Lawmakers: Is Permanent Fund part of LNG plan?
Alaska lawmakers this week have been getting detailed updates on Gov. Bill Walker’s plans to ship North Slope gas to Asia.
Thursday was the Senate’s turn to get a briefing on the proposed $43 billion project designed to export gas to Asian countries.
Understanding the project requires navigating a complicated series of charts, spreadsheets and graphs.
But Sen. Natasha von Imhof (R-Anchorage) took the discussion to something close to Alaskans hearts and bank accounts: the Permanent Fund.
Von Imhof, who serves on both the Senate Resources and Finance Committees, asked Alaska Gasline Development Corp. President Keith Meyer if there are plans to tap the Permanent Fund to finance the project. The fund is currently valued at $66 billion.
“The state, in my mind, has the first option to invest,” Meyer told members of both committees assembled for the two-hour hearing. “I don’t care necessarily where it comes from. I would encourage them to look at it, but we have no expectation at this point that funding would come from that source.”
Still, von Imhof pressed.
“So you will not actively pursue Permanent Fund investment?” she asked Meyer. “You will wait and see if the board of trustees come to you-- is that what I’m hearing?”
Meyer replied, “I think they ought to be interested enough to come and take a look at the project. Just to be clear, we do not intend to have the Permanent Fund to be a funder of the project. Don’t intend to exclude them either.”
After the hearing, von Imhof remained concerned about the Permanent Fund's role. She cites a possible change to the fund’s Board of Trustees could be imminent with Board Chair William G. Moran’s term expiring this year. Additionally, Walker recently appointed his former business partner, Attorney General Craig Richards, to the board.
“When you’re stacking the board sympathetic to your cause, what’s stopping the Permanent Fund from being a significant investor in this project?” she asked. “Alaskans need to pay attention to Permanent Fund appointments. They matter."
Late last year, the state signed agreements with China’s state-owned oil company, Sinopec, and two Chinese financial institutions. They agreed to help Alaska advance the project, but the agreements did not come with any financial commitments
It’s left some lawmakers questioning whether China is a serious partner.
Meyer said after the hearing that the agreement reflects a staged approached -- or a “development path” – toward construction that he hopes can begin the second half of 2019.
“Last year we spent time engaging with customers,” he said. “We had to build awareness that Alaska, in fact, has an LNG project. This year we are focused on paperwork with specific customers and that will take the better part of the year.
“There is a slight surplus of LNG in the global but the demand is continuing to build. The demand was particularly acute five or six years ago. But the market continues to grow, particularly in China where they look at shifting coal consumption to natural gas.”
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