Alaskanomics

October 12 summary of recent economic news for Alaska

In energy news, Alaska Governor Sean Parnell issued a press release October 3 outlining progress by Alaska's three major oil producers in advancing an Alaska LNG project. The letter from the producers and TransCanada estimates total project costs at $45 to $65 million. The news received extensive coverage, from Bloomberg, Reuters and others. Meanwhile, Cheniere Energy in Louisiana made a deal to sell LNG at Henry Hub pricing, which undercuts potential long term LNG contracts based on the price of oil. Shell, which started drilling in the Chukchi Sea in early September, began drilling in the Beaufort Sea on October 3. Baker Hughes released September rig count data showing Alaska with 6 land rigs and 1 offshore rigs working, one more than the August count. Golden Valley Electric (GVEA) and the EPA signed a consent decree to allow GVEA to restart the Healy Clean Coal Plant. GVEA's timeline to restart the plant is 18-24 months. On October 4, Alaskans received a total of $567 million in Alaska Permanent Fund dividends. Yesterday, Alaska Airlines ordered 50 new Boeing aircraft worth $5 billion.

DNR Issues Preliminary Approval for Eva Creek Wind Project; Golden Valley Electric to build "largest wind project in Alaska"

The Alaska Department of Natural Resources has issued preliminary approval of Golden Valley Electric Association's (GVEA) Eva Creek Wind project, to be located near Healy, Alaska. The approval comes as four separate decisions:

• A 25 year lease of approximately 43 acres for wind turbines and support facilities
• Sale of about 310,000 cubic yards of materials from state-owned sites for road and pad construction. This sale would be advertised competitively at a public auction.
• An easement for GVEA to construct access roads to its turbines and facilities
• An easement to DOT so GVEA can realign and upgrade an existing access road. This anticipates that GVEA will enter into an agreement with DOT to operate and maintain the road.

Public comments are due August 15, and barring any significant changes required as a result, the approvals will be issued shortly thereafter.

The Eva Creek Wind Project, planned for completion in September 2012, will generate 24 megawatts of power and, according to GVEA, save its members $13.6 million over the next 20 years.