Last month I outlined some concerns about the proposed Alaska LNG project and suggested that the legislature look more deeply to the experiences of other, successful projects elsewhere in the world to evaluate whether Alaska was applying global best practices. (See The Legislature should rethink the Governor’s LNG proposal, Feb. 18, 2014)
As I have listened to the testimony and presentations about the Alaska LNG project in the intervening period my concerns have only deepened, and, disappointingly, the legislature still has not appeared to turn to the lessons learned from other, successful projects to determine whether Alaska could be doing better with this one. As Alaska discovered with AGIA and ACES, sometimes — oftentimes — its not productive to create new approaches when others already have proven successful. I am concerned that Alaska is going down the same road again.
As I outline in the attached (a copy also can be downloaded here), I believe this project is going wrong in three critical areas.
- Fails to achieve the “alignment” which the earlier Alaska North Slope Royalty Study found critical to successful efforts,
- Unlike successful, similarly situated projects elsewhere in the world, does not provide Alaska with an active role in the critical upstream segment of the project, and
- Something I know a little bit about, potentially creates significant fiscal policy issues for the state and, by transferring a profitable segment of the project to a Canadian entity, does not maximize return to Alaskans.
Sometimes these things are better captured in a slide deck than by an extended essay. I developed this slide deck in the format I would use if asked to testify or speak further on the issue.
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