The state of Alaska is seeking ownership of the AK LNG Project in Nikiski and the most asked question raised at last night’s informational session with Borough Mayor Mike Navarre and Oil and Gas Specialist Larry Persily was the affects this would have on the peninsula.
If Alaska were to take over the project, they would attempt to do it cheaper than BP, ExxonMobil, and ConocoPhillips by simply buying the land. The land would then become state land and no taxes would be required to be paid to the borough. Alaska is also trying to avoid paying federal taxes, but Larry isn’t sure this can be accomplished. He also explains how not collecting tax on the property would affect the peninsula…
Persily: “The borough’s question is: if it becomes a state owned project, what about property taxes or, if you’re not going to pay property tax, some money in lieu of property taxes? Which is often negotiated in cases like this when the government says, ‘OK we don’t pay property tax but we’ll make payments in lieu of property tax.'”
In order for Alaska to take the project over, many things must happen first, leading many wondering how much longer this project is going to take.
Persily: “For the state to take it over, they’ve got to get the export authorization transferred, they have to have the FERC application put just in the state’s name, take the companies names off of it, the state has to somehow get title for an option for the land that Exxon, BP and Conoco have bought, they have to transfer the data, the state’s going to have to contract out and hire some people to do the work since the companies won’t do it anymore. So there’s a lot to be done. The state hopes they can get it all together and make an application to federal regulators by January.”
While the state aims to have applications done in four months, there’s a possibility it won’t be completed and they make back out so many asked, then what?
Persily: “As the mayor said, I think eventually, this will get built. There’s too much gas to just leave up on the north slope until the world blows up from a meteor strike. The companies want to get it off the north slope to sell it, they just felt that things were moving too fast in a market that just did not justify it.”
In the meantime, Larry and Mayor Navarre will keep information updated to the public as it becomes available, with a possible question and answer session again in February.
