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Uncle Sam had better get wise fast in Syria

Alaska News - Thu, 06/23/2016 - 17:53
Jake Lestenkof is a former adjutant general of the Alaska National Guard and Marine combat veteran. He has also held several positions in federal ...

Two maritime unions pull longtime support for Young, endorse challenger

Alaska Dispatch News - Thu, 06/23/2016 - 17:49

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The two maritime unions that criticized Rep. Don Young over his silence on campaign contributor Edison Chouest Offshore's likely assumption of tanker escort duties in Prince William Sound rescinded their longtime support for him and on Thursday announced they were endorsing his main challenger in the race.

Representatives with the Seattle-based Inlandboatmen's Union and the Maryland-based International Organization of Masters, Mates & Pilots on announced their support for Democrat Steve Lindbeck at a press event at his campaign headquarters on Thursday.

The unions each have about 5,000 members living around the country. For decades, the groups have found an ally in Young, a former tugboat operator on the Yukon River. But they say they've been angered by his decision not to speak out over the awarding of a valuable private contract to Louisiana tugboat company Edison Chouest for spill-prevention and ship-escort duties in Prince William Sound. Edison Chouest was one of the companies faulted by the federal government for errors that led to the grounding of Shell's Kulluk drilling rig off Kodiak in 2012.

[Rep. Young's challenger says his receipt of contributions by a maritime company amounts to 'legalized bribery']

Edison Chouest employees and related companies have given close to $300,000 to Young's campaigns and legal defense funds since 2007. Union members and Lindbeck have asserted the donations bought Young's silence on a public matter involving a critical waterway that supports fishing.

Alyeska Pipeline Service Co., manager of the spill-response contract on behalf of its owners — primarily BP, ExxonMobil and ConocoPhillips — says Edison Chouest is poised to take over the 10-year contract from Crowley Marine, a union company from Florida.

Young's press secretary has said it's not appropriate to weigh in on a private contractual matter.

But Edison Chouest has described several agencies and public entities as "stakeholders" in the contract, including the U.S. Coast Guard, the state Department of Environmental Conservation and a citizen watchdog group and fishermen.

Uncle Sam had better get wise fast in Syria

Alaska Dispatch News - Thu, 06/23/2016 - 17:45

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It is time for United States to own the mess it has made in Syria.

For more than five years a bloody battle has raged for control of Syria. Almost daily, we receive heartbreaking news of the bloodshed spilling across borders, destabilizing the region and claiming lives. Thousands have died, millions more made refugees.

Unfortunately, much of the trouble is due to the actions of our own United States government. With news of increasing violence in the Middle East and Southwest Asia, we can no longer ignore the fact that our nation's military activities have not brought peace and stability, but in fact the opposite.

Afghanistan and Iraq are clear examples of missions gone wrong. Now, I fear, Syria, the current global hot spot, has  become one more example of the grave consequences of dubious action and calamitous indecision on the part of the U.S.

[JOHN HAVELOCK: 'Leak' of diplomats' memo on Syria was no leak at all.]

Like Afghanistan and Pakistan, where the Taliban have taken hold, Syria – according to the Obama Administration and news reports – has become a haven for the homegrown terrorist group the Islamic State, also known as ISIL or ISIS.

The United States and Syria began their turbulent relationship in 1835, when the U.S. sent a consul to Aleppo, then part of the Ottoman Empire. After World War II, in 1946, the U.S. officially recognized an independent Syria. In 1967, in the wake of the Arab-Israeli War, Syria severed diplomatic relations with the United States. Relations were reestablished in 1974. Five years later, the U.S. put Syria on its list of state sponsors of terrorism. Between 1990 and 2001, the U.S. and Syria agreed to cooperate on a number of regional issues, but tensions between the two nations worsened. In 2004, the U.S. imposed economic sanctions against Syria for human rights abuses. In 2011, additional sanctions were declared against the Assad regime.

As of this date, the on-again-off-again relationship seems irrevocably off. The U.S. and Syria have had no official government-to-government ties, except perhaps as antagonists.

Although not a close friend of the U.S, Syria was a relatively stable country until 2011. Then the "Arab Spring," a wave of uprisings that began with a revolution in Tunisia, washed over Syria.

Peaceful protesters and armed rebels alike demanded the ouster of Syrian President Bashar al-Assad and his regime. Assad had been elected three times, first in 2000 and again in 2007 and 2014. An international delegation from more than 30 countries reviewed the 2014 vote and concluded the election was "free, fair and transparent."

To be sure, Assad is far from an ideal leader. His path to the presidency was made possible by loyalists in Syria's security forces, ruling Baath party and dominant Alawite sect who helped engineer a constitutional amendment allowing him to serve a third term. Assad has a profoundly rotten human rights record. He is also rather too cozy with Russia, China and Iran for U.S. interests.

Still, I was amazed when the U.S. and its coalition partners, apparently taking a page from the Libyan playbook, quickly waded into the Syrian conflict to back the rebels.

What was the strategy behind U.S. support of the rebels? As we are coming to find out, there wasn't one. Nor, it seems, is there one even now.

The U.S. has responded to the ever-worsening situation in Syria with confused, half-measures. Further, conflict among U.S.-backed rebel forces in Syria escalates almost daily, complicating the fight against ISIL.

By throwing support to the Syrian rebels, U.S. leaders made all Americans party to the attempted overthrow of a legal, freely elected, sitting government.

For what? A war of alarmingly vague objectives, including the overthrow of an established, secular government with whom the U.S. shares a common enemy in ISIL, in favor of splintered forces whose long-term intentions we have yet to truly identify.

Despite all this, key U.S. military leaders, political officials and diplomats in and out of the Obama administration are now telling us Syria is being treated as a "strategy free zone."

Strategy free zone? That, I take it, means we have no strategy. Really?

The term Arab Spring was first used in 2005 by media commentators to suggest that one benefit of the U.S. invasion of Iraq would be a "flowering" of Western-friendly Middle East democracies.

Too late. Such grand-scale, positive change has yet to blossom in the Middle East and there's little reason to think things will be different with Syria.

"Whoever wants a serious negotiation with the (Assad) regime must be stronger than the regime," wrote Yassin al Haj Saleh, a prominent opposition voice, in an email to SyriaDeeply.org as reported in an online article for the The WorldPost.

If the current cease-fire talks fail in Syria, the United States must take responsibility for what it has and hasn't done. Continuing to treat Syria as a "strategy free zone" should not be an option.

Meaningful action will be costly. But Washington has already funneled $200 million in aid to Syria, with no real plan for how that money would relieve the widespread suffering or end the fighting.

Inevitably, the United States will almost certainly end up owning Syria – much as it owns Iraq and Afghanistan.

Thank you, Washington.

Retired Maj. Gen. Jake Lestenkof is a former adjutant general of the Alaska National Guard and Marine combat veteran.  He has also held several positions in federal and state government including commissioner of the Alaska Department of Military and Veterans Affairs.

No criminal charges for Mat-Su school board member who shot suspect near his property

Alaska Dispatch News - Thu, 06/23/2016 - 17:23

WASILLA — A Mat-Su School Board and state parole board member who shot a man near his Wasilla-area property as he tried to escape arrest in March will not face charges.

Palmer District Attorney Roman Kalytiak announced his decision not to pursue criminal charges against Richard "Ole" Larson in an email Thursday to Alaska Dispatch News and the Mat-Su Valley Frontiersman. Larson sits on the Matanuska-Susitna Borough's school board.

Through attorney and former Wasilla Mayor Verne Rupright, Larson has acknowledged shooting 24-year-old Codey Tallman after he ran across Larson's property near Bogard Road trying to elude Alaska State Troopers.

Tallman had ditched his pickup nearby. Troopers suspected he was heroin user and Tallman was also the suspect in a series of thefts at local businesses.

Larson told Tallman to stop and Tallman shoved him, troopers said at the time. Tallman later knocked Larson to the ground, and Larson followed him into some woods, where Tallman knocked him down again, they said. When Larson started calling troopers, Tallman hit him.

That's when Larson "removed a .38 caliber handgun from his (pocket) and advised Tallman he was armed and told him to stop," according to a trooper's report. Tallman charged and Larson shot him in the leg.

Tallman was not on Larson's property at the time he was shot, Kalytiak said in an email Thursday. He was in Larson's neighborhood.

[Read more: Mat-Su debates 'vigilante' justice after school board member shoots fleeing suspect]

Kalytiak said he reviewed information gathered by troopers with two senior assistant district attorneys.

His ultimate decision centered in part on Tallman's criminal history and Larson's lack of it, Kalytiak wrote in the email detailing his decision.

"It is obvious that Mr. Larson would claim self-defense at trial," he wrote. "Due to Mr. Tallman's dangerous conduct that day and his lack of credibility, the prosecution would not be able to disprove self-defense, which is our burden in a trial of this type."

Prosecuting such a case wouldn't be a "wise use" of state resources, Kalytiak added. Courts around the state are under financial pressure given the ongoing fiscal crisis.

Alaska laws regarding self defense prohibit the use of deadly force "if the person knows that, with complete personal safety and with complete safety as to others being defended, the person can avoid the necessity of using deadly force by leaving the area of the encounter."

Exceptions include incidents on one's property or as a guest or "express or implied agent" of the owner, assisting a peace officer or protecting a member of one's own household.

A more recent exception added in 2013 states a person is not required to retreat to avoid using deadly force if they are "in any other place where the person has a right to be."

Tallman's trial is scheduled for later in the summer.

35th Annual <b>Alaska</b> Scottish Highland Games to Kickoff in Palmer on Saturday

Alaska News - Thu, 06/23/2016 - 17:18
The 35th Annual Alaska Scottish Highland Games is set to Kickoff this weekend in Palmer but this year the game takes on a new twist as for the first ...

<b>Alaska</b> attorney general, resources commissioner

Alaska News - Thu, 06/23/2016 - 17:18
ANCHORAGE, Alaska (AP) — There were major changes to Gov. ... for the sacrifices he and his family have made in service to Alaska," Walker said.

Endurance boat race to <b>Alaska</b> swings by South Island

Alaska News - Thu, 06/23/2016 - 17:18
The first stage of 'Race to Alaska' ended in Victoria on Thursday. More than 60 boats arrived in Victoria's Inner Harbour from Washington's Port ...

National food contaminations affect hundreds of products in <b>Alaska</b>

Alaska News - Thu, 06/23/2016 - 17:03
ANCHORAGE (KTUU) A dozen food recalls have affected Alaska this month, forcing grocery stores across the state to pull hundreds of items off their ...

Stocks, sterling skid as early Brexit results show tight vote

Alaska Dispatch News - Thu, 06/23/2016 - 16:35

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SYDNEY – Global share markets swung lower and sterling tumbled in Asia on Friday as early results from the UK's vote on European Union membership proved unnervingly close, sparking a wave of profit-taking across risk assets.

Sterling collapsed as far as $1.4300 at one stage in wild trade, having earlier stretched to a high for the year at $1.5022. It was last at $1.4490 with no clear indication where it might end the day.

The euro turned tail to hit $1.1302 as an actual vote for Britain to leave could endanger the future of the entire bloc, and its single currency.

The safe-haven yen recouped early losses to stand at 104.66 per dollar while futures for Japan's Nikkei shed 1 percent. EMINI futures for the S&P 500 were off a more modest 0.2 percent, having climbed 1.76 percent on Thursday.

Financial markets have been racked for months by worries about what Brexit, or a British exit from the European Union, would mean for Europe's stability.

[British voters head to the polls for historic vote on European Union]

Early opinion polls had favored the "Remain" camp. An Ipsos MORI poll put the lead at 8 points while a YouGov poll found 52 percent of respondents said they voted to remain in the EU while 48 percent voted to leave.

Yet a trickle of official results showed the margins were nail-bitingly tight. Traders were particularly spooked by returns from Sunderland showing a large majority for the "Leave" camp and just a narrow win for "Remain" in Newcastle.

"Newcastle was a squeaky win for Remain but Sunderland was a huge kick in the ribs and the bottom has fallen out of the pound," said Jeremy Cook, chief economist at international payments company, World First. "These markets are thin, liquidity is poor and a recovery is obviously possible but those traders who were looking to book a quick profit before a restful night's sleep have had their ideas shattered."

The result from North Warwickshire also showed a much stronger turnout for Leave than many expected.

Safe-haven bonds immediately came back into favor, with U.S. 10-year Treasury futures jumping 19 ticks.

Investors also priced in even less chance of another hike in U.S. interest rates given the Federal Reserve had cited a British exit from the EU as one reason to be cautious on tightening.

Commodities likewise swung lower as a Brexit would be seen as a major threat to global growth. U.S. crude eased 23 cents to $49.85 a barrel in erratic trade.

Rural <b>Alaska</b> communities to get $16 million in federal energy grants

Alaska News - Thu, 06/23/2016 - 16:33
Nine of this year's federal grants went to towns, tribal organizations and utilities in rural Alaska. The awards range from $450,000 for the city of ...

Congressional delegation on Trump: meh

Alaska News - Thu, 06/23/2016 - 16:11
Alaska's sole House member, Don Young, says he might choose himself for president, as a write-in. He could be joking about that. But Young sounds ...

Second official steps down from Walker cabinet on Thursday

Alaska Dispatch News - Thu, 06/23/2016 - 15:34

In an big day of change in Gov. Bill Walker's cabinet, the governor's office announced for a second time on Thursday that a top administrator is leaving, though it also announced the name of a new commissioner.

Department of Natural Resources Acting Commissioner Marty Rutherford is retiring June 30, though she will become a trustee of the Permanent Fund Corp. Board on July 1.

Walker also announced that he has selected Andy Mack as commissioner of the department.

Earlier Thursday, Gov. Bill Walker announced that he had accepted the resignation of Attorney General Craig Richards. Richards' last day is Thursday. Richards will no longer serve on the Permanent Fund Corp. Board.

[Alaska attorney general resigns, cites personal reasons]

"Alaska is fortunate to have someone of Marty's experience and caliber on one of the state's most important boards," Walker said. "For nearly 30 years, Marty has helmed various important projects, including the gas line. Her knowledge of various topics and inimitable ability to connect with anyone she meets has inspired the utmost respect of people statewide — from the Legislature to the industry."

Mack fills the spot left by Mark Myers, who retired as Natural Resources commissioner in February.

"I am pleased Andy has accepted this position, given his vast experience in oil and gas issues," Walker said. "As we look for more oil and gas exploration and development opportunities, Andy has the vision and passion Alaska needs to aggressively chart our own path. I am grateful to Marty, who has led the department seamlessly these past four months. Alaskans owe Marty a debt of gratitude for her nearly three decades of government service."

Mack is a managing director of Pt Capital, a private equity fund based in Alaska. Alaska Dispatch News publisher and owner Alice Rogoff is a senior adviser to the group, an unpaid position, according to Hugh Short, the chief executive and co-founder of the group.

"Born and raised in Soldotna, Mr. Mack brings over a decade of experience in Arctic policy and development," the governor's office said. "He currently serves as an advisor to multiple Alaska Native corporations engaged in oil and gas activities on the North Slope. In this role, he helped guide the regulatory drafting and implementation applied to drilling efforts in the Chukchi and Beaufort seas."

Mack has also worked as a civil and criminal defense attorney and legislative assistant, the statement said, and holds a bachelor of arts degree from Concordia College of Moorhead, Minnesota, and a juris doctor from Loyola Law School, a private Catholic institution in Los Angeles, California. He also served on the board of directors for the Resource Development Council for Alaska.

Walker appointed Rutherford to a seat on the Permanent Fund Corp. Board reserved for a member of the public. She will replace outgoing trustee Gary Dalton. Walker thanked Dalton for "his exemplary commitment" over the past four years, a statement said.

Public members serve four-year terms. They are paid a $400 honorarium, plus standard travel and per diem, for each day they work for the board, the statement said.

Walker picks Andy Mack as Natural Resources commissioner

Alaska News - Thu, 06/23/2016 - 15:26
ANCHORAGE, Alaska (AP) - Alaska Gov. Bill Walker has picked an attorney with oil and gas experience as his new commissioner of the Department ...

Walker administration shuffled as AG, DNR commissioner step down

Alaska News - Thu, 06/23/2016 - 15:26
Previously a law partner of the governor's, he also worked as an attorney with Alaska Gasline Port Authority, a municipal group that was focused on ...

MID-AIR SEX ASSAULT <b>Alaska</b> Airlines flight diverted after male passenger &#39;tries to kiss a sleeping ...

Alaska News - Thu, 06/23/2016 - 15:06
AN Alaska Airlines flight was diverted to Seattle after a male passenger tried to kiss a 16-year-old girl sleeping next to him. After the incident was ...

Going To <b>Alaska</b> The Hard Way: On A Stand Up Paddleboard

Alaska News - Thu, 06/23/2016 - 14:52
The madcap flotilla of engineless boats entered in the Race to Alaska is safely moored in Victoria harbor. Stage one of the 750-mile adventure race ...

All manner of waterborne entries on starting line of race to <b>Alaska</b>

Alaska News - Thu, 06/23/2016 - 14:51
It was so memorable they had to do it again. The 750-mile Race to Alaska is back for a second year as 43 teams of sailors, rowers and paddlers ...

Another top official steps down from Walker cabinet

Alaska News - Thu, 06/23/2016 - 14:36
"Alaska is fortunate to have someone of Marty's experience and caliber on one of the state's most important boards," Walker said. "For nearly 30 years, ...

Oil company doubts about Alaska LNG led to talks for larger state role

Alaska Dispatch News - Thu, 06/23/2016 - 13:47

Suggestions by Alaska's major oil producers that they might stop work on the $55 billion Alaska LNG project next year prompted transition talks that could lead to the state taking a larger role in the project, a state official said on Tuesday.

ExxonMobil, BP and ConocoPhillips did not say in early February they would leave the natural-gas liquefaction project, said Marty Rutherford, acting commissioner of the Department of Natural Resources until she retires next week.

But they indicated that with oil and LNG prices low, they were "not necessarily" moving into a costlier phase of the project set to begin in early 2017, she said.

That phase is known as FEED, short for front-end engineering and design. It's expected to cost the partners $2 billion. The engineering and design work will help determine whether the partners should give final approval to the project, a decision proposed for 2019.

"None of them were like, 'Were out of here, we're sorry,' nothing like that," said Rutherford. "But they all said this is a big issue and they weren't sure whether they were going into FEED."

Representatives of the oil producers said on Wednesday that the companies are exploring ownership options with the state.

"I can confirm that the state has proposed a state-controlled project and conversations to better understand the proposal have begun," said Natalie Lowman, communications director for ConocoPhillips Alaska.

[New head of AKLNG calls for bigger Alaska role in gas line project]

ExxonMobil and BP said they are committed to getting Alaska's gas to market.

The state currently holds a 25 percent stake in the Alaska LNG project, with producers sharing the rest of the ownership. The project would be one of the largest infrastructure projects ever built, with an 800-mile pipeline to move gas from the North Slope to a plant in Southcentral Alaska, where it can be chilled and compressed into liquid form for shipping to Asian utilities or other buyers.

Construction, if the project becomes a reality, has been proposed for somewhere between 2023 and 2025.

The project began to take shape in 2012 under then-Gov. Sean Parnell. ExxonMobil, the majority owner of the large Point Thompson gas field, has held the largest stake in the project.

Keith Meyer, the new head of the state-owned Alaska Gasline Development Corp., said Monday the state needs to take the lead in the effort.

Rebecca Logan, general manager with the Alaska Support Industry Alliance, said a larger role for the state would be a "concern."

"The state needs an Alaska LNG project, and we need the best people working on it and that's the private sector, the companies that do this every day around the world," she said.

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Meyer said Alaska can own the project but have very little invested. He said there are various ways to accomplish that, but one option is that contracts with LNG buyers can provide the financial foundation for money to build the line by attracting large institutional investors, such as hedge funds or retirement funds, interested in returns over long periods.

Other investors could include the oil producers, Asian buyers, or others, said Meyer.

There are lot of questions about how the state could pull off such a financing move, but it's possible, said Larry Persily, the former federal pipeline coordinator in Alaska and now an official with the Kenai Peninsula Borough.

"People go out with contracts in hand for real customers, good credit-risk customers that will make good on their payments and you can borrow money," he said.

But "project financing" of this size — raising perhaps $50 billion based on anticipated revenue — is unprecedented for an LNG project, said Persily.

"This is a lot of money, and we're an unproven developer," he said. "It's not like we've done this before. The lenders will ask more questions and want more guarantees" and greater returns.

The guarantees could be backed by the gas, but the oil producers currently own most of the gas, not the state, he said.

"The general rule is you get a return on your investment, and the less you put up, the less you make," he said.

Rutherford said the discussions with the producers have included talks about the benefits of state ownership, such as possible exemptions from federal taxes to help drive down costs.

All the parties are focused on an opportunity in 2023 and 2024, when key LNG supply contracts to Asian buyers from other sellers come to an end and could be replaced by Alaska gas, said Rutherford.

"It's a real market window and the governor has felt for a long time we must strive to ensure we hit that window, and that means not seeing delays in the project process, the design and engineering," she said.

The producers, even if they don't decide to own a portion of the project, will still want to make money off the North Slope gas they own, she said.

"They see the market window and think the project should hit it," she said.

New head of AKLNG calls for bigger Alaska role in gas line project

Alaska Dispatch News - Thu, 06/23/2016 - 13:42

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The new head of the state gas line corporation says it's time for the state to take a lead role in the megaproject from ExxonMobil.

The state is currently discussing a potential restructuring with its partners in the $55 billion Alaska LNG project — ExxonMobil, BP and ConocoPhillips. But the idea raises numerous questions about how a small state in a deep fiscal hole could afford an endeavor that involves building an 800-mile gas line, a plant to liquefy natural gas and other mammoth facilities.

On Monday, a week after he took office as president of the Alaska Gasline Development Corp., Keith Meyer, 58, said he's the man for the job.

[Oil company doubts about Alaska LNG led to talks for larger state role]

Meyer said it's possible for the state to boost its 25 percent ownership share without boosting the state's investment. In fact, it said, it's possible for the state to own the entire line, yet invest very little.

Meyer, who will will earn an annual base salary of $550,000 a year, cites his experience at Cheniere LNG as an example of how a small company can build a big LNG project.

He was president of Cheniere a decade ago when he oversaw the development of the Sabine Pass LNG receiving terminal in Louisiana, the largest such LNG facility in North America.

[Producers refuse to provide gas-marketing details to state]

From his longtime role in the industry, Meyer said he has witnessed Alaska's unsuccessful efforts over decades to complete a project that will tap the state's large reserves of North Slope natural gas for sale to large buyers overseas.

In an interview Monday with the Alaska Dispatch, he said the global demand for natural gas is growing, and that he's moving to Alaska from the Houston area with an "execution plan" in mind to complete an LNG project.

"I came up here with the belief it is achievable," said Meyer. "I didn't have to be convinced."

Here's an excerpt of the interview, edited for length and clarity:

Alaska Dispatch News: Why should the state pay you so much?

Meyer: It's really not so much in the industry. It's at the low-end in terms of peers in the industry. AGDC has to attract good talent, so we have to pay competitive industry wages, not just for me but other people we'll have to bring on to execute the project.

ADN: So why do this job?

Meyer: To me this is one of those crown jewel projects, a quintessential, career-achievement project. I've watched this project for literally my entire career. The first day I stepped into this industry I sat next to a guy working on the Alaskan gas project. I remember thinking as a young guy — that was 35 years ago (when I worked) at American Natural Resources — "Gosh, that's a neat project, maybe someday I'll get to work on a project like that."

I've watched it over the years, from a pipeline standpoint, from a North American gas supply standpoint, from an LNG standpoint. I was here in 2011 looking at a small-scale LNG solution for Southeast Alaska.

I have always been somewhat puzzled it could not get off the drawing board and into construction, so the opportunity to be the guy to put this project into construction and operation is a pretty good calling.

And the second aspect is just Alaska, which has its own attraction.

ADN: A lot of people in Alaska don't believe this will happen anytime soon, if at all. How do you make it happen?

Meyer: One of the things people have to realize is the large producers have many options to choose from in terms of the projects they launch. Alaska has one project. So to me, the biggest fundamental shift that has to happen is Alaska has to lead this project because no one is going to lead it for them. So the biggest change right now that's happening is that Alaska is now going to be in the lead to get this project on its pace for a 2023 to 2025 in-service.

One of the things we're looking at is a greater ownership (by) the state. But one thing I'd like to make clear is ownership is not equivalent to investment. The state may own 100 percent, but may not invest hardly anything.

So if we structure this project properly, this will be a very attractive project for infrastructure investors, private equity funds, retirement funds, that type of thing. There are trillions of dollars on the sidelines looking for good investments that have reasonable returns. So if we develop this project to have a reasonable return it will be attractive to those large infrastructure investments.

What I've said to the producers is if we do this right, they are certainly welcome to be an investor, and we'd certainly love to have them, but I don't think we'll be able to leap the hurdle rates the producers have for their investments.

So that's a big change we're looking at, is — how do we structure this project differently to make it much more competitive, because it is a competitive global arena. It is probably the most competitive LNG arena we've had in decades, so we've got to get this project to where it can compete.

I think we can do that. I think this project will be very attractive. It's a United States project, it's an Alaskan project, so it has a high degree of security around it, and it has a direct route to the major markets without passing through the territory of a third-party nation, such as the Panama or the Suez (canals).

ADN: Tax-exempt bonds issued by the state could also be an advantage?

Meyer: That's a potential we're looking at. So now we're saying let's almost start with a clean piece of paper with the producers helping in this discussion. It's how do we make this project more competitive, and that tax-exempt financing could be one way.

ADN: Alaska doesn't have to invest in it at all, but we'd still have to guarantee that investment.

Meyer: Not necessarily. You don't have to look any further than the Lower 48 projects to see the biggest of those projects were developed by companies that were relatively small and had no balance sheet capacity at all. But what they did, which is what many infrastructure developers do, you get good contracts with buyers, customers, and that becomes the financial foundation for the lenders and equity investors. They don't look so much at the developer, they look at the sanctity of the contracts you have been able to achieve.

You have to look no further than a company like Cheniere that didn't guarantee, but they have contracts with customers that have financial guarantees on the payments, and built what is the largest LNG export project in North America today.

ADN: That may be similar to what the governor has talked about with Asian companies having buy-in into the project?

Meyer: To make sure we're clear, they could. They could have ownership in these projects, but they don't have to. If you look to the Lower 48, in a Cheniere project, they don't. But in other projects, like Sempra's project, Freeport LNG (in Texas), they do have ownership interests. So either way is acceptable.

ADN: People say negotiating with potential buyers puts at risk our returns, because they'll come up front demanding the lowest prices. So how do we overcome that?

Meyer: Right now the challenge is to get this project competitive in the global arena, and to have acceptable returns. But when we define acceptability, that's acceptable for an infrastructure investor. So, a pension fund is a perfect infrastructure investor, someone with a relatively long horizon. Most of the Asian companies have a pretty long horizon, so a properly structured LNG project or pipeline project can fit them very well. Where it starts to fall off the attractiveness scale is where you put it in the context of a deepwater drilling program, or even an oil and gas well — it doesn't achieve that high return that a producer would like to see. So that's where we need to beat this project into looking more like an infrastructure project, which is what it is, rather than something riskier.

ADN: And we as a state can accept lower returns than BP or Exxon may want?

Meyer: Correct, we as a state, or infrastructure investors, that kind of thing.

 ADN: So taking control of the project doesn't necessarily mean a change in ownership structure but it could mean we're nominally the lead partner?

Meyer: That's a potential outcome. We may find that to get the best tax treatment, it may be a state-owned project. It could be 100 percent. One hundred percent is on the table if that's what it takes to make this work, but I want to be clear 100 percent ownership by no means means 100 percent of the funding.

ADN: There is some concern among lawmakers about us not having the producers involved.

Meyer: What I said in Juneau is we may have a larger ownership. But what I realized wasn't said, and I just assumed it in my mind but it wasn't said, is that ownership doesn't equate to investment. I come from a perspective of having done infrastructure and development over the last 30, 35 years. Never did we, at any place I worked at, anticipate funding an entire project. It was always developed such that it could achieve non-recourse third-party finance, and that included at a Fortune 500 company. So the balance sheet of the developer is somewhat protected, and what I look to do is put together good contracts that are attractive to the financial community, and that's our challenge here.

ADN: Are the producers an obstacle in any way because we have this sort-of equitable distribution of ownership now and they have these multiple plays in their LNG portfolio where Alaska gas may not be so important to them?

Meyer: They have the potential to be but only because of competitive projects internally. Oil prices are down so they are somewhat capital-constrained. That's outside anything we can do. They are all feeling pressure of this somewhat global surplus, somewhat global slowdown. Because of that we need this project to be competitive. But I believe if we structure this project competitively so we're not putting a big burden on their balance sheets, they will view this much more favorably. The goal is to have a very solid project that gets into production, gets built, and has happy producers on one end, happy customers on the other, and a happy state right in between.

ADN: Can you tell me about your experience at Cheniere's Sabine Pass project?

Meyer: I was president of Cheniere LNG when we built the important terminal. It was 2003 to 2008.

We took that from a bare patch of ground and we were a small company that had no real business being in LNG. We were told we were too small, we were told we had no credentials and that was probably all true. But we said no, no, we are going to build this. And we built the largest LNG import terminal in the Western Hemisphere, with two very solid customers.

So the company had no money. One of my first meetings I was told in February we didn't have enough money to make payroll by November. But we scraped together a bit of money, got good contractors that were willing to work cheaply. Bechtel was one that saw a good opportunity. Then we were very determined and definitive in pursuing the regulatory approvals. And when it came time the producers starting looking around to see who has the best project we were in the lead, and got had two very good customers with Chevron and Total.

ADN: Is Cheniere the 100 percent owner and zero investor?

Meyer: They were then. The company has since done a master limited partnership so there's a public ownership chunk of the partnership. A lot of the pipelines and LNG projects now are held in these master limited partnerships that don't pay taxes as a partner but they're very attractive for the infrastructure funds. So Cheniere corporate is still a publicly traded entity, but the major projects are owned by major limited partnerships which they own the majority of.

ADN: Who were the investors allowing this to happen?

Meyer: No oil companies, but they were initial shareholders, so small hedge funds invested early days. And then once we got our first contract (with Chevron), we had quite a bump and with our second one (Total) we were off to the races. Then we had a real live project. We had 20-year contracts with guarantees from two majors (Chevron and Total), so that becomes a very financeable document. We engaged a lender, HSBC. The lenders were happy, the equity investors were happy, the customers were happy. We built that project very schedule driven. We had time commitments in our customer contracts because our customers were developing large LNG project that had to fit through the eye of an needle, which was our import project. We had clauses in the contracts if we weren't in service by a particular time, they could walk.

So I have that similar mindset here, that we need to act like we're a development company. We have a project to develop, a great market out there in the world that wants LNG. We have a massive resource in the north. Now, it's a matter of structuring the project so it's attractive to the investing and lending public.

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