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Vol. 24, No.41 Week of October 13, 2019
Providing coverage of Alaska and northern Canada's oil and gas industry

Valdez attorneys respond

City tells FERC Anchorage doesn’t need gas, route to Valdez would meet objectives

Kristen Nelson

Petroleum News

The Federal Energy Regulatory Commission has received numerous comments on the draft environmental impact statement for the Alaska LNG project, including requests for a supplemental DEIS from the Matanuska-Susitna Borough (see story in Oct. 6 issue of Petroleum News) and the City of Valdez, both related to the choice of a pipeline route from the North Slope to Cook Inlet with a liquefaction facility at Nikiski, the proposal evaluated in the DEIS.

Ahtna and Cook Inlet Region Inc. expressed concern about subsistence impacts, and the state cited issues on which it disagreed with FERC, noting that FERC had refused to accept the state as a cooperating agency in development of the DEIS.


Valdez, the city at the terminus of the trans-Alaska oil pipeline, has long yearned to also be the terminus of a companion natural gas pipeline, with a liquefied natural gas facility producing LNG for export.

The most recent iteration of a plan to commercialize Alaska North Slope natural gas, the Alaska LNG Project, proposes a pipeline terminating at Nikiski on Cook Inlet, with options for natural gas to Alaska communities along the pipeline route.

Valdez is not in the picture.

The city’s attorneys, Brena, Bell & Walker, argue in an Oct. 3 filing with FERC that the DEIS for the project to Nikiski does not comply with the National Environmental Policy Act because it does not accurately present the Valdez alternative and relies on “unsupported assertions” from the Alaska Gasline Development Corp., the project proponent, about impacts associated with the Valdez option.

The filing requests environmental impact data and comments, and says AGDC “has failed to provide the environmental impact data necessary to conduct an objective comparative analysis of the proposed pipeline route to and terminal site at Nikiski … and the alternative pipeline route to and terminal site located at Valdez … required in the Draft Environmental Impact Statement.”

The filing goes on to say that “the data that AGDC has provided is presented in a manner that obfuscates the true nature of the impacts associated with each alternative.”

The Palmer Spur issue

The filing says AGDC has aggregated data for a Valdez option with a 148-mile spur pipeline from Glennallen to Palmer, which would provide natural gas for Anchorage if the line went to Valdez, and notes that AGDC and FERC “have dedicated less than three pages in the DEIS to analyzing the Valdez Delivery Option despite the fact that both FERC and the U.S. Army Corps of Engineers have previously determined it to be the preferred alternative.”

Valdez told FERC it supports the “stated purpose” of the Alaska LNG Project to commercialize ANS natural gas, bring cost-competitive LNG to foreign markets and provide interconnections to allow for in-state gas deliveries.

But, the filing says, failure to address issues it has identified “will inevitably lead to costly delay and litigation from environmental advocacy groups and others.”

The filing on behalf of Valdez requests that FERC issue a supplemental DEIS to address the issues it has identified.

Those issues include what the filing calls a lack of sufficient data to compare the Valdez and Nikiski alternatives.

AGDC, the filing says, has aggregated data on impacts of the Valdez alternative with impacts of the Palmer Spur, asserting “the Palmer Spur is a reasonably foreseeable indirect impact and, therefore, must be included in FERC’s analysis of the Alaska LNG Project.”

In 2014, in the prefiling process, AGDC “never suggested analysis of the Palmer Spur was necessary,” the Valdez filing says, and provided no data on the Palmer Spur until 2017, when it aggregated Palmer Spur impacts with Valdez impacts.

“Unlike the Fairbanks Lateral associated with the Nikiski Alternative, the Palmer Spur is not required to satisfy the Alaska LNG Project’s purpose and is not a reasonably foreseeable aspect of the Valdez Delivery Option,” the filing argues. “No where in the statement of purpose for the Alaska LNG Project does delivery of natural gas to the greater Anchorage area appear,” since Anchorage is not an area with little or no access to natural gas.

The filing further argues that there is no evidence the Palmer Spur would ever be economically or commercially viable, based on existing natural gas in the Anchorage area and potential delivery of natural gas to Anchorage from Valdez by rail, truck or tanker, “all of which may be more economically viable than constructing a 148-mile spur pipeline through mountainous terrain.”

The filing says FERC’s reliance on the Palmer Spur as a “primary disadvantage” of the Valdez option “unlawfully relies upon analysis of a project impact that is not reasonably foreseeable and therefore fails to comply with NEPA.”

The filing also disputes AGDC’s estimate of the amount of overburden and rock which would have to be removed at Anderson Bay to build a liquefaction facility there, saying AGDC has provided no data or engineering analysis to support its estimates, which contradict earlier FERC adopted estimates for excavation and fill requirements at Anderson Bay.

On the positive side, Valdez would not require a Cook Inlet pipeline crossing, the filing notes.

“These flaws in the DEIS render it subject to judicial challenge for failing to provide the objective comparative analysis mandated by NEPA and failing to render a decision on a scientific and analytical basis,” the filing says.

Use of the existing right of way to Valdez is also not compared with the Nikiski route, and the filing argues that comparison would reveal “substantial environmental advantages” of the Valdez option compared to Nikiski.

“Absent a finding that the use of the existing TAPS utility corridor is impracticable, FERC cannot legally issue permits for the Alaska LNG Project utilizing the Nikiski Alternative,” the filing says, in summarizing the right of way issue.

Native corporations

Ahtna Inc., the Native regional corporation with lands from the Nenana River to the Chugach Range, told FERC it “supports safe and responsible development” and is commenting to identify issues where FERC’s “analysis and process should be improved to better address the impacts of this proposed development on the Ahtna people.”

Comments from Cook Inlet Region Inc., the Native regional corporation in Southcentral Alaska, struck a similar note, with CIRI telling FERC that it “expresses general support for environmentally responsible resource development throughout the State of Alaska and for the AKLNG project.”

Ahtna told FERC it is the sixth largest private landowner in Alaska and “the largest private property owner impacted by the Alaska LNG pipeline”; CIRI said it is the largest private landowner in Southcentral Alaska. Ahtna has more than 1.7 million acres; CIRI has more than 1.3 million acres of subsurface and large surface estates shared with its seven village corporations.

The pipeline, as proposed, would cross 35 miles of Ahtna land, the corporation said.

Ahtna said it has rights under terms of the Alaska Native Claims Settlement Act and the Alaska National Interest Lands Conservation Act and urged FERC to expressly recognize that the Alaska LNG project is subject to specific and unique statutory requirements “and to fulfill the consultation requirements” under statute.

To date, Ahtna said, neither FERC nor AGDC have communicated with Ahtna or made any commitments to Ahtna regarding access to the 35 miles of right of way over Ahtna land.

Ahtna also said the DEIS does not adequate analyze how the proposed pipeline “would affect customary and traditional use of wild game by the Ahtna people or how the pipeline’s impacts would aggregate ongoing cumulative impacts to Ahtna subsistence use and way of life.” Ahtna said it was particularly concerned that a pipeline “built through the Cantwell community area and extended to Anchorage would further negatively impact Ahtna ways of life, both during the construction and operation of the pipeline.” The Native Village of Cantwell is 210 miles north of Anchorage and 27 miles from the Denali National Park entrance.

CIRI expressed subsistence related concerns, but also expressed business concerns, saying it would like assurance that there would be available capacity in the pipeline within the Cook Inlet region that gas from Southcentral would benefit from proximity to the line, and also requested that AGDC “make gas off-take accessible to CIRI at commercially reasonable rates to ensure future economic development opportunities near the AKLNG.”

CIRI said it appreciated the extensive discussion in the DEIS about subsistence “and the acknowledgement that the magnitude of the impacts are largely unknown,” and requested “the opportunity for representatives from impacted village corporations and tribes to participate in future discussions.”

Trespass is an issue raised by CIRI, which said the DEIS reports that 481 new roads will be required. CIRI said landowners should not be required to notify AGDC that the road is to be removed after construction - “AGDC should flag the issue of permanency for the individual landowners at the time of seeking permission to build the road.”

Since some of the new roads will provide access to otherwise inaccessible locations, “it is incumbent that AGDC also help mitigate the economic and resource damage through trespass that the project will invite.”

State comments

Comments from the state of Alaska, authored by Faith Martineau, executive director of the Office of Project Management and Permitting in the Department of Natural Resources, represent a review team with participants from DNR and the departments of Environmental Conservation; Fish and Game; Commerce, Community and Economic Development; Health and Social Services; Transportation & Public Facilities; and Public Safety.

Martineau said AGDC, the project proponent, was not on the review team.

She said the state found the draft EIS “to be satisfactorily written and supports the applicant’s Proposed Action.”

FERC denied the state’s request to be a cooperating agency on the EIS and the absence of input from state agencies “is apparent,” Martineau said, listing deficiencies in a number of areas, with “three topics that require substantial improvement and would benefit from engagement with State regulatory agencies prior to finalizing the EIS.”

These topics are buried pipeline construction in permafrost; impacts to the Central Arctic Caribou Herd; and primary regulatory authority for air quality.

Martineau said the oil and gas industry in the state has a history of successful construction in permafrost and the state would require AGDC to implement best management practices for construction in permafrost as a condition of state authorizations. She said the state “found multiple instances in the Draft EIS where details concerning permafrost construction techniques and monitoring efforts were not well explained,” and “recommends further detail and clarification on these topics.”

On the Central Arctic Caribou Herd, the Department of Fish and Game “found multiple instances in the Draft EIS where information concerning the Central Arctic Caribou Herd was inconsistent with ADF&G data.” There has been substantial research on caribou over the last 40 years and the department “is providing FERC with references to several pertinent research papers” for consideration.

“ADF&G disagrees with FERC’s assessment that the Alaska LNG Project would result in significant adverse impacts to the Central Arctic Caribou Herd and requests that FERC update their caribou information: including the adoption of mitigation of mitigation measures that are considered effective in contemporary oil and gas development.”

Martineau said the state is also asking FERC to remove a “Sensitive Class II” designation from the air quality portion of the DEIS.

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