ANCHORAGE, Alaska — The Alaska Railroad is joining in an effort to acquire $100 million in federal infrastructure funding to build a new 18-mile spur to serve a liquefied natural gas plant near Anchorage.
The Mat-Su Valley Frontiersman reports the Matanuska Susitna Borough, Fairbanks North Star Borough, and Interior Gas Utility are also part of the effort to build the spur to the Titan gas plant near Port MacKenzie. Total cost of the project is estimated at $203.9 million, but if the federal funding is approved, the Interior Gas Utility, a public entity, will issue bonds for the remaining costs.
Construction of the connection to the existing Alaska Railroad main line would allow LNG to be shipped to the utility’s gas storage facility in Fairbanks, as well as to a smaller facility at the community of North Pole. LNG is currently trucked from the LNG plant to Anchorage.
The spur would be part of a larger project which seeks to build a 33-mile rail link to Port MacKenzie, a natural deep-draft port.
— Updated at 3 p.m. CDT to correct total cost of project ot $203.9 million.
Alaska has unusual energy distribution system. Almost all the oil and gas production is for export. Therefore Alaska must import refined oil and gas at high cost. What this project does is transfer the shipment of LNG from trucks to trains for more efficient and cost effective transport. It is a project sponsored by local governments and public utilities to lower the cost of providing natural gas to Fairbanks and North Pole (Eielson AFB). See https://alaska-lng.com
All so private industry can further enrich themselves on the taxpayer’s dime by selling the gas overseas at huge profits while the American consumers get the screws put to them with higher natural gas bills.
There is a lot of unusual activities when it comes to the global NG markets. If we have Alaska exporting, whey do we import NG from Venezuela? If we have so much fracked NG capacity, why can’t it be brought online now to fill the gaps?
Some of it has to do with global and domestic contract buying, Where the demand is and how far the NG has to travel.
The recent heat wave on the west coast of the US caused a large number of NG fired “peaker” plants to come online to fill the gaps that regional energy utilities couldn’t accommodate in the grid. This essentially absorbed all of the excess gas that producers stockpile for the winter months.
So demand economics now takes its place where projected demand for the winter outstrips what producers say they can stockpile. So if the economics are efficient, when futures prices begin to climb, you would expect the suppliers to increase their output in prep of making more on the markets.
So one of three things will happen. A mild winter will take hold of the northern US which will reduce the demand on the smaller stockpiles, or the NG producers will be able to make up the shortfall. This will keep prices relatively stable. What everyone is planning for is a cold winter and less NG in the supply line.
Several rural gas customers have already been warned that NG will be in short supply and very expensive this winter. This will cause a price spike in food products that rely on NG for creation.
Ok nevermind! Looking at the OG article the new spur will cost $203.9 million not billion. Much more reasonable!
Only $ 10 million a mile.
$203.9 BILLION? That has to be a typo unless the project is managed by DOD.
The Alaska Railroad was at one point owned by the Department of Transportation but is now owned by the State of Alaska. Government contracting…
Ever hear of inflation???