During the 2008 presidential campaign, Barack Obama promised to "work with the Canadian government, state of Alaska, oil and gas producers and other stakeholders to facilitate construction of” an Alaska natural gas pipeline. "Not only is this pipeline critical to our energy security, it will create thousands of new jobs," he said.
The Alaska Pipeline Project would construct and operate a pipeline for moving Alaska North Slope gas to market. Its main elements are a 48-inch-diameter gas pipeline that would run either to the northern part of the Canadian province of Alberta or to the port city of Valdez in southern Alaska. (This is not to be confused with the Keystone XL pipeline, which would carry petroleum rather than natural gas and which Obama, in a controversial decision, moved to deny a key approval in January 2012.)
As we noted when we last checked this promise about two years ago, efforts to bring natural gas to markets farther south have met with cost, political, and environmental hurdles over the last 30 years. In 2008, the state of Alaska approved legislation to award a license to TransCanada Alaska to develop and build a natural gas pipeline Alaska also pledged up to $500 million in state support for the project. The Federal Energy Regulatory Commission ultimately will have to approve the pipeline.
Under the project's official timeline, construction would begin in 2015, with the pipeline ready to deliver the first natural gas by 2020. Since that's well after Obama will be leaving office, we can't rate this promise based on whether or not the pipeline is built.
Instead, we will rate Obama on whether he has worked to "facilitate construction of” the pipeline.
As we noted in our previous update, Obama discussed the matter with Canadian Prime Minister Stephen Harper during his first presidential visit to the country in February 2009. More recently, he wrote a letter to the Alaska Oil and Gas Congress in support of an Arctic pipeline. "I share with you the anticipation that a North Slope natural gas pipeline could finally be on its way south to serve North American markets," he wrote. "In addition to energy security, the pipeline would provide short and long-term economic benefits far beyond the tens of thousands of construction jobs it would create. The nation's electrical utilities, manufacturers, businesses and homeowners will all live better with affordable, domestic natural gas supplies.”
The primary player within the administration has been the Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects. This office was established by Congress in 2004 "to expedite and coordinate federal permitting and construction of a pipeline and enhance transparency and predictability of the federal regulatory system to deliver natural gas from the Arctic to American markets.” It works with more than 20 federal agencies, as well as the Canadian government, the state of Alaska, tribal governments and other stakeholders.
Obama nominated Larry Persily to head the 10-person office on Dec. 9, 2009, and Persily was confirmed by the Senate on March 10, 2010. Previously, Persily had worked on Alaska oil and gas issues for three Alaska governors and the Alaska state legislature and before that was a journalist.
The office's website offers links to dozens of speeches and presentations about the Alaska pipeline project, mostly by Persily, to governmental, industry and citizens groups.
"I didn't take the job because I love summers in Washington or traffic on the Beltway,” Persily said in a speech to the Alaska Support Industry Alliance in Anchorage on Oct. 7, 2010. "I signed on to see if we can get this project under way. An Alaska gas line would be good for the country and good for the state — and good for the producers when market prices finally recover. The president understands this and supports an Alaska gas line.”
In remarks at the Juneau World Affairs Council on Jan. 19, 2012, Persily said that "it's time to divert some of that gas into a pipeline to ship to customers, somewhere, anywhere. The older North Slope fields are producing much more water and gas than oil as they age; the equipment to process and reinject all that gas is maxed out; and we'd be a lot more attractive as an investment opportunity for oil and gas companies if they could sell their gas along with the oil.”
So Persily's office has been active in pushing the initiative. Much of the rest of the U.S. role now rests with FERC. The project has slowly moved ahead at FERC, though as an independent federal agency, FERC is not directly answerable to Obama (and, as a result, not a factor in our ruling).
FERC staff participated In 24 public open houses in Alaska between March 2011 and June 2011. In August 2011, FERC announced that it would prepare an environmental impact statement on the project, with the document possibly finished by late 2013. And in January and February 2012, FERC began consultations with native Alaskan tribes and other groups to determine the impact of the project in Alaska.
None of this is to suggest that the project will have a glide path to completion. In addition to the sheer size and complexity of the project, both technically and politically, the pipeline's usefulness is closely linked to the state of the energy economy.
"A rapid and largely unanticipated increase in natural gas production from U.S. shales has lowered natural gas price forecasts for the foreseeable future,” the Congressional Research Service wrote on June 17, 2011. "Given this drop in prices, Arctic natural gas projects may not be economically viable at present.” Indeed, a competing pipeline project known as the Denali pipeline was discontinued in May 2011.
"TransCanada officials have stated that they remain committed to developing their Alaska pipeline project, although some industry analysts are skeptical,” CRS wrote.
It's clear that the natural gas pipeline is nowhere near completion and faces significant hurdles. But Obama promised to "work with the Canadian government, state of Alaska, oil and gas producers, and other stakeholders to facilitate construction of” an Alaska natural gas pipeline. Occasionally by himself, and more often through Persily and his office, Obama has pursued this goal. We rate it a Promise Kept.