By Matt Buxton email@example.com | Posted: Thursday, October 16, 2014 11:39 pm
FAIRBANKS — While taking jabs at Gov. Sean Parnell for what opponent Bill Walker said is a too-little-too-late response to the Interior’s energy woes, the independent gubernatorial candidate raised questions about the timing of the Interior Energy Project.
“I spent a lot of time looking on the trucking side and doing due diligence. I think it’s a much more economic, much quicker way of doing it,” Walker said, when asked by Parnell if he supported the state-backed project to truck gas to the Interior starting in mid to late 2016.
But the price Fairbanksans will pay for that gas is yet to be known and some community members have raised concerns that it could miss the goal set by the community. And, as Walker pointed out, Fairbanksans won’t get to see that number until after Nov. 4.
“Of course we won’t know those numbers until the day after the election, when those numbers that will be released,” Walker said. “You should think about that when you go to the polls, that the information is going to be released one day after the election.”
The number Walker was talking about was the cost estimate for the North Slope natural gas processing facility spearheaded by the Alaska Industrial Development and Export Authority. And the earliest day it will be available will be Nov. 7, a few days after the election.
That key piece of infrastructure, explained AIDEA spokesman Karsten Rodvik, is a significant cost factor to the project and will play a large role in determining the cost of gas to the Interior.
He defended the timing, saying that it was set by private project coordinator MWH Global Inc., and not the state agency.
“The schedule established by MWH is a direct result of the time our partners needed to do their work,” he said.
“The schedule has been out there for months, with everything on track to come together in the first couple of weeks of November, leading to financial close and the startup of equipment purchasing in December.”
Rodvik also roundly rejected the possibility that AIDEA’s timing after the election was intentional.
“AIDEA does not conduct its business or make decisions based on politics or political schedules,” he said. “Absolutely none of the dates in this project timeline have been adjusted or altered in any way because of the election. It is important to understand that this is a complex engineering project. In no way is this a political process.”
That said, the information released in the days following the election will play a critical for the future of the gas trucking project. The price estimate, which will likely come in a range, will be used when inking gas buying contracts with Fairbanks energy and natural gas utilities. The more gas the utilities can commit to buy, the lower the price is expected to be.
All that information, Rodvik explained, will be used by the AIDEA board to pull the trigger and move forward on the plant.
“The AIDEA Board will use all of this data to determine if the project is feasible, consistent with the goals of the Interior Energy Project, which are to supply natural gas to Interior Alaska at the lowest cost possible, to as many Alaska customers as possible, as soon as possible,” he said.
But if the price ends up being too high, it could strike a serious blow to the future of the project by turning customers away.
It’s a real concern for Borough Mayor Luke Hopkins, one of the backers of the municipal Interior Gas Utility. He said he’s concerned that costs have risen throughout the project and that timelines are slipping. He said leaving the community in the dark until prices are settled could make it difficult to fix if the prices aren’t compatible with the community desires.
“As I’ve always said, ratepayers have to pay just about everything back. So what’s the low-cost money for our consumers?” he said, referencing the prioritization of state grants and state loans in the project. “I think it’s going to miss the mark and that’s what’s disappointing in the project.”
While he avoided diving into politics, he said that the current attitude and direction the project has been has been worrying.
“The way that the process has gone on I think has caused delays, I think possibly missed approaches, money has been spent on a lot of effort that had to be redirected,” he said. “They’re working hard, you hear, but we’re waiting for decisions. … I wish gas were coming into this community when it was proposed and for the price that was promised.”
Interior Gas Utility Board chairman Bob Shefchik had more confidence that price tuning could be possible, even if the number announced after the election doesn’t come out to what the community wants.
“AIDEA is using all the tools and authority provided by the Legislature to reduce those costs, and early November will provide costs and pricing we will all hope work for the community,” he said in an email. “I expect that if costs come in higher than targeted, AIDEA and the governor will continue to pursue ways to bring the costs down in order to achieve pricing targets. We will work with them to do that.”
Contact staff writer Matt Buxton at 459-7544. Follow him on Twitter: @FDNMpolitics.