Interior

Changes are coming to state plans for a liquefied natural gas pipeline, but the governor and the state’s three pipeline partners aren’t ready to say what those changes will be.

At a news conference Wednesday in Anchorage, executives with ExxonMobil, BP and ConocoPhillips joined Gov. Bill Walker to announce that they are “exploring options” to advance the pipeline.

Walker emphasized the importance of keeping the project on track.

“We know that most likely there needs to be some modifications in some way and so we sort of come back to the drawing board a bit on how to look at this project a bit differently,” Walker said.

The executives said they would complete preparations for front-end engineering and design work — also known as “pre-FEED” — on schedule by this fall.

But ConocoPhillips Alaska President Joe Marushack didn’t offer assurances beyond a commitment to explore options.

“What we’re trying to do is get through the pre-FEED process,” Marushack said. “Clearly the economic headwinds are pretty tough right now, but we’ve got to see what the project costs before we can make a statement if we should participate and go forward or not.”

Energy industry experts have said the project doesn’t make economic sense at today’s natural-gas prices.

The announcement put into doubt the state’s timeline for the project.

State Natural Resources Deputy Commissioner Marty Rutherford says everything is on the table ahead of another pipeline announcement next month.

“It’s sort of a nexus of problems that have happened — this economic situation on the value of oil and gas as well as slow negotiations — which has caused everybody to begin to discuss: ‘Well, as we continue forward on AKLNG as currently envisioned, are there other alternatives we should be looking at so we don’t have a delayed feed decision?’ ”

Walker earlier said he would seek a state constitutional amendment to lock in tax rates for the energy companies who are working with the state on the project.

The governor said Wednesday he isn’t ruling out the amendment, but the state may be able to provide cost certainty without an amendment.

The project has an estimated cost of $45 billion to $65 billion.

Speaker of the House Mike Chenault said he wished there was something more concrete from the announcement.

The Nikiski Republican added that he welcomes greater scrutiny of the cost of the project, which is the largest proposed infrastructure project in the world.

“I don’t know whether to take it as a sign of good or bad,” Chenault said. “I think we take it as a time that they’re still talking and, you know, in the economic times that we’re in, with the price of a barrel of oil, I think that it might do us well to step back and look at it and make sure that we haven’t missed something that may cost us in the future.”

Kenai Peninsula Borough oil and gas adviser Larry Persily said the options may include changing the percentage ownership each partner has in the pipeline.

Persily previously was the federal coordinator for natural gas projects in the state. He said if some of the partners decide to scale back their participation in the project, it will present a dilemma for the state.

“Right now, the state, I think, wants it more than the others, but when it comes down to it, the state is not in a position to take on more risk than the companies can afford,” Persily said. “We have enough of a financial hole in our budget.”

Persily said if the state wants to borrow money, it will have to show lenders it can pay the bills it already has. He said the announcement is a reminder that the state must be financially self-supporting before it can think of new options for the gas line.

Hugh Neff won the Yukon Quest on Monday after flying under radar behind first half leaders Brent Sass and Allen Moore.

The 2012 champ had built a commanding lead heading toward the Whitehorse finish. Neff was first out of Braeburn on his way to the finish line. He said he was going to push it into Whitehorse.

“Just because I have this huge lead doesn’t mean I’m gonna lollygag it and take pictures or whatever,” he said.

Neff finished in Whitehorse around 2:30 p.m. Pacific time Monday after starting in Fairbanks nine days earlier.

The 48-year-old took the lead at the halfway point, pushing last year’s winner Brent Sass to second place when Sass had trouble with his sled.

It’s the second time Neff has won the annual race. He took the fifth spot last year.

Neff was glowing when he made it to Braeburn in first place, despite only sleeping a couple of hours over the last two and a half days. Since then, he’s been doing long runs and short rests, pushing himself to the edge to get ahead of the competition.

Sass and Allen Moore were 2.5 hours behind, coming into Braeburn within 20 minutes of each other. The rivalry between the three Quest champions has been waging for years, and both Sass and Moore said it would be hard to beat Neff.

Braeburn is the most critical stop of the race because it’s close to the end and mushers are required to take an 8-hour rest. That means whoever comes in first leaves with fresh legs and a head start on the last 100 miles.

Contestants have been challenged by blizzards, equipment troubles and sick dogs throughout the grueling race.

The top 10 finishers will split a $115,000 prize, and Neff will take home about $35,000.

The Associated Press contributed to this report. 

Massive cost overruns and delays have dogged the F-35, the new fighter slated for Eielson Air Force Base. But the Pentagon insists those problems are now under control.

So it was unfortunate optics that the general in charge of the Air Force budget, James Martin, fainted — forehead to podium — during a press briefing last week, just as he and his budget deputy, Carolyn Gleason, were answering questions about the F-35. Gleason grabbed the general by the arm and hardly missed a beat.

“That’s what the F-35 will do to you,” she said, as people rushed in to help Martin to a chair. He was led out of the Pentagon briefing room. She continued to discuss the purchasing schedule for the F-35.

Martin, before the episode, said spending constraints require the Air Force to buy fewer F-35s over the next five years, to save nearly $5 billion. Next year’s Air Force budget calls for 43 of the aircraft, instead of the 48 planned.

The Air Force chose Eielson as the first base in the Pacific for the F-35, pending environmental review. They are due to arrive in 2019.

Air Force Chief of Staff Mark Welsh sounded upbeat when he gave a progress report on Capitol Hill Wednesday, at the request of Sen. Lisa Murkowski.

“This is not a PowerPoint program anymore,” he told lawmakers at a Senate hearing. “About a year from now, we will have 100 F-35s in our Air Force inventory. We’ve already flown 45,000 hours on this airplane, collectively.”

Welsh says deferring the purchase of some F-35s will not affect the basing process.

“I’m very excited about getting the airplane to Alaska for two reasons,” he said, responding to a question from Murkowski. “Partners in the Pacific will want to buy the F-35. And we can train with them in Alaska like we can train in very few other places in the world. The range airspace there is phenomenal. And that location, we’ve talked about this before—geography does matter, and Alaska is blessed with it.”

The Air Force is still struggling to find maintenance manpower for the F-35, without adding personnel. They’ve been using contractors, but Welsh says they’ll need crews capable of deploying.

“As we get closer to full operational capability of this aircraft, we have more squadrons fielding, we need to get at active duty Air Force maintainers and have them available to stand up operational bases like Eielson,” he said.

Murkowski says the budget also includes nearly $300 million for Eielson, including seven projects to support the F-35.

Sen. Donny Olson joined the the Alaska Senate’s Republican-led majority caucus on Wednesday. The move by the Golovin Democrat means that 16 of the 20 senators now caucus together.

Olson said he’s honored to join the majority and will lend a strong voice for rural Alaskans.

He joins Sen. Lyman Hoffman of Bethel, another Democrat, in the Republican-led majority.

Senate Minority Leader Berta Gardner, an Anchorage Democrat, said her caucus members were disappointed.

But she said they’re pleased the majority will benefit from a member with progressive values, who supports public education and Medicaid expansion.

Olson represents District T, which covers much of the state. It stretches from Fort Yukon to Nome, and includes the North Slope and Northwest Arctic boroughs.

Rural Democrats have joined Republican-led majorities for many years. All six Democratic legislators who represent areas outside of Anchorage, Fairbanks and Southeast Alaska caucus with the majority.

 

Front-runners in the Yukon Quest are running toward the race’s halfway point at Dawson City, Yukon.

Defending Quest champion Brent Sass continues to lead the race. The Eureka musher was in an out of the Eagle checkpoint first this morning, after 4 hours of mandatory rest.

He only briefly shared the dog yard with chasers, Allen Moore and Hugh Neff, who arrived 2 hours after Sass.

Fellow veterans Matt Hall and Ed Hopkins are also in the mix near the front of the race.

Eagle is the only community on the 300 miles of trail between Circle and Dawson, and the historic Yukon River town offers race watchers a glimpse at teams traversing a remote stretch of trail.

Brent Sass pulled into Eagle at 4:30 a.m. under a pale streak of northern lights, after mushing through the night on the Yukon River. He said the trail was fast.

“Real fast. Yeah it was nice,” he said.

He was greeted by a vet and a dozen volunteers in bright safety vests. Sass has blown through most checkpoints so far, so he gave an update of his first 360 miles.

“It’s been interesting,” he said. “I’ve been struggling a little with some sick dogs.”

After a lot of attention, he said they’re feeling better.

“In the last two runs they’ve been eating a lot better and their attitudes have come up,” Sass said.

On Monday, most of the mushers moved through Circle City, a village on the banks of the Yukon. Locals were out and about all day, dropping off snacks and cheering on the teams. Alexander Adlai said the Yukon Quest is the highlight of the year.

“It’s really good to see,” Adlai said. “It’s just like spring carnival of Circle City to see all these dogs and people come in here with all these dog trucks and everything.”

Another dog team pulled in as he was talking.

When they got into Circle, mushers cruised down the street and made a sharp left turn into the checkpoint. More than a hundred dogs were crammed into an area the size of a basketball court. Most were curled into tight balls, sleeping on piles of straw. After mushers spent an hour or so with their dogs, warming up food and massaging feet, they wandered into the fire hall in various stages of exhaustion.

“I just keep telling myself, ‘Stay awake, stay awake, stay awake,’” Seth Barnes said early Monday morning, as he collected dog bowls after camping his dogs.

Like most of the mushers, he was very impressed with the last 100 miles of trail coming north to Circle.

“No overflow on Birch Creek. I mean it literally was perfect,” he said. “Definitely the best trail I’ve been on all year.”

His dogs come from Mitch Seavey’s kennel on the Kenai Peninsula. They’ve been training on gravel most of the winter, so he was really happy to get back in the snow.

“Can we just do 800 more miles of that trail?” he said.

It was about 25 below on the last stretch of Birch Creek, coming into Circle. Barnes said his team was adapting well to the colder weather.

“Their metabolism and diet changes and they start churning calories out and producing energy,” Barnes said.

Mushers grabbed soup, tortillas, and lasagna before finding a quiet spot to sleep for a few hours.

Andy Pace, a rookie from Healy, was the seventh musher into Circle.

He was clipping his dogs back to the line Monday afternoon after a seven-hour layover. He paused to separate the two lead dogs.

“Solo! Sorry, Solo’s trying to breed his daughter,” Pace said. “I can’t tell why. She’s not in heat but he sure thinks she is.”

Pace was excited for the next section of the race. From Circle, the trail follows the wide Yukon River as it snakes through low mountains. He’s run the Quest 300 before, but never the full 1,000 miles to Whitehorse.

“I’ve never been on the Yukon, so I finally get to see it,” Pace said.

With his team lined out, he cruised out of the crowded dog yard and turned toward the empty river.

The race changes once mushers get on the Yukon. Mushers have to negotiate sections of jumble ice where other creeks pour into the river. Trail breakers have blasted a path through the ice, but it can still be really rough. Also, the checkpoints are farther apart, with much less support from handlers and volunteers.

“You’re gonna be on your own,” Torsten Kohnert said.

He’s a veteran musher from Sweden and likes this part of the trail.

“It’s really nice. You can focus on the dogs and nothing else,” he said.

After leaving Circle, Allen Moore, Hugh Neff, and Matt Hall camped at Trout Creek as well.

Moore was keeping an eye on Sass, who was doing a lot of long runs early in the race.

“Usually that catches up to you the second half of the race,” Moore said.

He said he doesn’t mind being behind him at this point.

“We know what he’s doing all the time and he don’t know what we’re doing,” Moore said. “I like it that way.”

In Eagle, the trail leaves the river and climbs American Summit. The next checkpoint is Dawson City, 144 miles away, where mushers take a mandatory 36-hour layover.

The Regulatory Commission of Alaska described the electric utility scene in the Railbelt as “fragmented, balkanized and often contentious.”

But that may be changing.

Utilities from Homer to Fairbanks are in discussions to overhaul the way electricity is generated and transported across the region. The proposals would create a single operator to coordinate how power is delivered to customers throughout the Railbelt, and bring in an outside company to build and manage regional transmission lines. The goal is cheaper electricity and more renewable power.

“Maybe it’s a little bit about maturity and a little bit about a different way of doing business,” said Cory Borgeson, president of Golden Valley Electric Association in Fairbanks.

In the current way of doing business, six different utilities supply electricity to about half a million people between Homer and Fairbanks. In most parts of the country, a population that size would likely be served by just one utility.

Say people are using more power in Fairbanks. Ideally, the utility there would tap the next most efficient power plant in the whole system — maybe, at that moment, one in Anchorage.

That’s called economic dispatch — the ability to go to the cheapest power source available and route it to where the power’s needed most. It can save rate payers a chunk of money, but right now it’s not possible.

So utilities are exploring creating a single operator for the whole region. Chris Rose heads the Renewable Energy Alaska Project and would like that operator to represent a wide range of stakeholders, rather than being controlled entirely by the utilities themselves.

“We want a system operator that is impartial and independent,” he said. “I can’t emphasize that enough.”

The current system makes it hard for independent companies to access the grid, especially renewable power suppliers.

When Cook Inlet Region Inc. wanted to expand its Fire Island Wind project, Golden Valley Electric in Fairbanks was interested in buying.

But between Cook Inlet and Fairbanks are three other utilities. Each charged a fee.

“There was a willing buyer and a willing seller, but the transmission tariffs really killed the deal,” Rose said.

A single-system operator could create a one-stop shop for independent producers who want to access the grid.

Meanwhile, to make all this work, the RCA found that the system needs nearly a billion dollars in upgrades — money that no utility can raise alone. In the past, the funds might have come from the state, but that’s no longer likely. So utilities are also considering bringing in an outside transmission company to build and maintain lines.

The RCA, which oversees utilities, has ordered the companies to try to resolve the issues voluntarily. In an update to lawmakers on Thursday, Golden Valley’s Borgeson said it’s going well.

“I don’t think we’re talking years,” he said. “I think we’re talking months. Maybe 18 months.”

The next progress report from utilities is due by the end of January.