Editorial: Alaska LNG deserves support

May 1, 2023

The US Department of Energy (DOE) last month approved exports of LNG from Alaska to countries not having a free trade agreement (non-FTA) with the US. The LNG would be produced using North Slope natural gas at a 20-million tonne/year plant being developed in Nikiski, Alas., by the state’s Alaska Gasline Development Corp.

Non-FTA export approval for Alaska LNG was first granted in August 2020 by the Trump administration. But subsequent litigation prompted a supplemental environmental impact statement (SEIS). Issued in January 2023 it generally confirmed the initial EIS’s findings. DOE did, however, modify its approval by prohibiting the venting of any CO2 produced as a byproduct “unless required for emergency, maintenance, or operational exigencies.”

The path ahead

Even as the world moves through the current energy transition, it’s going to need to consume large amounts of natural gas. It makes sense, however, to limit the emissions involved in doing so.

The prohibition of unnecessary venting was a nod in that direction. But the project as a whole takes more substantial strides in reducing the impact of continued natural gas consumption.

Between them Japan, South Korea, and China have most of the world’s LNG import capacity. All are major industrial economies and Japan and South Korea have limited hydrocarbon resources. To the degree these countries (particularly Korea and Japan) need natural gas—and it’s a large degree for the time being—this gas needs to be imported as LNG.

South Korea produced 9 bcf of natural gas in 2019 and consumed 1.9 tcf. In 2021 it imported more US-produced LNG than any other country. The more of this gas that can come from Alaska, the better.

The shortest distance between the US Gulf Coast and China is 140% longer than the route from Alaska to China, greatly increasing emissions during shipment. The route from Alaska is also shorter than that from Qatar. Of major LNG exporters, only Australia is closer to Asian consumers than Alaska.

About 75% of the gas to be produced on the Alaskan North Slope for export as LNG would be associated gas—gas produced as a by-product of Prudhoe Bay crude production—compared with about 40% of gas converted for export on the Gulf Coast, further reducing Alaskan gas’s emissions impact. With about 2.55 bcfd of natural gas expected to be liquified by Alaska LNG and sent to Asia, the expected emissions savings versus the US Gulf Coast over the project’s 30-year lifecycle are substantial.

Optics vs. effectiveness

Alaska serves the environmental cause well because so much of it is unspoiled wilderness; the kind of stuff you can put in your promotional materials to elicit a visceral response. But aside from being an easy target, attacking this project is misspent energy.

Alaska LNG is the best US liquefaction project for both would-be Asian importers and environmentalists. The plant’s proximity to potential customers will reduce the cost of getting its output to market, while at the same time reducing the emissions involved in doing so. Given expectations that projected global gas demand will exceed current and announced export capacity additions, it is likely that any production not met by building Alaska LNG would instead by met by gas that was both dirtier to produce and dirtier to ship.

The key to limiting hydrocarbon emissions is to limit demand for hydrocarbons. Any efforts to address emissions by attacking the supply side of the process will serve only to raise prices, incentivizing other (potentially less responsible) parties to fill the supply gap instead.

There will eventually be a final LNG plant built. But for the sake of both the markets and the planet, those trying to accelerate the industry’s demise should choose a target other than Alaska LNG.