The Alaska LNG Project achieved a major permitting milestone March 6 with the issuance of a final environmental impact statement by the Federal Energy Regulatory Commission.
But the FEIS, even with an expected FERC order on the project this spring, doesn’t guarantee the project will happen.
“The final EIS is a milestone in the Alaska LNG permitting process - a process still with significant hurdles,” Alaska Gov. Mike Dunleavy said in a statement released by the Alaska Gasline Development Corp., the state public corporation which is the project sponsor. “I appreciate the diligence of the AGDC team throughout this process,” the governor said. “We look forward to reviewing the EIS and receiving the record of decision from FERC, at which point we will evaluate our next steps. FERC licensure is an important component in determining if Alaska LNG, which must be led by private enterprise, is competitive and economically advantageous for development.”
FERC received, and approved, a request for pre-filing review of the project to move North Slope natural gas to Southcentral Alaska for liquefaction and shipment to world markets as LNG in September 2014, when the state was in partnership with BP, ConocoPhillips, ExxonMobil and TransCanada.
AGDC took over the project in January 2017 and filed an application with FERC in April 2017 for authorization to construct and operate a new gas treatment plant; a 1 mile long 60-inch diameter Prudhoe Bay unit gas transmission line; a 62.5-mile long, 32-inch diameter Point Thomson unit gas transmission line; an 806.9-mile 42-inch diameter natural gas pipeline; and a 20 million metric-ton per year liquefaction facility, including an LNG plant and a marine terminal.
AGDC has characterized receipt of FERC approval as important in removing project regulatory risk.
New AGDC leadership
“This EIS represents substantial progress in the approval process for Alaska LNG,” said AGDC President Frank Richards. “The EIS reflects six years of public input, engineering, science-based environmental research and cultural resource studies. The EIS assesses more than 150,000 pages of data and makes Alaska LNG one of the most scrutinized energy infrastructure projects in Alaska. Such a rigorous, comprehensive environmental analysis provides assurances that the merits and impacts of Alaska LNG have been carefully vetted by numerous federal regulatory authorities.”
Richards, who replaced Interim President Joe Dubler, also said: “ExxonMobil and BP have contributed valuable expertise and financial assistance which helped make the accomplishment possible. Both organizations continue to provide critical support in the effort to progress Alaska LNG.
“In the coming days,” Richards said, “we will review the conclusions in the EIS, examine any differences with the draft EIS published last year, and use these conclusions to help inform decisions about the next steps for Alaska LNG.”
The AGDC board named Richards president effective March 1, succeeding Dubler, whose retirement was announced in February.
Richards had served as AGDC senior vice president of program management and was responsible for development and execution of the Alaska LNG project. He is a registered professional engineer and joined AGDC in April 2012.
Richards has a Bachelor of Science in civil engineering from the University of Maine and has worked on numerous large-scale infrastructure projects in Alaska, including the Red Dog Mine, the Bradley Lake hydroelectric project and offshore North Slope oilfield development projects.
Alternatives
The National Environmental Policy Act of 1969 requires consideration of reasonable alternatives to the proposed project, FERC said in its FEIS, with alternatives considered reasonable if they meet the stated purpose of the project and are technically and economically feasible and practical.
“A preferable alternative would offer a significant environmental advantage over the proposed action,” the agency said.
FERC said it considered the no action alternative, system alternatives, site alternatives, alternative delivery systems and docking stations and alternative pipeline routes and design, with the EIS evaluating alternatives developed by FERC staff, by AGDC or suggested by stakeholders.
On the no action alternative, FERC said, the project impacts would not occur, but the purpose of the project (commercializing North Slope natural gas by treating and liquefying it and then exporting LNG to foreign markets while also providing for in-state deliveries) would not be met, and AGDC or other applicants would likely develop a new project for commercializing North Slope natural gas. “Given the infrastructure needed to transport the same gas volumes, environmental impacts would likely be comparable to those of the Project. Therefore, we concluded that the no action alternative provides no significant environmental advantage over the Project,” FERC said.
System alternatives (“potential use of existing, proposed, or modified natural gas infrastructure to meet the same objectives as the Project”) - including the Kenai LNG facility, the state-sponsored Alaska Stand Alone Pipeline and Qilak LNG - were considered, along with existing and proposed Canadian and contiguous U.S. system alternatives, but FERC found those alternatives “would require design changes or new infrastructure that would result in similar or greater impacts than the Project.” FERC said none of the system alternatives “would be preferable to the Project.”
Other system alternatives considered included alternate gas treatment plant sites and configurations, alternates to access roads, wastewater disposal alternatives, module delivery system alternatives, North Slope dock alternatives, West Dock Causeway alternatives, water supply system alternatives, mainline pipeline route alternatives and Cook Inlet route alternatives. None were found to provide significant environmental advantages over the project.
Denali alternatives
In the draft EIS, FERC evaluated an alternative route through Denali National Park and Preserve, a route which was evaluated as part of ASAP and identified as the LEDPA, least environmentally damaging practicable alternative, for ASAP.
After the publication of the draft EIS, AGDC adopted the Denali alternative as the proposed route and the analysis was revised to compare the proposed route, including the Denali alternative, as well as a route using the Nenana River Bridge at Park Station. FERC said use of the existing highway bridge would avoid disrupting pedestrian traffic during construction but would require a 69-mile detour for trucks during construction, and that disruption would mean that alternative couldn’t provide a significant environmental advantage, so it wasn’t considered further.
The route previously proposed by AGDC, the Denali avoidance alternative, passes east of DNPP.
Both routes would cross the seismically active Park Road Fault, FERC said, with both crossings using aboveground designs similar to those on the trans-Alaska oil pipeline.
FERC said the Denali avoidance alternative presents some advantages and some disadvantages over the proposed route. AGDC has said the avoidance alternative is technically feasible, but that the proposed route has construction advantages because the avoidance alternative goes through rugged terrain and crosses potentially unstable slopes.
FERC said either route would be acceptable, without significant environmental advantages from either and since overall impacts are comparable, “we conclude that the Denali Avoidance Alternative would not provide a significant environmental advantage over the proposed route.”
Fairbanks lateral
FERC said it received many comments recommending that the mainline be routed closer to Fairbanks, increasing the likelihood that natural gas would be available there in the future and avoiding wetlands in the Minto Flats state game refuge.
An interconnection is planned along the mainline pipeline for future delivery of natural gas to Fairbanks.
Rerouting the mainline closer to Fairbanks would reduce the length of a future lateral to that city by about 25.7 miles, FERC said, but would increase the length of the large diameter mainline by 37.5 miles, which would result in a greater overall environmental impact.
“While the Fairbanks Alternative would avoid the Minto Flats SGR, this would be offset by the additional impacts on land, water, and other resources that would result from the longer Fairbanks Alternative. For these reasons, the Fairbanks Alternative does not produce a significant environmental advantage over the proposed route,” FERC said.
Aboveground alternative
FERC evaluated comments from the U.S. Fish and Wildlife Service that the portion of the mainline pipeline on the Arctic coastal plain should be built aboveground to avoid trenching and the potential of trench subsidence, ponding over the line, draining of adjacent wetlands and bank thawing/erosion at river crossings. USFWS also expressed concern about trenching in permafrost areas along the entire line.
The alternative would have the first 60 miles of the line aboveground on vertical support members, with the principal environmental benefit being limiting permafrost disturbance to the VSM sites, some 6,000 of which would be required.
“AGDC indicates that an aboveground pipeline is likely to experience operational difficulties during winter shutdowns or other operational upsets,” FERC said, with low temperatures causing some heavier hydrocarbons in the gas to liquefy and settle in low spots in the line, requiring careful controlling of gas velocity to move the liquid down the line and then removal of the liquid at compressor stations. “AGDC indicates that this procedure could result in shutdowns of days or weeks, creating disruptions at the Liquefaction Facilities,” FERC said.
The aboveground alternative would also be more exposed to accidental or intentional damage.
FERC said while technically feasible, the aboveground alternative “is not technically practical due to the risk to normal commercial facility operations posed by condensation of the gas stream.”
Liquefaction alternatives
FERC said several alternative sites for liquefaction facilities were evaluated.
Siting the LNG facility on the North Slope is not technically practical, the agency said, because of the limited annual ice-free window, the shallowness of the Beaufort Sea which doesn’t reach a minimum 60-foot depth until almost 20 miles offshore and additional North Slope docking facilities required if both GTP and LNG facility modules has to be delivered at the same time.
AGDC identified seven site alternatives in Southcentral Alaska, and FERC said it evaluated those based on property size and availability and waterfront access with a minimum depth of 53.5 feet.
FERC did not find any of the alternatives provided significant environmental advantages over the proposed site at Nikiski.
Anderson Bay
There were two liquefaction site alternatives which had strong local community support: Anderson Bay and Port MacKenzie.
Anderson Bay is adjacent to Prince William Sound, with a pipeline comparable in length to the proposed mainline and avoiding a Cook Inlet Crossing.
A disadvantage of Anderson Bay, FERC said, is that an additional 113 miles of pipeline would be required to reach markets in Fairbanks and Anchorage, compared to the proposed project. The City of Valdez said future laterals should not be included in the analysis, but FERC said because an objective of the project is in-state delivery of natural gas, “we considered in our comparative evaluation of alternatives the distances for which new pipeline laterals would have to be built to deliver gas to in-state markets and associated environmental impact.”
Thompson Pass poses another disadvantage. FERC said AGDC concluded the corridor does not have enough space to build a pipeline through Thompson Pass using conventional methods, requiring either a new route across the Chugach Mountains or an alternate method of crossing the pass, such as tunneling or terracing, likely adding significantly to construction complexity, lengthening the construction schedule and increasing environmental impacts.
Extensive civil work would be required at the Anderson Bay site and construction of a new access road. Overburden and rock would have to be removed, an estimated 3.9 million cubic yards in excess of that needed at the site, compared to an estimated 800,000 cubic yards of sediment at the Nikiski site, resulting “in greater marine impacts than development of the proposed site,” FERC said.
There are also issues of transit for LNG carriers through the Valdez Narrows and the Hinchinbrook Entrance to Prince William Sound.
The Anderson Bay site, FERC concluded, “would not provide a significant environmental advantage over the proposed site.”
Port MacKenzie
The Matanuska-Susitna Borough requested evaluation of an alternative liquefaction facility site near Port MacKenzie. AGDC initially identified a configuration putting most of the LNG facilities some 2 miles from shore in a wetlands area but FERC said a second configuration, the one analyzed in the FEIS, locates the facilities near the shore close to marine facilities, reducing the wetland impact.
FERC said the Port MacKenzie alternative would shorten the mainline pipeline route by almost 60 miles, reducing construction-related land disturbance, eliminate one standalone heater station, avoid Cook Inlet subsea pipeline construction and avoid the need to relocate the Kenai Spur Highway. As with the Nikiski proposal, the Port MacKenzie alternative would connect to an existing Enstar pipeline but would not allow for a future connection to Enstar at the southern end of the system for delivery to the Kenai Peninsula area.
FERC said ice conditions are a regular occurrence in upper Cook Inlet from about the end of November through April, whereas the Nikiski area experiences ice conditions from January through February, “and some years not at all.” FERC said it assumed that current ice conditions would persist and ice navigation structures would be necessary for safe operation at Port MacKenzie.
Knik Arm has the second highest tidal range in North America, up to 40 feet compared to 30.2 feet at Nikiski, and in combination with relatively high silt content, there is an abrasive environment for marine infrastructure, which at Port MacKenzie would be similar to the Port of Alaska, which “is seeking funding to rebuild dock facilities that have experienced significant deterioration since their construction.” Any new marine facilities at Port MacKenzie would need to be engineered and constructed to meet those conditions “at greater construction and operating cost, or face a shorter life expectancy, relative to the proposed Nikiski site,” FERC said.
FERC said it did not know if LNG vessel transits at Port MacKenzie “would be compatible with the operation of Elmendorf Air Force Base and with the dense commercial and population centers associated with Anchorage,” and said the Coast Guard would need to assess the suitability of the waterway for LNG traffic.
Port MacKenzie has some environmental advantages, FERC said, but Nikiski has other advantages over Port MacKenzie, because of greater potential for beluga whale strikes particularly in summer months with Port MacKenzie; potential for ice conditions in upper Cook Inlet to hamper LNG deliveries; and only two of three delivery points for the project at Port MacKenzie.
“Overall, the alternative’s environmental advantages are not sufficient to offset operational environmental impacts stemming from the increased vessel traffic in Upper Cook Inlet. Therefore, we conclude that the Port MacKenzie Alternative would not provide a significant environmental advantage over the proposed Nikiski site.”
Kudos from elected officials
AGDC received kudos from elected officials in addition to the governor, including the state’s congressional delegation, all Republicans, all of whom thanked FERC staff and Alaskans who worked on the project.
“This final EIS is the culmination of years of research, analysis and public process,” said U.S. Sen. Lisa Murkowski. “It is one of the most comprehensive federal environmental reviews ever completed,” she said.
“Bringing clean burning Alaska LNG to markets across the world would be a huge win for Alaska but also for our country,” said U.S. Sen. Dan Sullivan, and said the EIS brings the project closer to reality.
“The Alaska LNG Project represents a great opportunity for our state’s energy infrastructure,” said Congressman Don Young. “Alaskans are strong environmental stewards who can balance both environmental protection and economic growth,” he said.
“The LNG project has tremendous potential to generate new revenue and jobs for our state, and we’re encouraged by this progress,” said Alaska Senate President Cathy Giessel, R-Anchorage, who noted that the FEIS is not the final green light for the project, “but paves the way for the actual authorization expected in June.”
“Reducing risk is key to attracting capital for this potentially course-changing project, and to ensuring a project that ultimately generates revenue to the state and energy and jobs for Alaskans,” said Sen. Peter Micciche, R-Soldotna, chairman of the Senate Resources Committee. “Once we have the final approval from federal regulators, expected later this year, Alaskans will know the true marketplace potential for this monumental LNG export project.”
House Resources Committee Co-Chairs Rep. Geran Tarr, D-Anchorage, and Rep. John Lincoln, I-Kotzebue, said: “There is a long way to go before Alaskans will finally enjoy the benefits of commercialized North Slope gas. Today’s development, however, is a major regulatory milestone that is the culmination of significant private and public investment over the past several years.”
