Todays ADN offers a cautionary perspective of future investment in the ALaskan oil industry and more signs of a maturing industry. In the past the prospect of longer term high oil prices would be a sign of high investment in the industry to follow, but now even in the face of dramatic supply transitions following the Russian war in Ukraine, the coming clean energy transformation is slowing oil investment. It’s likely to bring new oil development to a stop soon in high cost, capital intensive regions. Alaska should be adjusting its aspirations for the future and focusing on clean-energy opportunities, such as clean ammonia (a transportable form of hydrogen), while also addressing the need for rail belt transitional energy for power and heating.

The following is from my July 4, 2022 commentary published in the ADN.

If we build it, will they come?

Since the 2022 April Sustainable Energy Conference, the ADN Opinion pages offered a series of views of our north slope stranded natural gas development projects each focused on the goal of exporting liquid natural gas. These projects have continued with bravado for 40 years, expended over $1Billion to advance various quasi-state led dreams, and confidently defied the market and producer’s own lack of interest to finance the projects. It’s time to let go of the debate over who’s Letters of Intent were the most hopeful and refocus our efforts on the emerging Pacific clean-energy markets for blue and eventually green hydrogen exported from Alaska in the form of ammonia while developing our carbon capture and sequestration resources.

At the conference, speakers hinted at a startling transition when both current major LNG project leaders mentioned the option of exporting clean hydrogen fuel, in the form of our natural gas converted to
liquid “blue” ammonia.

For those not familiar with ammonia, chemically N-H3, it is better known for its nitrogen content and fertilizer use; however, it happens to also be safe way to transport hydrogen and can be burned as a fuel
or converted in to the more familiar H2 gas for fuel cells and power generation. “Blue Ammonia” is made from carbon-based energy such as natural gas in a way that captures and sequesters the carbon,
such as in the ground, making it a “clean” source of energy.

“Green Ammonia” is made from carbonless energy sources and considered the preferred long-term “clean” energy but not yet as readily available. Markets already exist for clean ammonia such as Japan’s use in blending with coal to reduce the carbon footprint of their power production. In the future, ammonia is expected to be a primary fuel for global marine applications and feedstock for local hydrogen gas supplies. It is important for Alaskans to see that our opportunity is found in the combination of our world class gas supply AND our sequestration capacity.

Together these resources are needed for the emerging markets, and in the future Alaska can also uniquely transition to using our vast wind, tidal, solar, and hydro energy resources to make additional green hydrogen and ammonia for continued export as the blue-energy sources are phased out – ending forever the concept of “stranded Alaska energy”.

We should all pay attention to the startling message of the conference keynote speaker, Tony Seba. When asked by the Governor about what role Alaskan natural gas will have in the future to meet Asian energy needs, he paused and said, “None”.

Seba went on to explain that in the next 10-15 years our natural gas will have some remaining legacy uses, (such as south central Alaska heating), but that beyond that time the world will have moved on to new technologies that are already cheaper to build and operate than just the cost of operating a gas power plant. If you don’t believe Seba, it’s hard to argue with 40 years of trying and spending our scarce public funds. The hard reality is that even with the war in Ukraine, we cannot supply natural gas to Asian markets in the time frame they need it, 2025-2030, in the gap years before other global projects come online that will be cheaper than our gas. What we can do is see that the demand for clean energy is growing in the north pacific region and we can transition to meet the emerging market needs, including trade agreements that address the need for access to our carbon sequestration reservoirs for carbon capture.

There are at least four options for exporting “blue” hydrogen from Alaska and at least two globally significant carbon sequestration reservoirs in Alaska. Each of these need attention to keep up with
other projects in the world that are already focused on the future energy needs of decarbonized economies.

Alaska has a promising future to continue as an important energy producer and exporter, but its time to wake up from the LNG gas line export dreams of ‘build it and they will come’. We should focus on aligning our efforts with the emerging market demands for clean blue and green hydrogen energy rather than our past hopes for LNG exports while we also address our rail belt energy requirements and local energy transitions. Like the now mature oil industry, we are witnessing the maturing of LNG faster than we could have imagined. We should be looking ahead to what is next.

Ky Holland
COO, Mighty Pipeline Inc., an Alaskan clean hydrogen fuel startup company

Followup notes:

7/25/22 Update – I’ve been waiting to see what might follow my article. I expected some sort of rebuttal from the gas project proponents. I didn’t expect this! Quite a damming opinion!!! Larry knows more about AK gasoline history that most anyone.

It might be the right time to make a full court press on getting AK to investigate the Mighty Pipeline TAPS option, ammonia, and CCUS. Alaska isn’t in a ‘window of opportunity’ for natural gas. It’s in a labyrinth.

July 11, 2022 ADN Letter to editor on border carbon adjustments combined with clean energy with reference to my ADN article.

July 1 and 3, 2022 Articles in the Fairbanks News Miner.