Under pressure: Even Prax supports LNG to Valdez promotion
Fighting back against a wave of competing projects, mixed messages from Gov. Sean Parnell and an increasing sense of urgency regarding natural gas development in the state legislature, the Valdez City Council gave a unanimous thumbs up to a recommendation from the John Hozey, city manager, titled “Approval to Develop a Detailed Strategy to Ensure that Any In-state Natural Gas Line Terminates in Valdez subject to council approval.”
The move came after a one-hour work session before Monday night’s regularly scheduled council meeting. Bill Walker, city attorney and legal council for the Alaska Gasline Port Authority, gave city officials a list of suggested strategies to promote Valdez as the only port of choice for developing and exporting the state’s vast reserves of undeveloped natural gas.
“It’s a little bit of a head scratcher,” Walker said, as to why other Alaska ports have gained political support as contenders for natural gas export.
The Port Authority already owns permits for a natural gasline to Valdez following the Trans-Alaska Pipeline System (TAPS).
“Don’t underestimate the value of having these kinds of documents,” Walker said.
The Port Authority also recently released an independent study it commissioned with funding provided by the city comparing Port Valdez with Cook Inlet as a suitable port of export.
“No one can hold a candle to Valdez,” he said, noting Port Valdez already has a large presence with the US Coast Guard, an existing oil tanker escort system in addition to an expired but renewable export license for natural gas.
“Valdez is a world-class port,” Walker said. “We don’t have to become one, we are one.”
The council passed the statement as a political declaration –Walker said he was anxious to add additional Valdez support to his arsenal of legislative weaponry as the legislature prepares to reconvene in a special session Wednesday that was called for by Parnell.
What type of recommendations and strategy Hozey will bring back for council approval is unclear.
At the work session before passage of the statement, Walker suggested offering tax incentives tied in with TAPS property taxes.
“Nobody else has that ability,” he said, to be able to bring down the cost of TAPS. Valdez has spearheaded court actions which have increased the taxable value of the oil pipeline. TAPS owners, BP, ConocoPhillips, ExxonMobile and Koch Industries, are also the producers that hold many of the North Slope leases where the natural gas will be extracted.
He also suggested a natural gas “summit” much like the vast meeting Valdez hosted with Korean energy executives and elected officials from Alaska and Washington DC in 2003.
“Just a thought you might want to consider,” Walker said.
Council member Mike Wells suggested and asked advice on hiring a natural gas expert to lobby the producers on behalf of Valdez.
The statement passed unanimously despite criticism from fiscally conservative council member Joe Prax, who complained the statement was too vague and had the aura of handing over a blank check.
The measure passed after the words “subject to council approval” were added to the statement.
During the work session before the actual meeting, Walker expressed a great deal of frustration over the large amount of what he claims is bogus information against a Valdez project that is passing for fact among elected officials in the legislature. He also warned of the looming threat after the passage of House Bill 9, which stalled in the Senate, but calls for a small diameter bullet line from the North Slope to Cook Inlet.
He also noted the failures – and myths – surrounding AGIA – the Palin-era Alaska Gasline Inducement Act, which awarded TransCanada an exclusive license to build a gasline to Alberta, or a small-diameter pipe to Valdez.
Walker said he is often left speechless when Alaska legislators say a federal export license is unobtainable.
He wondered also why elected officials are circumventing AGIA with competing projects while state coffers have paid out $200 million and committed a total of $500 million to it.
“This is the rude truth,” Jim Shirrell said during public comments before a former council passed the statement. “The legislature will do what the producers tell them to – in the end.”