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The gas line has been the dream of every Alaska governor for 50 years.

Is a deal finally close?

We believe the long.

Term solution is the big gas line.

And I.

Think we've got some good news to talk to the people of Alaska about that.

Alaskans need a stable supply of energy for the future, and revenue from the resource.

Is the time finally right, or do the billions needed to build it make the project too expensive?

We'll discuss it right now on Alaska Insight.

Good evening.

We saw footage of the Trans-Alaska pipeline in the opening of our program.

The success of Taps is well documented, and for decades, Alaska leaders have hoped that the financing would finally pencil out.

And a liquefied natural gas LNG line would also be built.

But projects in other countries, and the advent of shale oil and gas production in the lower 48 has made the extreme investment needed for the Alaska Prospect just too costly.

Once again, there is a project being discussed.

The governor and other leaders are excited and a new development partner has taken the lead.

So what has changed and will it finally result in a gas line or not?

Tonight we'll hear more about the potential and the cautions with this massive project.

Before we get to that discussion, here are some of the top stories of the week from Alaska Public Media's collaborative statewide news network.

Governor Mike Dunleavy is once again threatening to veto a compromise bill intended to boost funding for the state's public schools and make a variety of policy changes.

As of Friday morning, Dunleavy had yet to make the threat publicly, but multiple superintendents of school districts around the state confirmed that on a Thursday, Telecon with school district leaders, the governor signaled his intent to veto the bill and potentially line item veto the funding boost.

Later, if his veto is overridden, unless specific policies are added.

The current bill would add $700 to Alaska's base student allocation formula and make a number of policy changes, including a cell phone ban and incentive grants aimed at boosting breeding performance.

But there are two specific policies the governor has repeatedly called for a statewide open enrollment system, as well as changes to how charter schools are approved that have not been added.

While lawmakers appear to have the 40 votes necessary to override a veto of the bill, line item vetoes from the budget require 45 votes, and it's not clear that enough legislators would vote to do so.

Also this week in Juneau, the Alaska Senate approved its version of the state budget on Wednesday, including a $1,000 permanent fund dividend and for now, a $150 million surplus.

But senators say they expect that surplus to evaporate in the year to come in an effort to avoid using the state's $2.8 billion savings account.

Senators stripped out nearly every budget increase requested by the governor and those approved by the House in its version of the budget last month.

In total, the Senate's version of the budget is $350 million less than what was approved by the House and 1.7 billion less than what Dunleavy had proposed.

A combination of reduced federal funding and low oil prices that are expected to drop even further have led to the poor fiscal outlook for the state.

The planned $1,000 dividend would be the lowest inflation adjusted dividend in state history.

Former state Senator, Bishop of Fairbanks and current Lieutenant Governor Nancy Dahlstrom both filed letters of intent on Monday to run for governor in 2026.

They're the first two candidates to throw their hats in the ring for the campaign to succeed Governor Dunleavy, who is finishing his final term.

Bishop said in a phone interview that he is still developing his policy platform, but that affordable energy is currently his number one priority.

Dahlstrom listed the state's dire fiscal situation, the economy, education and public safety as especially important issues to her.

She also echoed some of Dunleavy and President Trump's priorities, including resource development.

Dahlstrom said she plans to stay on as lieutenant governor and work on the campaign during nights and weekends.

You can find the full version of these and many more stories on our website.

Alaska public.org, or download the Alaska Public Media app on your phone.

Now on to our discussion for this evening.

The Alaska gas line dream has been as elusive and mythical as Bigfoot and may be just as difficult to lock down.

But hope for some Alaska leaders.

Springs eternal and governor Mike Dunleavy is more optimistic than in the past that the right combination of investors and buyers will finally sync up.

Here's what the governor had to say in March about the gas line prospect.

I don't think we've been closer to a consummation of a pipeline, in our history, a lot of us are feeling confident that this is going to move to a concrete pipeline being built within two and a half years that will bring gas to Alaskans.

However, words of confidence from state leaders regarding the prospect of an Alaska gas line stretched back many, many years.

Let's review.

Alaskans have been waiting a long time for a pipeline to take North Slope natural gas to market.

Can you tell us what chances you believe Alaska has to get its voice heard for a trans Alaska gas pipeline?

I think the chances are very good.

In fact.

Excellent.

This is not just Alaska's pipeline to Valdez.

This is Alaska's lifeline to the future.

We began a nearly $40 billion natural gas pipeline to help lead America to energy independence.

For the first time in Alaska's history.

All the necessary parties have aligned to make an Alaska gas line project.

Go, Alaskans.

Now, as oil is declining, as we're brokers, we're talking taxes, cutting dividends.

There's more of an urgency or perceived urgency.

We have a gun to our own head on our fiscal situation.

It's time to monetize our resources.

Alaska has got to have a gas line project.

Joining me tonight to clarify what it would take to build an Alaska LNG line, and whether it's really closer to reality or not.

Is former U.S.

Senator Democrat Mark Begich.

Senator Begich is a supporter of the gas line and has been working with the Alaska Gas Line Development Corporation, ADC.

Senator, thanks for being here.

Thank you very much.

Also with us this evening is Rodger Marks.

Rodger is an economist now in private practice.

But Mr. Marks was a senior economist for the state's Department of Revenue tax division for 25 years.

He wrote an opinion piece for the Anchorage Daily News in April that raises numerous concerns about the current proposal.

Thanks for joining us, Rodger.

Thank you Ari.

So, Senator, I want to start with you.

You've been working for about five years with ADC.

Last year, the project was sort of on life support, and now there is new excitement among supporters for the project.

Why?

There's yet no financial commitment on the investment or purchase side.

What gives you this confidence?

Well, I think there's a couple things that have changed.

When you saw those clips, that of all the different governors saying things, first off, it wasn't until 2015 that gas was actually available for offtake to the LNG project because it was used for re injection for oil production.

Second, not until 2020, where all the permits in hand.

So again, even though there was a lot of past governors that said let's get this going.

Critical parts of the equation were not there.

Then you add in the war in Ukraine and the desire by people to get off of Russian fuel, which is an important part to the Pacific Rim.

And then southcentral the rail belt cooking at running out of fuel.

Those combinations of things have now put this into a different light.

And last year in front of the legislature, there was a big desire by the legislature because a lot of them were concerned about are we just spinning our wheels?

And so they requested a report to be done at their request to their legislation by a company called Wood Mackenzie.

That's an international company that does pricing and looks at all these projects.

And they compared it to LNG because at the end of the day, there's only two choices coming for Alaska.

One, we're going to import all our fuel from now into the future, or we're going to import for a short period of time and produce our own fuel.

There's no other magic bullet here.

This is it.

And so the question now is, can you do it in a cost effective way?

And the last thing I'll say is, you know, we have a private company, not a bunch of government officials kind of calculating out the costs or legislators claiming things or whatever.

It's now down to a private sector company that is putting the money up to do the next stage of analysis to determine the cost effective for this project.

Thank you for starting us off there.

Will drill down a little bit more there on that company.

Glenn Ford.

Roger, you said in a previous interview that we are years away from a good cost estimate, but the company taking the lead, Glenn Farm Group, expects to have the cost estimate, possibly by the end of the year.

Why do you think it would take years to develop a realistic cost?

Well, in in developing these mega projects and this is this is, a mega, mega project, upwards of $50 billion, probably.

Developers have discovered over time that that the big enemy enemy of these is cost overruns.

And and they can destroy a project and to, to, reduce the risk of cost overruns.

They have found it's necessary to develop a project and what they call stages or gates where you, estimate the costs and see what's going on and estimate some more costs, and you need to spend, a great deal of money to get to the place.

Or you can make, you know, an investment decision.

And general, no rules of thumb are you need to spend 5 to 10% of the total project cost to get to a place where you can, decide whether you're going to make a final investment decision and in this case, we're talking, you know, upwards of $3 billion is going to be necessary before a serious investment decision by serious investors can occur.

And and, you know, nothing close to that has been spent yet to get to that point.

Senator, some I think Mr. Marks here is among them have criticized Glenn Farm Group, saying they have not led such a massive project in the past and are concerned that they don't have the expertise for this.

What do you say to that criticism?

What gives you confidence that they can do this?

Yeah, I think, you know, Glenn Ford has done projects, but also I would put it this way, don't assume that Glenn Ford is going to build the pipe, build the gasification, build integration there.

They're like a quarterback to a team.

They're going to bring these pieces together just like any developer in any project.

I appreciate Roger's comments, but the fact is, who are you going to look toward to figure out the pricing of a project?

That's I'm not going to look to the government, not even going to look to consultants, the private sector, who wants to build a Glenn Far and is committed up to 150 million, on top of almost a billion plus that the past producers and the state have invested in this.

So there's a lot of data that's already there.

The question is, do you you know, look at it, you're going to update it, you're going to revise it.

But, you know, if you have a private company that says we believe by the end of this year, with the data that's already there in the $150 million of their money that they want to invest in doing the feed, that they can come up with a decision, I'm going to play on that side of the equation, because lots of times we spend our time spinning the wheels, thinking about what's possible.

Well, now it's here.

And what we anticipate.

Glenn Foreign will pull together pieces from the people who, you know, there's a pipeline company that's already shown some commitment to this project financing, construction, everything.

They'll bring the pieces together as a developer would do.

That's how a developer works.

They don't do it all.

They bring the pieces to develop the project.

Former federal pipeline coordinator Larry personally has said that when an Alaska LNG gets to market, it comes down to price, competitive pricing.

Can the producers in the state put together a project that is price competitive?

That's the more than $40 billion question.

How does that happen?

The competitive pricing.

Yeah.

Let me yeah.

Let me clarify.

When you said the producers, the producers have nothing to do with this other than provide the offtake the fuel.

Thank you.

Right.

Glenn Farr and we'll figure out that project.

And here's what we know.

When you look at the wood McKinsey report, they compared LNG import to the state and where we would place this project not only for our internal use but export.

And you're right, in the same range.

You know, if we import, it's going to be from ten, 20 to 13.5 per, per unit.

If you do LNG and utilize for in-state, it's anywhere from $9 to 1280.

That's an innovative group, not the state, not an economist not messing around with a piece of paper, pretending that I know all those details.

They did it through an extensive study.

We also are you know, when you think about the distance between us and Asia, if you're going to get fuel LNG and you get it from the Gulf of Mexico, it's about 24, 26 days from Alaska, it's seven.

Oh, by the way, you're not going through the Panama Canal, which may be close one time because a ship blocks it.

All those expenses.

Australia is the other choice they have.

Australia now is having some restrictions in their capacity.

But they're also again, Alaska is faster.

And one other element that is a total game changer in many ways, the effort by companies or its governments to get off of Russian gas is high value right now.

People want off of that.

And Asia was a high use of some of that gas.

Roger, your job in the 80s for the Department of Revenue was to analyze the feasibility of commercializing North Slope Gas.

You wrote an opinion piece for the Anchorage Daily News in April titled, Can the Alaska LNG project be coerced into existence?

Coerced?

Interesting choice of words.

Describe what you were trying to relay there?

Sure.

I think it's it's kind of important to just look at the fundamental economics of the LNG project.

You know, the world LNG market, it's very large, very competitive.

There are lots of countries that are competing to sell gas into the Asian market.

And in in all these places are nearly all these places.

The source of the gas is sitting right at Tidewater and with Alaska.

The problem is, the gas is 800 miles away.

So you have to build, you know, an 800 mile pipeline, very expensive.

You have to build very giant compression stations along the way.

In addition, North Slope gas has as much higher CO2 content and then a lot of other gas around the world.

So very expensive conditioning and treatment is necessary to remove the CO2.

And again, we're you know, we're the cost estimates that are out there now are preliminary.

But just given what's, what's out there in public, those, those costs are upwards of $30 billion or more.

Just the pipeline and conditioning to get to a place other all the other projects begin.

It's you're $30 billion behind the starting line.

And, you know, it's quite understandably Asian customers are not, you know, very happy about about paying $30 billion more for gas.

And they would from from gas from somewhere else.

And so there was, you know, up to several months, a few months ago, there is very little interest in this project.

The ag DC board itself last year was ready to throw in the towel and, and now what's changed is you have a new administration that that's talking, you know, and, using trade threats as a way to, you know, leverage the project.

And so, you know, before there was very little interest because of the fundamentals of this project.

Now, you know, the Asian companies are talking about it, but a lot of their talk is about complaining about the costs.

So relative to a few months ago, fundamentally, nothing has changed.

All we have, you know, the any movement that has happened is not on the merits of the project, but on you foreseeable leverage involving trade.

And so, you know, the question is, can can, Asia be, you know, coerced or coerced into doing a project they don't really want to do?

So I want to get to the tariffs, issue in a minute here.

But before we move to that, you, Roger, have said that the distance is the Achilles heel of this project is for no other way to move that gas.

Could could there not be a line built there considering a deep draft port in Nome?

That line would be 600 miles.

I realize that there's ice in the winter, but would it be cheaper to build storage facilities and ship the gas in the summer than to go 800 miles?

Well, the pipeline, is there no other way that this could get done?

I am assuming, the good people in the private sector, if that, if that, would have borne fruit that that strategy would have been pursued.

But it's, there are very serious technical challenges to shipping LNG out of Arabia.

The North Slope or No are also.

Yes.

I also, you know, remember that one of the first tasks we have here is South Central.

The rail belt is running out of fuel.

The fundament question we have is Alaskans is we have two choices, as I said, are import LNG for the rest of our life from who knows who, where or import for a short period while we build the line.

And I would differ with Roger what he said there.

The pipeline project by itself is 14 to $16 billion and does not need the compression as you described, because the Great Bear fine, which is reason.

I mean, that's the thing.

A lot of things have happened.

The Great Bear has already committed to the pipeline for less than a dollar or a unit to provide because they don't want their gas and it doesn't need compression units.

So you can do the pipeline with the existing current consumer users in the state and make it economical, according to the wood McKinsey report.

LNG export adds additional value and lower cost for Alaskans.

We're in a different stage.

I clearly hear what he's saying.

But those days of four years ago, five years ago have changed.

And plus there has been a lot of interest.

A difference has been under this governor and others is they have not disclosed all this out there in the sphere because people just poke at it.

And what happened last year?

We took the bat basically.

The board said, we'll show you the legislature, we're going to bring a project.

So we'll take the bat.

You don't want us after.

We can't get some done.

Make your decision, but we're going to show you.

That's why now it's more public.

You know, you got Tyler and they just here this week.

Taiwan has already signed a MoU of agreement.

These are new players to the game that we're not here.

But could it be that Taiwan and Thailand are saying they'll commit giving letters of under, you know, a memorandum of understanding an agreement.

But there's no money on the table yet.

Could this just be them saying, hey, we want to we want to consider your gas because they're trying to work out a trade deal that avoids a bunch of tariffs.

Very possible.

But I would say this there's this is part of trade deals now under this current president, under Biden, under Obama, under Bush, they all have trade deals that deal with product inventory pricing on a variety of commodities.

That's how it works.

And the reality is, this project, we can show to our customers in Asia, it is competitive and they want to buy from Australia.

They want to buy from, the Gulf of Mexico.

This beats that.

And the other thing is it is better if you're in these countries anyway.

And I actually supported this concept when I was in the Senate because our allies should be buying our fuel, not Russia, not from an enemy of this country and them.

So this is actually came at a right time.

And and I would say this.

Yes, you start with an MOU to lay out the parameters.

The difference is you have now Glen foreign that is pulling the line in negotiating the countries.

You're not going to read about them every day because when you do that, you lose the ability to negotiate the right pricing, but you will hear about them when they get concluded.

Roger.

The current estimate is 44 billion for the entire project, all three phases.

What do you think the effect of tariffs could be on that cost?

They could be considerable, depending whether, whether they're steel, if steel and imported steel, could be it could be considerable.

I didn't know I have not looked at piece by piece and tariff by tariff and where everything comes from.

But if, you know, a significant part of the part, you know, project or parts of it are need to be imported at a minimum, they're subject to 10% tariffs.

That could, you know, put that, put that $30 billion, behind the finish line, you know, up to 40 or more.

If investors riders showed up tomorrow and said, give us project certainty and will invest the billions needed, can that happen?

Can there be long term certainty for this?

Or could a new administration come in after President Trump and say, hey, we're canceling your permits, stop building the gas line?

I'm thinking about what happened to the car companies moving toward retooling their facilities to build electric vehicles, only to see that change when the Trump administration ca Well, you know, a lot of what the Trump administration is doing, you know, generally tariffs, you know, they're there to do things, you know, like revive manufacturing or defend against unfair trade practices or maintain security or protect emerging industries.

So the Alaska LNG project does none of those things.

They just address trade imbalances and, you know, trade imbalances are not a bad thing.

We know we pay.

We pay for things and we get stuff.

You know, there's a joke that, you know, I run a trade imbalance with my barber, but he doesn't buy anything from me.

And.

And the U.S. is running trade imbalances with with over 100 countries now and if you try to implement those country by country, and, you know, there's a risk unleashes a pretty volatile system.

And if it can only be reinforced, you know, by by strong arming because countries really don't want to, again, spend $30 billion more for gas.

And they have to it creates you know, the kind of instability we saw a few weeks ago that blew up, you know, blew up financial markets and caused you ministration to have to walk back that whole tariff approach.

Can I just say one thing on the.

Yeah, on the this is what's unique about this project.

And you mentioned what would happened with the next.

Well, there's no two polar opposites than Trump and Biden.

Biden actually supported the project through the permitting process.

When there was litigation, the Biden administration supported the Alaska LNG project through the court system, so they helped get the permits.

Then you have Trump coming in completely opposite, and he's supporting the project.

There's a reason it's not only national security, it's Alaska's security.

And it does have an impact, a balance of trade.

And I would say the $30 billion issue that Roger talks about through the wood Mackenzie, report, they use the number 44.

They use the higher number in that report, capitalizing that cost.

The loan costs, the interest costs, all the related costs of that project are built into this pricing, and it is competitive.

So a lot of people, what I've learned over the last couple of years, especially a lot of people are working on old information.

And it's because, frankly, the the, Alaska Gasoline Development Corporation has been very quiet the last two years in trying to develop all this information.

I wish we had an hour for this discussion because there's so much to go over.

Thank you both so much for being with us this evening.

Thank you.

Signing a gas line deal comes down to a lot of investment and a lot of commitment from buyers to make it financially feasible.

We know that our state needs a steady supply of affordable energy for residents and businesses into the future to help grow the economy here.

And income from LNG sales would also bolster Alaska's declining revenue from oil.

But until there are real dollars put forward to get the massive project started, the pipeline will continue to be more a desire than a solution to our growing energy needs.

That's it for this edition of Alaska Insight, visit our website.

Alaska public.org for breaking news and reports from our partner stations across the state.

While you're there, sign up for our free daily digest so you won't miss any of Alaska's top stories of the day.

Thanks for joining us this evening.

I'm Lori Townsend.

Good night.