Providing coverage of Alaska and northern Canada's oil and gas industry
October 2019

Vol. 24, No.40 Week of October 06, 2019

Mat-Su continues to fight for MacKenzie

Borough has filed a motion for a supplemental draft EIS; tells FERC AGDC’s plan to put LNG facility at Nikiski is not LEDPA

Kristen Nelson

Petroleum News

The Matanuska-Susitna Borough is continuing its fight to locate a liquefied natural gas facility and terminal for the Alaska LNG Project at Port MacKenzie, even as the Federal Energy Regulatory Commission takes public comment on a draft environmental impact statement for a project with a liquefaction facility and terminal at Nikiski on the Kenai Peninsula.

The borough asked FERC in a Sept. 27 filing to issue a supplemental draft EIS for the Alaska Gasline Development Corp.’s Alaska LNG Project “in order to cure the foundational defects in the current draft.”

During the scoping period for the draft EIS, which was issued in late June, there was considerable interest in alternatives - a different route for the pipeline through Denali National Park and Preserve, running the pipeline to Valdez and building the LNG facility and terminal there or placing the LNG facility and terminal at Port MacKenzie rather than at Nikiski.

The Mat-Su Borough was a late intervenor in the FERC process, filing in January 2018 because it wanted Port MacKenzie considered; the Kenai Peninsula Borough intervened in August 2018 to protect the Nikiski site selection. Nikiski was selected as the lead site for the liquefaction facility in 2013. The other contender for the site, Valdez, which intervened in 2017, has long wanted an LNG facility and terminal there.

In September 2018 the Mat-Su Borough asked FERC to delay a decision on the project until Port MacKenzie had been adequately considered as a site for the project’s LNG facility and terminal.

AGDC told FERC in October 2018 that it had provided data in July 2018 to allow the commission to quantitatively compare the Port MacKenzie alternative to Nikiski. It said it had “in good faith analyzed the Port MacKenzie site based on the information and recommendations provided to it by MSB” and the borough’s consultant. AGDC said the borough had proposed a “slight deviation” in one of the options analyzed by AGDC “at the eleventh hour,” calling it “yet another moving target presented by MSB during these proceedings.”

The back and forth

The Kenai Peninsula Borough also responded in October 2018, telling FERC Port MacKenzie was not an “optimum” alternative site because it is being developed for other activities, and defending the Nikiski site proposed as “not encumbered by timber, rail line or other development.”

The Kenai Peninsula Borough also told FERC that Port MacKenzie would lengthen the shipping route and said the Mat-Su Borough’s proposal was not significantly different from one of its previous options, one that Mat-Su “has admitted presents significant challenges.”

In response to AGDC’s response the Mat-Su Borough told FERC it believed AGDC had not provided FERC staff with the information necessary to do a comparative analysis of the Nikiski and Port MacKenzie sites.

Current filing

In its current motion for a supplemental draft EIS, the Mat-Su Borough said there were technical deficiencies in the draft EIS which it would address in a later filing, but said it was “filing this motion with the Commission separately in an effort to draw attention to, and correct, certain significant flaws in the report.”

The borough argued that the draft EIS does not do an adequate analysis of Port MacKenzie as an alternative and does not provide enough factual information to determine if the Nikiski site is the LEDPA, the least environmentally damaging practicable alternative, the requirement for a U.S. Army Corps of Engineers permit under Section 404 of the Clean Water Act.

The borough’s motion calls the alternative site analysis in the DEIS “cursory.” It says the DEIS only provides a summary overview of the Port MacKenzie alternative in the alternatives section, but “does not provide any analysis whatsoever of the Port MacKenzie Alternative in the Environmental Analysis sections. Rather, FERC eliminates the Port MacKenzie Alternative from full consideration as a reasonable alternative site” because it fails to satisfy one objective of the project, allowing for future interconnection with the Enstar pipeline for gas delivery nearer to the Kenai Peninsula, one of three future delivery points identified as objectives of the project.

The Mat-Su Borough told FERC that gas delivery to the Kenai Peninsula is not an objective in the DEIS - just commercializing North Slope natural gas; being competitive for delivery to foreign markets; and providing interconnections along the way for in-state gas delivery.

Mat-Su argues that no specific interconnect points were identified.

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