Battle of words over AK LNG continues

Location the issue: AGDC responds to request from City of Valdez for environmental data; borough fist-a-cuffs — Kenai vs Mat-Su

Kriston Nelson

Petroleum News

The Federal Energy Regulatory Commission has received more comments in the continuing disagreement over where a liquefaction facility for the Alaska LNG Project should be located.

FERC published a draft environmental impact statement for the Alaska LNG Project in June, with comments due Oct. 3, but continuing to pile up in early November.

The latest: Project sponsor Alaska Gasline Development Corp. has responded to a request from the City of Valdez for environmental impact data on location of the liquefaction facility at Valdez, rather than Nikiski, which is the site AGDC proposed; and the Kenai-Peninsula Borough responded to statements made by the Matanuska-Susitna Borough in response to comments on the DEIS by the U.S. Army Corps of Engineers.

AGDC v Valdez

AGDC said “the DEIS thoroughly analyzes and compares the Nikiski site to several alternatives, including the Port Valdez site at Anderson Bay.” While the DEIS found a pipeline to Anderson Bay would be within the trans-Alaska oil pipeline corridor for most of its length and would avoid Cook Inlet crossing impacts, the DEIS also found “that both the site at Anderson Bay and the pipeline required to reach the site would result in numerous environmental impacts,” AGDC said.

The DEIS also found “an additional 113 miles of lateral pipelines would need to be constructed to reach in-state markets in Fairbanks and Anchorage, as well as a lateral to the Kenai Peninsula to a yet to be determined delivery point,” AGDC told FERC.

The DEIS does contain a comparative analysis, AGDC said, and “concludes that the Anderson Bay site would not provide a significant environmental advantage over the proposed Nikiski site.”

Valdez argued that AGDC aggregated data on impacts of the LNG site at Anderson Bay and a 148-mile spur required to reach in-state markets in Anchorage if the pipeline went to Valdez.

AGDC said the Valdez argument is “based on a mischaracterization” of the purpose of analyzing impacts of pipelines connecting Valdez to Fairbanks and Anchorage.

The DEIS “does not even mention the Palmer and Fairbanks spurs specifically,” AGDC said, but analyzes “impacts of an ‘assumed pipeline lateral’ to Fairbanks and Anchorage from each of the alternative sites.”

AGDC said a natural gas pipeline capable of delivering gas to the most populous areas of the state is needed to meet the project’s objectives, based on AGDC’s identification of three areas of the state - Fairbanks, Anchorage/Mat-Su and the Kenai Peninsula - where most of the population resides. Courts have held that agencies “have a duty to consider the applicant’s purpose and the objective of the applicant’s project,” AGDC said. “The DEIS properly relies on AGDC’s statement that a purpose and need of the Project is to allow for in-state gas deliveries to the State, which reasonably includes the largest population centers in the state.”

AGDC told FERC “the analysis of the Valdez alternative in the DEIS is not incomplete or inadequate” and asks that FERC reject the Valdez criticism of the DEIS comparative analysis, saying “the DEIS properly compares the respective impacts of both the liquefaction site and associated pipelines of each alternative that are needed to meet the Project’s objectives.”

Kenai Peninsula v Mat-Su

Kenai told FERC that the Mat-Su Borough contends that the U.S. Army Corps of Engineers believes the DEIS is “inadequate.”

“Nothing could be further from the truth,” Kenai said.

While the Corps commented on various aspects of the DEIS, it “did not, however, object to the principal conclusion in the DEIS that the Port MacKenzie site advocated by Mat-Su for the Alaska LNG terminal ‘would not provide a significant environmental advantage over the proposed Nikiski site.’”

“Tellingly, USACE has not requested a supplement to the DEIS,” Kenai told FERC. “Having observed that the NEPA process, based on the ongoing analysis by the interested agencies, reached a conclusion different from Mat-Su’s desired result, Mat-Su seeks to disrupt and delay this proceeding,” KPB said.

Kenai also notes that the Port MacKenzie alternative “would allow for only two of the three currently identified gas delivery points within the state,” denying benefits of direct gas delivery to the Kenai Peninsula.

As for who gets to decide on the site, Kenai said: “AGDC was created by Alaska statute and delegated the authority to select the site for the Alaska LNG export terminal. AGDC selected Nikiski on the Kenai Peninsula as the preferred sit. Mat-Su is now questioning the decision of the State of Alaska, even when there is no environmentally preferable site.”