Glenfarne may want $60 million in free state gravel

The state wants to give away gravel for free to projects that find favor with state officials, such as the Ambler Road and the gas pipeline.

For the gas pipeline, this could mean up to 20 million cubic yards of gravel, worth upwards of $60 million. But the Alaska Gas Pipeline Development Corp. says it is in secret negotiations to get something of value for that gas line gravel.

In a better world, the Dunleavy administration would give a clear explanation of the free gravel campaign and what it means to the pipeline project, the state treasury and the economics of the gas pipeline.

In the 22nd hearing it has held on the Dunleavy plan to cut taxes on the proposed gas pipeline by 90 percent, the Senate Resources Committee tried on May 1 to fathom the mysteries of the gravel giveaway.

The lack of news coverage of those 22 hearings is a problem for Alaskans, as most of us are not following along with the analysis of the Dunleavy plan to cut the pipeline taxes by 90 percent. This near blackout, driven not by conspiracy but by the tiny number of working reporters and editors in Alaska, means that Alaskans will be uninformed. For my small part, I will try to catch up a bit in the days ahead.

Dunleavy, other Republican politicians, lobbyists and the usual cadre of instant experts have been shouting that unless Glenfarne gets the 90 percent Dunleavy tax cut, the Legislature will be rightly blamed for killing the pipeline. They are also claiming that with the 90 percent tax cut, the pipeline will be built and energy prices in Alaska will drop.

If the 90 percent tax cut is indeed the only thing the project needs to become a reality—a claim that no one with any sense should believe—why not just call Glenfarne’s bluff? Give the company what it wants and see what happens. The taxes can be adjusted in the future. I would like to hear some good arguments on what’s wrong with that approach.

But first, let’s look at the free gravel campaign from Dunleavy.

Temporary Natural Resources Commissioner John Crowther wrote this letter purporting to answer questions about providing gravel “at a cost of $0.00” to a state corporation like the Alaska Gasline Development Corporation.

But the letter doesn’t explain the Dunleavy plan. Crowther should write another letter to actually answer the key questions for Alaskans.

Frank Richards, the head of the gasline development corporation, told the committee the corporation is negotiating with Glenfarne for getting something back in exchange for free gravel, such as an ownership slice of the project.

But other AGDC officials have said that Glenfarne wants cash and isn’t interested in giving away a slice of equity in exchange for $60 million worth of gravel.

So here we have the state giving away $60 million in gravel and relying on the AGDC to get something out of it from Glenfarne. No one can say how much.

There is a world of missing information here. And the claims that there are legislators trying to kill the project are pure propaganda, promoted by those who defend the Glenfarne decision to keep as many secrets as possible.

On this one, legislators should demand that Glenfarne say how much it will pay for $60 million worth of gravel. I expect that some will claim that if the company doesn’t get $60 million of gravel for free or at a steep discount, that will kill the project.

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