parks Highway and the highway bridges across the Nenana River as well as the tributary creeks to the Nenana River from the Garner station to the park entrance,” and have deformed foundations of recently constructed buildings in Nenana Canyon.
“A failure of natural gas pipeline buried in these large landslides in the canyon would be a major hazard to life and property,” Metz said.
In the area where the Richardson Highway route crosses the main strand of the Denali fault near Black Rapids Glacier, the trans-Alaska oil pipeline withstood a magnitude 7.9 earthquake in 2002, Metz said.
“The natural gas pipeline crossing of the fault could be designed in a similar fashion and located far enough from the oil pipeline such that a catastrophic failure of either one would not impact the other structure,” he said.
Two smaller active fault structures are crossed by the Richardson Highway route, the Donnelly Dome and McGinnis Glacier faults, but in an area where the fault crossings are distant from occupied structures, and Metz said those crossings “do not pose any major hazard to life and property.”
Mineral potential The letter also says a comparative evaluation of mineral resources along each route is necessary, and said Metz “has indicated that the potential to utilize natural gas to extract resources that are currently stranded along both routes could create major economic benefits for communities located along the routes.”
Metz estimated the value of mineral deposits along the Parks Highway route at $14.6 billion compared to an estimated value of $20.2 billion along the Richardson Highway.
“While the potential value of resources along each route is substantial, it seems that the final decision regarding the route of the in-state gasline has been solely based on the estimated costs of the project,” the letter said. “In terms of a correct economic assessment of the project, this is a very limited approach that does not give appropriate weight to the direct and indirect economic and social benefits associated with potential development along each route.”
Questions The officials told the governor they would like to see several questions and concerns addressed:
• The certainty of the military consuming natural gas along each route;
• Whether population estimates used in analyses of the project are the most current available;
• Whether there will be a consideration of the total benefits of each route in the decision-making process; and
• Whether construction costs will be updated to include line construction costs in or around Denali, and whether costs addressing geotechnical issues will be made public.
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