November presidential election critical to secure Alaska’s energy future, Gov. Dunleavy reports at CERAWeek
(WO) – During CERAWeek by S&P Global’s fourth day in Houston, Texas, Vice Chairman Dan Yergin sat down with Mike Dunleavy, Alaska’s Governor, to discuss the future of Alaskan energy.
Alaska’s “extraordinary” resource potential. During the discussion and following press conference, Gov. Dunleavy made it clear that Alaskan resources are “extraordinary” due to the state’s unique location and history.
As one of the last states to join the Union, Alaska was attractive due to its incredible resource potential. According to the governor, Alaska’s proven reserves include over 100 Tcf of natural gas and billions of barrels of oil.
Additionally, the state has 500 years of coal reserves, and is quickly becoming a renewables hub due to its 150 active volcanos, legislative progress surrounding carbon capture and storage (CCS) and immense tidal power potential.
Alaska is a known resource powerhouse, leading to highly successful exploration campaigns. The state also pioneered LNG exports and has already received FERC approval for Alaska LNG projects. The resulting gas transport is expected to boost Asian energy security, as customers in Japan and Korea express interest, Dunleavy said.
Development suffers under unsupportive administration. However, Gov. Dunleavy also made it clear that the Alaskan energy sector is suffering under the Biden administration. 63% of Alaska is on federal land, leaving undiscovered resources at the mercy of the U.S.’ widely reported permitting problems. Additionally, the governor reported a whopping 56 actions taken against Alaska since the start of the current administration, making resource development challenging.
When S&P Global’s Yergin asked about those 56 actions, the governor reminded the audience that Alaska’s original purpose was resource development. However, the general public, under the current administration’s extreme environmental agenda, has lost sight of this, instead viewing Alaska as a “pristine” national park that shouldn’t be touched.
Of course, the governor also had thoughts on Biden’s controversial LNG export pause. Like many this week, Dunleavy sees the pause as a political stunt and is concerned about the uncertainty the implications create for shareholders. If a new administration takes control of the White House, Dunleavy expects activity to climb. However, another four years of Biden will have negative consequences on long-term investments and create problems for future developments.
Alaska’s energy future remains bright. Still, Gov. Dunleavy remains hopeful. The passing and sanctioning of ConocoPhillips’ Willow project and progression of recent discoveries like Santos’ Pikka play have brought Alaska’s oil and gas industry back into the limelight. The governor also discussed work on a large natural gas pipeline to bring supply to Asia.
This resurgence in oil development will significantly increase pipeline capacity in Alaska, especially as projects like Willow and Pikka come online during the back-half of the decade. Come November, Gov. Dunleavy sees quicker progress and development if the current administration is ousted, an outcome he believes is highly probable.
Other obstacles. Aside from regulatory problems, the main obstacle plaguing Alaskan resource development is infrastructure, which is exacerbated by the state’s remote location.
Alaska is also the only state whose resources are collective under the sovereign. Instead of landowners holding mineral rights, the state does, creating further bureaucratic roadblocks.
The governor also pointed to a general lack of understanding about Alaska’s resource potential and availability. Investors are waiting “for the next shoe to drop,” as Dunleavy put it, before making long-term decisions; changing the perception of Alaska’s energy state will help boost confidence and change public opinion.
Alaskan energy under Trump. Governor Dunleavy didn’t endorse another Trump presidency outright; however, it was clear who the governor thinks will be most beneficial to unlock Alaska’s resource potential.
Gov. Dunleavy revealed that the state was gearing up for more exploration until Biden took office. Since then, the state’s energy sector has experienced hurdle after hurdle. Dunleavy expects a radical change if Trump finds himself back in Washington, just as the tides shifted under Biden’s administration.
Ultimately, Alaska could be the solution to the nation’s problems, provided the state gets a more favorable view in the White House and permitting reform occurs. Artificial intelligence will help streamline some of the bureaucratic work, allowing agencies like the Environmental Protection Agency to interpret data that shows the effects their policies have.
So, there appears to be several silver linings keeping optimism around Alaska’s energy future afloat. Unleashing the state’s vast resources depends on the outcomes of the next presidential election. Until November, Alaska’s role in U.S. energy security and leadership hangs in the balance.
