171 Ferc ¶ 61,134 United States of America Federal Energy Regulatory Commission
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171 FERC ¶ 61,134 UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION Before Commissioners: Neil Chatterjee, Chairman; Richard Glick, Bernard L. McNamee, and James P. Danly. Alaska Gasline Development Corporation Docket No. CP17-178-000 ORDER GRANTING AUTHORIZATION UNDER SECTION 3 OF THE NATURAL GAS ACT (Issued May 21, 2020) On April 17, 2017, Alaska Gasline Development Corporation (AGDC) filed an application under section 3 of the Natural Gas Act (NGA)1 and Part 153 of the Commission’s regulations2 for authorization to site, construct, and operate facilities in the State of Alaska for the liquefaction and export of natural gas produced in the North Slope of the State of Alaska (Alaska LNG Project). For the reasons discussed in this order, we will authorize AGDC’s proposed project, subject to the conditions discussed and attached herein. I. Background and Proposal AGDC is an independent, public corporation of the State of Alaska structured within the Department of Commerce, Community, and Economic Development. The Alaska State Legislature provided AGDC with the authority and primary responsibility for developing a liquefied natural gas (LNG) project on the State’s behalf.3 1 15 U.S.C. § 717b (2018). 2 18 C.F.R. pt. 153 (2019). 3 ALASKA STAT. § 31.25.005. Docket No. CP17-178-000 - 2 - The Alaska LNG Project consists of: a gas treatment plant located in the Prudhoe Bay Unit of Alaska’s North Slope, and two natural gas pipelines connecting production units to the gas treatment plant; an approximately 806.9-mile-long, 42-inch-diameter pipeline (Mainline Pipeline) capable of transporting up to 3.9 billion cubic feet of gas per day (Bcf/day) from the gas treatment plant to the liquefaction facilities; 344,000 horsepower (hp) of compression located at eight compressor stations along the Mainline Pipeline; and liquefaction facilities on the Kenai Peninsula designed to produce up to 20 million metric tons per annum (MMTPA) of LNG (Liquefaction Facilities) for export.4 AGDC estimates that the cost of the facilities will be between $40 and $45 billion. Specifically, AGDC proposes to construct the following facilities: • a gas treatment plant in Prudhoe Bay on the North Slope consisting of three parallel treatment trains for the removal of carbon dioxide and hydrogen sulfide from the feed gas, each sized to process up to 1.3 Bcf/day of gas (Prudhoe Bay Treatment Plant); • 1.0 miles of 60-inch-diameter pipeline on the North Slope, which will extend from the Prudhoe Bay Unit gas production facility to the Prudhoe Bay Treatment Plant (Prudhoe Bay Unit Gas Transmission Line); • 62.5 miles of 32-inch-diameter pipeline on the North Slope, which will extend from the Point Thomson Unit gas production facility to the Prudhoe Bay Treatment Plant (Point Thomson Unit Gas Transmission Line); • 806.9 miles of 42-inch-diameter pipeline, which will extend from the Prudhoe Bay Treatment Plant and terminate at the Liquefaction Facilities on the Kenai Peninsula (Mainline Pipeline);5 • a compressor station with three gas-fired turbine compressor units, totaling 68,000 hp, located at Mainline Milepost (MP) 76.0 in the North Slope Borough (Sagwon Compressor Station); 4 The supply of natural gas for the Alaska LNG Project is located at the Prudhoe Bay and Point Thomson production units on the North Slope. 5 The Mainline Pipeline will cross the North Slope, Fairbanks North Star, Denali, Matanuska-Susitna, and Kenai Peninsula Boroughs and the Yukon-Koyukuk Census Area. AGDC states that along the mainline there will be at least five gas interconnection points to allow for future in-state deliveries of natural gas. Docket No. CP17-178-000 - 3 - • a compressor station with one 42,000 hp gas-fired turbine compressor unit, located at Mainline MP 148.5 in the North Slope Borough (Galbraith Lake Compressor Station); • a compressor station with one 42,000 hp gas-fired turbine compressor unit, located at Mainline MP 240.1 in the Yukon-Koyukuk Census Area (Coldfoot Compressor Station); • a compressor station with one 42,000 hp gas-fired turbine compressor unit, located at Mainline MP 332.6 in the Yukon-Koyukuk Census Area (Ray River Compressor Station); • a compressor station with one 42,000 hp gas-fired turbine compressor unit, located at Mainline MP 421.6 in the Yukon-Koyukuk Census Area (Minto Compressor Station); • a compressor station with one 42,000 hp gas-fired turbine compressor unit, located at Mainline MP 517.6 in the Denali Borough (Healy Compressor Station); • a compressor station with one 33,000 hp gas-fired turbine compressor unit, located at Mainline MP 597.4 in the Matanuska-Susitna Borough (Honolulu Creek Compressor Station); • a compressor station with one 33,000 hp gas-fired turbine compressor unit, located at Mainline MP 675.2 in the Matanuska-Susitna Borough (Rabideux Creek Compressor Station); • a stand-alone gas heater station, located at Mainline MP 749.1 in the Matanuska-Susitna Borough (Theodore River Heater Station); • liquefaction facilities capable of producing up to 20 MMTPA for export, located on the eastern shore of Cook Inlet in the Nikiski area of the Kenai Peninsula, consisting of feed gas mercury and water removal facilities, fractionation facilities, three liquefaction trains, two 240,000 cubic meter tanks, and marine facilities capable of accommodating two LNG carriers simultaneously (Liquefaction Facilities); and • various appurtenances. Docket No. CP17-178-000 - 4 - On November 21, 2014, the Department of Energy’s Office of Fossil Energy (DOE/FE) authorized Alaska LNG Project, LLC6 to export, on a long-term, multi- contract basis, 20 MMTPA, or 2.55 Bcf/day, of LNG to nations with which the United States has a Free Trade Agreement (FTA).7 On May 28, 2015, DOE/FE granted conditional authorization for the exportation of 20 MMTPA8 of natural gas to nations that do not have an FTA.9 AGDC states that it is in negotiations with producer members of Alaska LNG Project, LLC to obtain an option to purchase the LLC, which, as noted above, holds the DOE/FE export license and also owns the land for the Liquefaction Facilities site. AGDC states that it will make the required filings at DOE/FE to authorize a change in control over ownership of the export license to AGDC. II. Procedural Issues A. Notice, Interventions, Protests, and Comments Notice of AGDC’s application was published in the Federal Register on May 5, 2017, with motions to intervene due by May 22, 2017.10 Timely, unopposed motions to intervene were filed by: Alyeska Pipeline Service Company; BP Exploration (Alaska) Inc. and BP Alaska LNG LLC, jointly; Center for Biological Diversity; Chickaloon Native Village Traditional Council; City of Valdez, Alaska; Conoco Phillips Company, ConocoPhillips Alaska LNG Company, and ConocoPhillips Alaska Natural Gas Corporation, jointly; ExxonMobil Alaska LNG LLC; ExxonMobil Alaska Production 6 The Alaska LNG Project, LLC’s September 2014 Letter requesting prefiling for the Alaska LNG Project identified five partners: ExxonMobil Alaska LNG LLC, ConocoPhillips Alaska LNG Company, BP Alaska LNG LLC, TransCanada Alaska Midstream LP, and the Alaska Gasline Development Corporation. 7 See Alaska LNG Project, LLC, FE Docket No. 14-96-LNG, Order No. 3554 (Nov. 21, 2014) (authorizing exports for a 30-year term, beginning on the earlier of the date of first exportation or 12 years from the date of DOE/FE’s authorization) (DOE/FE Order No. 3554). 8 This quantity is not additive to the volume approved to be exported to free trade nations set forth in DOE/FE Order No. 3554. 9 See Alaska LNG Project, LLC, FE Docket No. 14-96-LNG, Order No. 3643 (May 28, 2015) (authorizing exports for a 30-year term, beginning on the earlier of the date of first exportation or 12 years from the date of DOE/FE’s authorization) (DOE/FE Order No. 3643). 10 82 Fed. Reg. 21,223. Docket No. CP17-178-000 - 5 - Inc.; Northern Alaska Environmental Center; Sierra Club; and National Parks Conservation Association.11 On January 9, 2018, the Matanuska-Susitna Borough filed a motion to intervene out of time and comments. This late intervention was granted on February 27, 2018. On August 10, 2018, the Kenai Peninsula Borough filed a motion to intervene out of time, which was granted on September 11, 2018. Sierra Club and the Center for Biological Diversity protested AGDC’s application, arguing that the environmental impacts of the proposed project outweigh any benefits, and therefore, the project is not consistent with the public interest. Additionally, we received a number of comments in support of the project. On June 6, 2017, AGDC filed an answer to the comments by the Center for Biological Diversity and Sierra Club. Although the Commission's Rules of Practice and Procedure do not permit answers to protests,12 we will accept the answers herein because they clarify the concerns raised and provide information that has assisted in our decision making. These concerns are addressed in the final Environmental Impact Statement (EIS) for the Alaska LNG Project and below. B. Request for Evidentiary Hearing In its motion to intervene, the Center for Biological Diversity requested a formal hearing on AGDC’s application, “including the environmental impacts of and public need for the project.”13 Although our regulations provide for a hearing, neither the NGA nor our regulations require that such hearings be formal (i.e., trial-type) hearings. When the written record provides a sufficient basis for resolving the relevant issues, it is the Commission’s practice to provide for a “paper hearing.”14 That is the case here. The 11 Timely, unopposed motions to intervene are automatically granted pursuant to Rule 214 of the Commission’s Rules of Practice and Procedure.