Walker focuses on opportunities; says gas will move to tidewater

Alaska’s new governor, Bill Walker, delivered his first state-of-the-state address Jan. 21.

While short on oil and gas specifics, Walker had a positive message, saying that even though the state faces economic challenges caused by the dramatic drop in crude oil prices, the focus needs to be on opportunities.

He emphasized Alaska buy and Alaska hire - saying he’d rather see North Slope workers commuting from Minto, rather than from Mississippi, and from Houston, Alaska, rather than from Houston, Texas, and calling Alaska dollars spent outside the state one of the biggest commodities the state exports.

On North Slope natural gas, Walker said he had been working toward a gas line ever since the trans-Alaska oil pipeline began moving North Slope crude oil.

It is time to build a gas line to provide natural gas to Alaskans and liquefied natural gas to world markets, he said, vowing that building the line would begin under his administration.

Under the previous administration the Legislature approved an opportunity for the state to take an equity stake in the Alaska LNG project. With state participation there are now five partners in this project - BP, ConocoPhillips, ExxonMobil, TransCanada and the state.

It is “beyond time” to complete work legislators have begun on a gas line project, he said.

Walker said he had signed a memorandum of understanding with “a major Japanese energy consortium,” referring to the MOU he signed Dec. 23 with Resources Energy Inc., the American branch of Energy Resources Inc., a Japanese company.

As part of its work on the Alaska LNG project, the state has to determine that it would be in its best interest to take natural gas “in kind,” rather than “in value.” If the state takes natural gas in kind it would then have natural gas to sell.

Walker also said it was “beyond time” that Alaska accesses reserves under the Arctic National Wildlife Refuge.

The governor said Alaska needs to focus on value-added opportunities, saying that when the state exports its resources and imports finished products its role is that of a colony, whereas when something is made from resources in the state and exported, that is an economy. He cited LNG and fertilizer exported from Nikiski as examples of processed goods, although fertilizer export ceased a number of years ago and LNG export is now only sporadic.

Walker said the state has “nearly limitless” potential from oil and mining, but needs to stop having the same fights with national leaders and expecting different results. He said the facts are on Alaska’s side and we need to use them, but he said we have to listen, address agency concerns and forge a path forward.

Members of the House and Senate majorities had mixed reactions to the governor’s remarks.

Senate President Kevin Meyer, R-Anchorage, said that while Walker “talked about building a gas pipeline under his administration, we’ve heard that from many governors now.”

Meyer said he would have liked to have heard “a little more detail” on how that would happen.

“He talked about building a gas line to tidewater. Frankly, we are past that,” he said.

House Speaker Mike Chenault, R-Nikiski, said he liked some of the things the governor said about the gas line, but said he had “concerns about how do we move forward on the natural gas line.”

Walker has a lawsuit filed against the Point Thomson settlement (this from prior to his election), Chenault said, and without Point Thomson gas the line won’t move forward. He said legislators haven’t heard what’s happening with that lawsuit, and said it’s “important that we get an answer to” that and as soon as possible.

Walker has called a halt to an in-state gas pipeline project, ASAP, among other megaprojects, and Rep. Craig Johnson, R-Anchorage, the House Rules chair, said the Legislature has put enough money into that project, and it is far enough along, that the governor’s action “has very little effect on the pipeline.”

House Majority Leader Charisse Millett, R-Anchorage, said she was pleased that Walker talked about ANWR and his commitment to work with the state’s congressional delegation to open ANWR.

She also commented on having heard many governors say they are going to build a gas pipeline.

“Let’s hope that happens this time.”

- Kristen Nelson

Steve Quinn contributed to this story