AGDC boss claims he is 98 percent sure gas line will be built
If Alaska utilities trust Frank Richards, the president of the Alaska Gasline Development Corporation, they will abandon all costly plans to import natural gas because he is confident that a gas pipeline will be built.
“I put my confidence level at 98 percent,” Richards told the Senate Resources Committee this past week.
I was surprised that no one asked him why he thinks there is a 2 percent chance of failure.
So it’s a sure thing. Someone should have asked him when the ice will go out in Nenana and who he likes in the Iditarod. Would he be confident in betting his paycheck on his gasline prediction?
Richards is again at the top of the pay scale in state government, earning a total of $527,764 last year.
The big unknown, of course, is that we don’t know who is going to pay for the pipeline and how those unknown investors expect to make money and protect themselves from losing money. And we don’t know what the project will cost or how much the gas will cost. Other than that, it’s all set.
Glenfarne has updated the estimated price of the pipeline, but says it is a secret as to how many more billions are needed. So how are Alaska utilities going to make binding deals that will tie the financial future of their organizations to the pipeline project when the energy future is so uncertain? And why should the state cut property taxes by 90 percent without knowing the finances?
I don’t think the utilities can afford to take Richards’s word that everything will go according to plan. The last 50 years of pipeline prattle and thousands of headlines announcing that the pipeline is closer than ever should have taught us something.
Of course there are studies that say the gas would be far more expensive than it has been in Anchorage in the past—at least to start with—and far less expensive in Fairbanks than it is now. But those estimates require a lot of guesswork.
The only thing that makes sense to me is that Richards and Glenfarne are still counting on President Donald Trump to pull a pipeline out of his red hat collection. There must still be a belief that Trump will succeed in shaking down Japan and Korea to pay tens of billions that they would otherwise not want to part with. It will be the Trump pipeline, a triumph like the Trump phone, the Trump coin and the Trump steak.
Just a word of caution, however.
If you want the strongest argument for why a giant Alaska gas pipeline is not closer than ever—contrary to the repeated claims from Alaska’s political leaders—you’ll find him living in the White House.
I take it as a bad sign that Trump did not mention the Alaska project when he aired his countless grievances to the nation, performing for the cream of congressional clappers.
It was a different story a year ago when Trump first claimed that Japan had agreed to a joint venture to build the pipeline.
There was no joint venture. There is no sign of a joint venture. And there won’t be a joint venture without a miracle.
The important thing to understand is that Trump talking about the gas pipeline doesn’t mean it will happen.
A year ago in March, Trump lied in a speech to Congress about the “gigantic natural gas pipeline in Alaska, among the largest in the world where Japan, South Korea and other nations want to be our partner with investments of trillions of dollars each. There’s never been anything like that one. It will be truly spectacular. It’s all set to go. The permitting has gotten (sic),” Trump said.
Alaska’s Republican leaders led the cheering for the spectacular news.
Sullivan said “the stars are aligned like never before for the @AlaskaLNG project—a decades-long energy dream for Alaska.”
“Governor Dunleavy and I pitched the Trump administration on having the President mention this in his State of the Union,” Sullivan said a year ago.
“On the global stage, President Trump just committed to our LNG pipeline. ‘Beautiful Alaska, we love Alaska!’” Dunleavy said.
“President Trump’s support for AKLNG will ensure this massive LNG project is completed, and clean Alaska gas supplies our Asian allies and our Alaskan residents for decades to come! Thank you, President Trump!” Dunleavy said.
In April, Trump claimed he had met with the acting leader of South Korea and talked about many things, including “their joint venture in an Alaska Pipeline.”
In July, Trump claimed at the White House that Japan is “forming a joint venture with us at, in Alaska, as you know for the LNG.”
“They’re all set to make that deal now so I think it’s good.”
“We’re gonna make a deal with Japan on the LNG in Alaska,” Trump claimed.
He repeated that claim in August.
“And we’re dealing with South Korea, as you know, and Alaska. And we’re going to be making a deal, a joint venture with South Korea. Japan is involved also. Very strongly involved,” Trump claimed.
In September, Trump cabinet member Howard Lutnick explained how Trump could order other nations to build the pipeline, using money they agreed to pay to keep him from slapping even higher tariffs on them.
“The president says look I want to build, as an example, the Alaska pipeline. I am going to finally utilize all those assets that we have in Alaska. We’re going to build a giant Alaska pipeline, make capital calls to the Japanese. We build that. I mean think of the employment. You look at next year’s employment, it is going to explode. All these factories we’re building. All the plants that are coming into America.”
Lutnick is the guy who famously said last year that Trump’s trade deals will create all sorts of new jobs in the United States, including having "the army of millions and millions of human beings screwing in little, little screws to make iPhones. That kind of thing is going to come to America.”
I’m 98 percent sure that no one can be 98 percent sure of the pipeline getting built, which is one reason why the utilities have to look at importing natural gas.
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