U.S. Ambassador to Japan Rahm Emanuel, left, and Alaska Gov. Mike Dunleavy participate in a Q&A session at the Alaska Sustainable Energy Conference, May 23, 2023, in Anchorage, Alaska.
Biden administration officials on Tuesday teamed up with Alaska Republicans to pitch investors on a new pipeline and liquefied natural gas (LNG) export infrastructure complex that has long struggled to attract financing.
U.S. ambassador to Japan and former Obama White House chief of staff Rahm Emanuel delivered the keynote at the future of energy conference in Anchorage, where top Energy and State Department officials also spoke. Emanuel made the case that investors should expect American political power to sustain market share for American LNG.
“It’s not just ‘market access’… ‘Energy security’ is the new term, one of the new terms, for economic statecraft of the next 30 years,” Emanuel explained. He argued that investors should take a chance on large-scale gas export infrastructure at a time when future demand is uncertain.
Discussion centered on a $44 billion project that would pipe gas across the length of Alaska, from the state’s remote North Slope to an LNG terminal outside Anchorage. From there, it would be shipped across the northern Pacific to South Korea and Japan. Emanuel has championed LNG as Japanese officials look to meet rising demand for the fuel, and eye an opportunity to become a regional gas hub.
“You know, Ambassador Emanuel’s renowned for some of his sharp elbows and opinions, and lucky he’s using that sharpness to promote, like I said, Alaska energy,” Sen. Dan Sullivan (R-AK) said in introductory remarks.
Oil companies abandoned the Alaska proposal in 2014 after a slump in gas prices, and have been wary of re-entering a deal, despite multibillion-dollar subsidies recently enhanced in the bipartisan infrastructure bill and Inflation Reduction Act.
The market for LNG is volatile, and many investors suspect demand will be saturated by similar projects currently under way. Growing expectations that natural gas would serve only as a bridge fuel to a future without fossil fuels has also dampened investment in the costly infrastructure.
But Emanuel and other Biden administration officials joined Republican lawmakers, including Sen. Dan Sullivan and Gov. Mike Dunleavy, to persuade skeptical investors to park their cash in the pipeline and export complex.
“For those who are investors in the room, not only as a U.S. Department of Energy deputy secretary, but as an energy analyst, boy is this a phenomenal time to invest in Alaska on the natural resources to clean-energy side. I think history will reward those who are big and bold,” Energy’s David Turk said.
Geoff Pyatt, assistant secretary for energy resources at the State Department, referred to stimulating talks he had the previous day with ConocoPhillips, the largest crude oil producer in Alaska.
ConocoPhillips is a top target for Biden officials hoping to persuade investors to put up capital for Alaska LNG. Currently, U.S. gas export infrastructure is concentrated on the Gulf Coast. To cross the Pacific, gas must first travel through the Panama Canal, which can add weeks of shipping delays.
“THREE C’S IN THE LAST THREE YEARS changed the world: COVID, Conflict, and Coercion,” Emanuel said in his keynote, which made passing reference to climate change. Stressing the importance of selling gas to Asia, he said, “A lot of people are talking about friendshoring. I like to talk about acquaintance-shoring. We have to win the hearts and minds of people that aren’t exactly treaty allies.”
The market for LNG is volatile, and many investors suspect demand will be saturated by similar projects currently under way.
Emanuel argued that trade with the U.S. is the moral alternative to Russian and Chinese weaponization of commodities. “We wouldn’t use our energy as a strategic asset of economic coercion,” he said. “Remember what coercion is. It is using economic tools to secure political objectives.”
Yet at times, Emanuel suggested that the U.S. should emulate that strategy. “If all of a sudden, the U.S. is 10, 20 percent of another country’s energy portfolio, they have the ability to tell China, no, [you] can’t go there. Can’t afford to go there. So not only are you cutting off Russia, you’re giving our allies and acquaintances in the Indo-Pacific the backbone to push back.”
“Every country wants more of America—not just militarily, but the economic statecraft it brings. Because they know firsthand what an unmoored, untied China can do,” Emanuel concluded.
To hear Emanuel’s description, you might think “economic coercion” is only when the other guy does it. But Biden officials have been at pains to distinguish their strategic sales of energy commodities from similar tactics by rivals.
The question surfaced frequently in last week’s G7 meetings: What counts as economic coercion?
“We are actually remarkably restrained in using coercive economic power with the obvious and large exception of U.S. sanctions,” Jennifer Harris, who served until recently on Biden’s National Security Council, told Bloomberg. She added on Twitter, “Transparency & rule of law help check the ends to which US & Western coercive economic power are put.”
BIDEN OFFICIALS IN ANCHORAGE also framed their pitch for the pipeline and gas complex around slowing climate change and improving social and economic justice.
“I was really impressed yesterday, had a really powerful conversation with Tara Sweeney at Conoco, and talking to her about the history of the Native communities on the North Slope, and sort of how they are affected by the changes that we’re all seeing in our climate,” said Pyatt, the State Department official.
Sweeney, an Alaska Native who served as an Interior Department official during the Trump administration, was part of a small team advising the Treasury on how to distribute coronavirus funding earmarked for Native American tribes.
A Politico report found that she had diverted rescue funds away from tribal governments to for-profit Alaska Native corporations, including one of her former employers, the Arctic Slope Regional Corporation, which owns some five million acres of land with high potential for discoveries of oil, gas, and metals.
Pyatt also praised ConocoPhillips for “how seriously they’re taking the prospect of electrification of some of their heavy equipment.”
ConocoPhillips has relied on innovative technological fixes as the effects of climate change, to which it has contributed millions of tons of methane and CO2, undermine the structural integrity of some of its own infrastructure. As Alaska’s permafrost, or frozen land, thaws due to rising temperatures, sections of the Trans-Alaska Pipeline have shifted precariously. The Alaska Department of Natural Resources has approved the use of chillers, which refrigerate the melting permafrost, to keep pipelines in place.
Biden officials also conflated clean energy with energy security and availability, arguing that the extraction of LNG could benefit blighted Alaska Native communities and bring more cheap energy to Asia.
“You look at a country like India and you see the growth that is going to occur there … the challenge of providing energy to an international community that is adding hundreds of millions of people to the middle class, all of whom want the things we take for granted. All of that starts with the availability of energy,” Pyatt said.
