“Russia With Love”: Alaska Gas Scandal Is Out-of-Country, Not Out-of-State
A legal controversy — critics would say scandal — has erupted in Alaska’s statehouse over the future of its natural gas bounty.
It’s not so much an issue of the gas itself, but who gets to decide how it gets to market and where he or she resides.
The question of who owns Alaska’s natural gas and where they’re from, at least for now, has been off the table. More on that later.
At its core, the controversy centers around a public-private entity called the Alaska Gasline Development Corporation (AGDC) created on April 18, 2010 via House Bill 369 for the “purpose of planning, constructing, and financing in-state natural gas pipeline projects.”AGDC has a $400 million budget funded by taxpayers.
AGDC was intially built to facilitate opening up the jointly-owned ExxonMobil-TransCanada Alaska Pipeline Project for business. That project was set to be both a liquefied natural gas (LNG) export pipeline coupled with a pipeline set to bring Alaskan gas to the Lower 48.
Things have changed drastically since 2010 in the U.S. gas market though, largely due to the hydraulic fracturing (“fracking”) boom. And with that, the Lower 48 segment of the Alaska Pipeline Project has become essentially obsolete.
Dreams of exporting massive amounts of Alaskan LNG to Asia, however, still remain. They were made much easier on April 14, when the Kenai LNG export facility received authorization to export gas from the U.S. Department of Energy.
The bill served as a Memorandum of Understanding (MOU) between Alaska, theAGDC, ConocoPhillips, BP, ExxonMobil, and TransCanada, with the four companies now serving as co-owners of the South Central LNG Pipeline Project.
Meet Richard “Dick” Rabinow
Under Alaska state law, you have to be a state citizen to serve on state commissions like AGDC. But one of the seven Board members, Richard “Dick” Rabinow, is a citizen of a state far from Alaska: Texas.
Rabinow is the former president of ExxonMobil Pipeline Company (where he worked for 34 years) and former Chairman of the Trans Alaska Pipeline System (TAPS) Owners Committee. TAPS is co-owned by ExxonMobil, BP, Unocal and ConocoPhillips. He currently lives in Dallas, Texas and runs his own consultancy called Rabinow Consortium, LLC.