Tall stack of authorizations await Alaska LNG project.

Author:White, Bill

The multibillion-dollar Alaska LNG project aims not only to tap the North Slope's bounty of natural gas, pipe it to tidewater and super-chill the vapors into a condensed liquid for export to Asia markets.

The project also aims to tap a bounty of public resources: land, wetlands, gravel, lakes and ponds, streams and rivers, possibly even the ocean itself. And to tap them, the project sponsors would need a stack of permits and authorizations from a variety of government agencies.

During construction and operations, the system's machinery, like any industrial activity, would create emissions that would alter air quality. Public soils and vegetation would be disturbed, at least temporarily. The project would cross paths with threatened and endangered species, and other fauna under public protection.

The project's sponsors cannot use the public's land, water and other resources without permission. It can't change the air quality or water quality without a public process finding that such changes would be acceptable, findings that likely would come with strings attached.

The project's pipeline can cross the Yukon, Tanana or Susitna rivers only after demonstrating this won't impair the navigability of those waterways.

The gas liquefaction plant cannot start production without a determination that it can be run safely.

The gas itself cannot be shipped away from the United States without consideration of whether the export would harm U.S. consumers.

Even the president, under a 1976 law, would have a special say on the export of North Slope gas, a unique feature of the Alaska project that doesn't exist for Lower 48 liquefied natural gas projects.

To say that the Alaska LNG project would need federal paperwork is to understate the matter, like saying the Pentagon is roomy or monsoon season is damp.

The sponsors know the task ahead to receive the authorizations needed for their project. And they have begun gathering the environmental data regulatory agencies will want to see.

Permits Before Construction

More than a half dozen federal agencies would issue major authorizations for the Alaska LNG project before construction could begin. These include:

* Federal Energy Regulatory Commission--to authorize siting, construction and operation of the LNG plant and likely the 800-mile pipeline from the North Slope to the plant. FERC also would take the lead on a consolidated environmental impact statement researched and written on behalf of itself and other federal agencies.

* Bureau of Land Management--to grant use of federal land for the pipeline, construction camps, staging yards, gravel mining and water extraction.

* U.S. Army Corps of Engineers-to issue dredge and fill permits pertaining to wetlands, rivers and offshore areas.

* Environmental Protection Agency--to permit disposal of sediment dredged from the Beaufort Sea if needed to create a deeper shipping channel for sealifts to deliver construction materials and equipment to the North Slope.

* Fish and Wildlife Service and National Marine Fisheries Services--to authorize isolated incidents of harm or death of marine mammals, endangered species or other protected animals.

* Pipeline and Hazardous Materials Safety Administration--to ensure the gas pipeline would be built and operated to federal safety standards.

* Coast Guard--to ensure any bridging of rivers would not impair the waterway's navigability, document the suitability of Cook Inlet to handle LNG tanker traffic, consult with the project sponsor on the LNG terminal's emergency response plan and approve the terminal's security plan.

* Department of Energy--to authorize gas exports.

Other federal agencies could lay their fingerprints on the project, too. For example, the Federal Communications Commission for radio communications, the Federal Aviation Administration for building or altering airstrips, Homeland Security for the vulnerability of facilities to attacks, or the Bureau of Indian Affairs for rights-of-way on any Alaska Native allotments the pipeline could cross.

State of Alaska agencies would have the lead on air, water and wastewater permits, under authority delegated from the EPA, as well as use of state land.

Federal agencies and the project sponsors also must consult with the Alaska Historic Preservation Office on any historic or archeological sites the project would encounter during construction. Part of the project's field-season work in past years has been to identify such sites so the pipeline route and other land use can skirt them. Encountering them during construction could involve delays while preservation officers decipher a site's significance.

Deja Vu, And Then Some

Federal agencies have seen Alaska North Slope gas projects before. Over the years, quite a few of them have burst into headlines like supernovas, before eventually flaming out.

For the most recent proposal to pipe North Slope gas through Canada to North American consumers, about two dozen federal agencies had lined up for permitting work before the pipeline sponsors shelved the project in 2012.

The Alaska LNG export project would engage many of these same agencies. A substantial portion of it is essentially identical to the project to serve North America: A huge plant at Prudhoe Bay to cleanse produced gas of impurities, and half of the pipeline route--as far as the Fairbanks area.

Alaska LNG proposes a $45 billion to $65 billion venture that would be one of the world's largest LNG projects.

The 800-mile pipeline would carry up to 3 billion to 3.5 billion cubic feet of natural gas per day. After Alaskans, the pipeline compressor stations and LNG plant at Nikiski consume some gas, the plant would have the capacity to make 17 million to 18 million metric tons a year of LNG, about 2.2 billion to 2.4 billion cubic feet of gas a day.

The sponsors are the main North Slope producers--ExxonMobil, ConocoPhillips and BP--as well as pipeline company TransCanada and the state of Alaska. (TransCanada and ExxonMobil sponsored the 2012-shelved pipeline to Canada. ConocoPhillips and BP also sponsored a project to move North Slope gas through Canada that couldn't pass the economics test and was dropped in 2011.) They are in the pre-front-end engineering and design phase, or pre-FEED, which is expected to be completed in late 2015 or 2016. If the project looks financially viable, next would be FEED of perhaps two years or so, when many of the pre-construction federal authorizations would be obtained. Construction could start toward the end of this decade if the project keeps progressing.

Below is a brief guide to the federal agencies that would be involved with the major Alaska LNG authorizations.

Federal Energy Regulatory Commission

This commission would do some of the heaviest lifting in overseeing the Alaska LNG project.

It would authorize the siting, construction and operation of the LNG plant and related facilities and take the lead in crafting the environmental impact statement that multiple agencies require for their authorizations.

It's likely that FERC would consider the 800-mile pipeline and the gas treatment plant at Prudhoe Bay as "related facilities" to the LNG plant in preparing a single environmental impact statement. The argument would be strong that these would exist primarily to feed gas to the LNG plant, making them integral to the plant's function. FERC won't consider and decide whether they're related facilities until the Alaska LNG sponsors ask the commission for permission to pursue the LNG project. FERC would have to interpret the legal definition of "LNG terminal,"...

To continue reading