Governor Parnell Meets National People's Congress Chairman Wu Bangguo: Does our Mutual Future Portend More Than Fish and Tourism?

By Dave Harbour
Publisher
Northern Gas Pipelines

I drove downtown Saturday to witness a rare event. The leader of the People's Republic of China, National People's Congress, Chairman Wu Bangguo, traveling with an entourage of about 120 plus U.S. State Department Security, spent a diplomatic moment with Alaska's Governor Sean Parnell while returning home after his U.S. visit. The lack of local media attention to such an important visit was stunning and somewhat embarrassing.

But a 'rare event' alone wouldn't pry me away from Saturday morning chores unless, as I hoped, there might be some recognition between the two leaders that Alaska's North Slope Gas needs a home; that the Lower 48 is awash in natural gas, pressuring prices downward; and, that China has been shopping the globe for secure, long-term energy supply sources.

I have no idea whether private discussions of the two leaders broached such subjects. But we already know that China has an eye on Alaska due to its 2007 AGIA bid via Little Susitna Construction Co. Three divisions of Sinopec that would have acted in a subcontracting capacity to Little Susitna Construction Company, Inc. are located in populous, Puyang City, Henan, China, about 600 miles Northeast of Shanghai.
The three ‘divisions’ were represented to have expertise in engineering, oil and gas exploration, LNG, production, transportation and drilling. My interest of possible energy discussions on behalf of our readers was supported when the three highest ranking Alaska government executives at the meeting included Commissioner Tom Irwin, Department of Natural Resources, Commissioner Patrick Galvin, Department of Revenue, and Commissioner Larry Hartig, Department of Environmental Conservation. The Governor's Legislative Director, Gerald Gallagher, formerly of ConocoPhillips, joined the entourage.

During the initial meeting, Chairman Wu, spoke of China's interest in the environment and global warming and quoted admiringly of Speaker Nancy Pelosi, as observing that "The earth is the mother of all humankind."
Governor Parnell told the Chairman that, "As Alaskans we want you to know that we do care very much about our environment. We care very much about jobs for our people. We are very thankful for investments in Alaska and we welcome the Chinese people to come as investors, as tourists and in any other capacity...."
After the meeting, the Governor said he, "...was pleased that Chairman Wu and his delegation chose to stop over in Alaska for a day to experience the beauty of our state.” He said that, “China is an important market for Alaska. Chairman Wu and I had a good conversation on topics ranging from renewable energy to natural resources and, of course, Alaska seafood, and tourism opportunities.”
Parnell said that last year Alaska’s exports to China were worth more than $733 million. He noted the operations of six of China’s cargo airlines at Anchorage International Airport, the potential for the state’s visitor industry in years to come, and the joint University of Alaska-China University of Petroleum exchange program.

With the exchange of olive branches and pleasantries Saturday, the Alaska and China leaders seem to have established a deeper interest in joint diplomatic and trade relationships.

In Sunday’s Daily News and Alaska Standard, Dan Fagan addressed Alaska’s economic plight. If Alaska's gas pipeline project and economy are truly at risk due, respectively, to Lower 48 natural gas supply abundance and diminishing Alaska oil and gas revenue and investment, could China indeed become a viable contender for Alaska North Slope gas? How would that affect the AGIA contract? Could North Slope gas shipped 4200 miles to Shanghai via LNG from Cook Inlet also provide a South-central/Interior Alaska residential gas supply solution? Did the leaders' environmental invocations precede a logical conclusion that Alaska gas can supplement a major source of China's electric power: coal? Would a deal involving Alaska natural gas quell U.S. concerns about China's increasing power plant contribution of atmospheric carbon emissions? Wouldn't sale of Alaska Gas to China benefit the huge trade imbalance between the two countries?

Other questions, like these, may be irrelevant or at least premature and, for sure, too numerous to relate here. But Alaska's dire economic circumstances add fuel to the fires of all sorts of speculation. The trick will be to remain cool and logical in the face of growing political rhetoric and public distress about Alaska's deteriorating economic circumstance and South-central Alaska's energy crisis.
Note: Local petroleum industry expert, Brad Keithly, reminds us of the EIA's conclusion that, by "...2030, China could be dependent on imports for more than one-third of its total natural gas consumption."