Wednesday, May 2, 2012

Unlike the Gov, Sen. Lisa Murkowski is trying to sell LNG to Japan

Senator Lisa Murkowski (R-AK) raised the prospect of Japan buying Alaska natural gas to overcome the shortfall in power generation with the shutdown of 51 of Japan’s 53 nuclear reactors after the 9.0 earthquake off of the coast of Japan last year. Sen. Murkowski spoke with Prime Minister Yoshihiko Noda at a State Department Dinner hosted by Sec. of State Hilliary Clinton. Sen. Murkowski is the Vice-Chair of the U.S. Japan Interparliamentary Group. Sen. Murkowski has used this opportunity and her position to discuss the prospect of using Alaska natural gas in Japan in her discussions with her Japanese counterparts in meetings over the last week.

Senator Murkowski is meeting today with the acting secretary general of the Democratic Party of Japan.

Senator Murkowski has also asked President Obama to support the export of Alaska natural gas to Japan and to write a letter to the Japanese Prime Minister expressing his support Japan’s purchase of Alaska natural gas.

Sen. Murkowski seems to be doing something that our Governor and his administration have not bothered with. Sen. Murkowski is attempting to do the Governor’s job of selling Alaska’s natural gas to a viable customer who needs a reliable, long term supply of LNG.

Unlike Governor Sean Parnell, has refused to meet with two Japanese delegations sent to Alaska seeking to discuss the purchase of Alaska natural gas. The week after the March 11, 2011 earthquake and tsunami that devastated Japan, a Japanese business delegation came to Alaska to meet with Governor Sean Parnell. Parnell refused to meet with them. The week of Feburary 27th , a Japanese delegation again travelled to Alaska and attempted to meet with leaders of the State government. Two members of the Japanese delegation met with Dan Sullivan, Commissioner, Dept. of Natural Resources (DNR). Nothing was disclosed by Sullivan regarding the discussions other than to say that the meetings were of an “introductory nature” rather than defining any business goals. Bloomberg was reporting that Japan was sending delegations to Louisiana and Texas to discuss the possibility of buying U.S. natural gas to meet their energy shortfalls from the shutdowns of their nuclear power plants. Meanwhile, the only meetings the Japanese were able to hold in Alaska were with the Commissioner, DNR, that produced nothing of any consequence. On February 29, 2012, Lt. Governor Mead Treadwell had dinner with the Japanese delegation. Nothing has been disclosed since regarding any outcomes of those meetings with State officials.

Alaska has a 41 year history of exporting natural gas to Japan from Nikkiski. This is a history and partnership that can be used to Alaska’s benefit in marketing our gas to Japan. Yet, Governor has ignored this opportunity and advantage. Keiretsu and face are major components of the Japanese business deal. If one has good keiretsu (business associations, dealings, reputation) and good face (character, reliability, solid, honest), then one is in a very good position to do business in Japan. Alaska has such a relationship with Tokyo Power and Light, the customer for Alaska’s natural gas over the last 41 years. Yet, our governor and our Legislature ignore this fact and act as if Alaska has no interest in Japan as a market. When Dan Sullivan went to Asia recently to inquire about the viability of a market for Alaska natural gas in Asia, he did not go to Japan. Like the all-Alaska natural gas pipeline to Valdez championed by Bill Walker during his gubernatorial campaign supported by both the Alaska Gas Development Authority and the Alaska Natural Gas Development Authority (ANGDA), the idea of selling gas to the one reliable, long term customer that needs it, Tokyo Power and Light, is ignored by the Parnell Administration.

One can only wonder what could cause the Governor and the Legislature to ignore a certain customer with a very real need? Japan has been paying as much as $17 per thousand cubic feet of LNG delivered to Japan. Domestic U.S. price of natural gas was recently $2.02 per thousand cubic feet. There is no domestic market for Alaska natural gas in the lower-48.

The portent of the return of 300,000 barrels of North Slope Crude oil to the oil terminal at Valdez by the Alaska Explorer 11 April, 2012 should be a wake up call that Alaska is facing much larger problems than just a competitive natural gas market. Alaska’s literal fiscal future is at stake with oil flowing through a pipeline that may have to be shut down, not because of a lack of oil on the North Slope, but because of a glutted domestic market for oil.

Alaska will become a much quieter place in the near future if our Governor cannot bring himself to kill AGIA, to end the fiscal idiocy of committing another $200 million to a pipeline concept that cannot make money, and commit the State to build the all-Alaska natural gas pipeline to Valdez. Negotiating the best price for our gas and a long term commitment with Tokyo Power and Light and Mitsubishi would give Alaska the anchor customer necessary to finance the project.

Governor Parnell and this Legislature have done an incredible job of ignoring reality. That reality is about to bite all of us in the proverbial . . . posterior. Alaska’s future is growing dim and distant, with its youth and young adults the beneficiaries of a lack of foresight and concern that is incredible in the face of the information available to those in leadership positions.

Thank you, Sen. Lisa Murkowski for trying to the right thing for Alaskans in the face of a Governor and a Legislature that continue to ignore the obvious.