Monday, November 27, 2017

Alaska Gasline Development Corporation (AGDC) Natural Gas Pipeline Agreement with China Sinopec.

The pipeline as envisioned would rival the famed trans-Alaska oil pipeline, a major project of a generation ago. This pipeline has been a dream for Alaskans for years, seen as a way to provide economic certainty as oil production from the North Slope declines.

  • Alaskans have long awaited the construction of a natural gas pipeline which has not yet materialized. Do you think that this new agreement will be the impetus for it to actually happen? 
  • Is China, with its links to North Korea, our friend or foe? 
  • Would the new pipeline impede the diversification of Alaska's economy and keep its citizens dependent on natural resources?
  • Would this new project solve Alaska's budget crisis
  • Would this project benefit Alaskans through lower energy prices?
  • What are the merits of the project? What are the weaknesses?
Alaska signs gas-pipeline project deal with China


1 comment:

  1. 1. I think this is the first time that a huge market has displayed interest in Alaskan natural gas. The previous players involved in the gas pipeline were businesses. Any sort of project to bring natural gas to market had to clear significant profit hurdles for the companies to want to invest. With China and its national oil company, you are in some ways eliminating a middle man and dealing directly with the end consumer. China is looking to safeguard their development as a world superpower by investing in cheap, reliable, relatively clean energy. They are incentivized to bring the gas to themselves.
    2. China is China’s friend. We are our own friend. The bottom line is that no country is going to bat for any other country unless its own interests are at stake. So the better question is that is it to China’s advantage to be our friend or foe? I have absolutely no doubt that China will cut North Korea loose if the winds turn. How do I know this? We’ve done exactly the same thing to our allies, and we’re the good guys, right? Just ask our Syrian allies about the “Red line,” Ukraine about our security agreement with them in 1994, the many combat translators in Iraq and Afghanistan who saved American lives who we have now all but abandoned our promises to, the Cuban Democratic Revolutionary Front our CIA encouraged and then watched as they were destroyed at the Bay of Pigs, our friends in Saigon we left holding the check in 1975, and even our allies in the Pacific and Europe that suffered due to our isolationist policies after WWI. At some level, we made these decisions with horrible, negative outcomes for thousands, if not millions, of people because, in the end, it was better for Americans. China will not be led by the nose into conflict with the U.S. by North Korea by that same logic.
    3. Alaska’s economy is stuck. We are not a dream location for most people/companies. We have an intemperate climate with cold winters and hot summers. We are located far from most large markets, and our infrastructure is not particularly good. Companies go to places because they want something, and companies only come to Alaska in spite of Alaska. They come here because we have the raw materials that they want, and they don’t want to invest in the infrastructure that would allow Alaska to benefit from the huge sums of money that come from refining our natural resources to much more profitable end products. They do that in warmer places that are closer to big markets. It’s time we either change that problem, or continue to be courted by companies only when they see an opportunity to a raw material, rather than the people/services provided within the state. I’d also point out that while we do have enormous amounts of raw resources, it is a finite supply. A lot of our natural wealth is non-renewable or takes a significant amount of time to replenish itself if managed improperly. A lot of people seem to deny this reality.
    4. The new project would most likely be encouraged with tax breaks and subsidies and partial funding by the state. This would actually probably drop us further in the hole before we start climbing out.
    5. This would likely benefit Alaskans through lower energy prices. Supply would definitely go up, but I think the price of the natural gas would be globally determined, and I do not think our production would be so great that it would allow us to significantly affect global prices of natural gas.
    6. The primary strength of the plan is a huge check to the state of Alaska. We can do a lot with that money, not least of all funding our higher institutions of learning properly. The weaknesses are significant, too. We would literally have a highly pressurized highway of compressed fuel running the length of our permafrost ridden, seismically active state. To put it in simpler terms, do you want that in your backyard?