It’s supposed to be a lifeline for Alaska’s economic future. But can the state’s efforts to ship North Slope natural gas overseas withstand an emerging trade war with China and a saturated market? 

State lawmakers on Wednesday discussed those prospective hurdles with Gov. Bill Walker’s gas line team in Anchorage.

Members of the Senate and House Resources committees received their quarterly update from the Walker administration on a $43 billion liquefied natural gas project.

Like many of his predecessors, Walker has his own plan to market more than 30-trillion cubic feet of natural gas. His plan calls for shipping North Slope natural gas through an 800-mile pipeline for export to foreign markets with China being the lead customer.

Alaska has already signed several non-binding agreements with Chinese banks, investment funds and industry companies.

Much of the discussion featured granular presentations from the Alaska Gasline Development Corp., the Department of Natural Resources and the Department of Revenue.

But, high profile concerns-- especially those speaking to international trade-- were also raised.

Frank Richards, of the AGDC, told the legislative panel the state remains on schedule to begin shipping gas around 2024-2025.

Asked to address the growing tariff discussions, he also told them purchasing raw steel from China would be subject to tariffs but not fabricated steel products.

With the construction timeline still several years away, lawmakers don’t seem as concerned about tariffs affecting the gas line as much as other transactions.

“We think of it immediately as a gas pipeline impact,” said Senate Resources Committee Chair Cathy Giessel, “We have oil projects on the North Slope that use steel pipe and they are having to go to other sources to keep cost down and the steel is failing about 30 percent of the time. They are having to reject steel from other countries.”

After the hearing, Giessel also addressed ongoing concerns over whether Alaska can forge its way into a global market that seems to be over-supplied.

“You know, one day we hear there is a shortage of supply down the road; other days we hear that there is so many projects that supply is going to be met and there will be extra,” she said. “It is a concern. That’s why we have consultants always keeping us up to date on the world’s markets.”

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